Known for innovation, Cisco has already cemented its presence in the world by demonstrating its leadership position in Internet routers and switches. Recently, it ventured into advanced technology markets such as wireless, home networking, optical, IP telephony, security, and storage. Strategies to strengthen and maintain market share in markets where it operates, and lead the innovation to offer best solutions, have been the key to Cisco's success. And this journey has been led by its CEO, John Chambers, whose leadership prompted the company to understand market demands quickly and adapt to changes. John Chambers is one of the few industry leaders who recognized future global demands fifteen years ago.
John Chambers, who was in India recently, spoke to VOICE&DATA to share his global vision and potential of the Indian market. Excerpts...
Why the transformation from Cisco Systems to Cisco? Has the infrastructure
I think there have been two phases in the Internet explosion. The first was when the Internet was used to place orders online, customer self-service online, and employee self-service online. And, it came to India for back-office and to China for manufacturing. It drove productivity for a decade and Cisco benefited hugely from that. It also began to redraft the process change. Now, what is interesting is that productivity has slowed down in the last three years. What seems to me is that we are about to enter the second phase of the Internet.
The second phase will be built around convergence-data, voice, video, and mobility. It will result in dramatic transformation of business models. How we deliver our support to our customers will be done primarily out of India-not back-office support, but primary support. It will deliver virtually all around the world.
|I think what we are going to do in India is, first we will prove it in India; then it will go to developing countries; and then, it will go to developed countries. This is the model for Cisco in India|
Remember we were the ones to accurately predict the first phase of the Internet. We first did it ourselves, and then we readied the way for the next decade with our customers. Had someone invested a dollar in our company when it was started, today it would be two hundred and fifty thousand dollars. So, it has been very consistent throughout.
Communication majors believe that enabling customers with communication
tools is going to be a big challenge in terms of the price that you offer them
for their products. Is Cisco also thinking on these lines?
You have to play your role in network building and infrastructure. I love anything that enriches the customer experience, especially the video. We have interest in anything that lowers the cost of device making.
What Cisco does well is that it catches these market transitions...
We are entering a market transition where the network will become a platform for all kinds of communication. And, the buzzword is about collaboration. It is not about one-to-one productivity change; it is many together. So, it is about how we collaborate seamlessly with our customers and with our partners such as Infosys, Wipro, and Tata.
To answer the other part of your question, we said 5-6 years ago that you needed to think about 100% network growth. No one in the world believed it. We built our products that time to cope with that growth. Today, most of our customers feel networks will grow by 50-100% but 100-200% is a given, and no one is saying 200-500% isn't possible. And the killer app is video-telepresence, virtual meetings, etc.
So, I think it is all the three things happening at the same time. You first have convergence of data, voice, and video over common infrastructure, not separate ones. The second thing is the Internet entering its second phase, built around collaboration. And the third thing is that as this grows, it will cause dramatic changes in business models.
Cisco is known for acquisitions. Will India become a hot spot for your
Our customers drive our acquisitions. However, I am very disciplined in acquisitions. About your second question, India may not be a hot market for acquisitions, but we are looking at India as a true partner and platform for our globalization efforts. The reason for our strong commitment to India is the willingness of Indian leaders to partner with us closely. This partnering mentality of Indian leaders, combined with the assets of India's strong education system and commitment by the government, makes us optimistic that India will continue to show phenomenal growth. I feel that we will continue to have more talent for our globalization efforts.
So where does India, and the much-publicized globalization center, fit?
Five hundred and seventy-five thousand engineers a year is a huge number. Compare that with the US, which produces 60,000 a year. I know there are different skill levels but if the top 5% of your population goes to this industry, that is what I am after. You combine that with an environment where it is going to be one of the largest global economies by 2025, with a culture that knows how to innovate and one that knows how to partner, has a young population, and a government that is open to new ideas, I think it is a unique combination.
What Cisco is going to do here is not labor arbitrage. We are going to approach it in a different way. We are here to enable disruptive business models. That is the reason I am here. I think what we are going to do in India is, first we will prove it in India; then it will go to developing countries; and then, it will go to developed countries. This is the model for Cisco in India. This will be a globalization center, Cisco East. And, it will probably develop as our second world headquarters.
As a global business leader, have you thought of the negative implications
of globalization? What are some of the things that you think a business leader
Anything that has immense opportunities requires changes. Changes make us uncomfortable. You have to create changes and cope with the change and locate benefits of the change for all the people, and business leader have to do this aggressively.
We came here to partner with a country that understands how to partner. That is a huge advantage for India. India will be an example that emerging markets will follow on different business model changes-the ability to cut out the middlemen from the retail supply chain; the ability to charge one cent per minute for a voice phone call and still make profits; and the ability to climb up in the services value chain, from back-office to other high value areas. We are here to partner with Indian companies in those changes.