Setting up the largest R&D center after the US in Bangalore; developing a
reseller network across 75 cities, of more than 1,200 resellers trained by Cisco
experts; establishing MoUs with premier and regional educational institutions to
develop networking talent… the list of achievements seems to touch nearly all
possible spheres of activity.
Despite an economic recession, Cisco continued to be bullish about India. It
was quick to notice a shift in the customer behavior, thereby positioning itself
to take advantage of that. It adopted a strategy of developing new markets by
establishing closer ties with partners to focus on specialized offerings and
spreading to new geographies through direct interaction with resellers. It also
paid attention to strengthening relationships with distributors. As a result,
Cisco was able to tap a complex matrix of niches, thus registering a commendable
21 percent growth in a fiscal that was strewn with negative and single-digit
growths. Cisco registered a total revenue of Rs 930 crore to top the Indian
networking industry chart. In the previous fiscal, it had grossed a revenue of
Rs 765 crore. The dominance of this networking giant is evident from the fact
that its revenue figures are nearly thrice those of the nearest competitor,
Nevertheless, a negative service provider market, where caution was on
everybody’s lips, impacted even Cisco’s performance. While new markets in
the carrier optical space did not materialize, the poor Internet access market
pushed Cisco to have a flat growth in routers for the first time in many years.
Routers grew by a mere 2 percent.
It was the enterprise market that came to Cisco’s rescue this time,
especially the switch segment. Switches grew by 32 percent to clock sales of Rs
335 crore, thus constituting 36 percent of Cisco’s total revenues, just a
shade below the 38 percent share of router revenues. The significant gains in
switches came due to the trend of using Ethernet as the last-mile technology for
Internet broadband access and MAN connectivity. Also, Cisco switches became all
the more attractive due to the added advantage of seamless integration to
wireless LAN and IP telephony technologies.
Even as Cisco was leveraging the growing virtues of Ethernet switches, it
struck some new gold in niche areas such as WAN switches, IP phones, security
solutions, wireless products, and IP contact center solutions.
One significant trend evident in Cisco’s customer spread was the blurring
of lines between enterprise and service provider products. Large enterprises now
implement service provider technologies, such as WAN switches, high-end routers,
and IP telephony products while service providers are deploying enterprise
products like Ethernet switches. During the fiscal, Cisco had some very
significant wins. Cisco’s enterprise customers include Infosys, Wipro,
Digital, Cognizant, Talisma, EXL, Spectramind, and Manjushree, IIT Kharagpur,
IIT Kanpur, WEBEL, Gujarat and AP Govt, and TCG. Among service providers, it
deployed significant amount of networking products for BSNL, Tata Power, Satyam
Infoway, Tata Internet, and Bharti Broadband.