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'We are looking at India as a true partner, and a platform for our globalization efforts'

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VoicenData Bureau
New Update

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.

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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

growth plateaued?



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.

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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.

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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.

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Cisco is known for acquisitions. Will India become a hot spot for your

acquisitions?



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.

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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

must do?



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.

Baburajan K



baburajank@cybermedia.co.in

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