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Cisco Systems: Betting big on innovation

May 07, 2013
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A leading global manufacturer of networking equipment, Cisco Systems is particularly focused on the Indian market in the Asia-Pacific region. After several quarters of negative growth, Cisco’s revenues improved from $11.5 billion in the second quarter of 2011-12 to $12.1 billion in the corresponding quarter of 2012-13.

Encouraged by its improving per-formance, Cisco is looking forward to strengthen its Indian operations under a new leadership. In January 2013, the company appointed Jeff White as its president for India and the SAARC region. Under White’s leadership, Cisco will focus on the enterprise segment, public sector companies, service providers, and small and medium businesses (SMBs).

Background

Incorporated on December 10, 1984 in California, Cisco commenced its Indian operations in 1995. In the first few years, the company helped service providers in building their telecom networks using its strong product portfolio of routers, switches and telecom solutions. However, owing to the dot-com boom in the early 2000s, the company failed to leverage its leadership position in India. With rapid development in the Indian telecom and IT industry after 2003, Cisco bounced back in this market.

Over the years, the company has established its business in India by providing mobile backhaul and carrier Ethernet applications to operators offering 2G, 3G and 4G services. It has also developed technology solutions for unified communications, network security, video, virtualisation and cloud computing.

For the past several years, Cisco has focused on making India its research and development (R&D) hub. In 2007, it established the Globalisation Centre East (GCE) in Bengaluru to develop technologies for emerging markets. GCE is the company’s largest R&D centre outside the US. It has been serving as the launch pad for developing innovative products for countries like India, Brazil and China.

As per Infonetics Research’s Service Provider Routers and Switches Quarterly Market Share report, Cisco led the global router and switch market at the end of the third quarter of 2012, followed by Juniper Networks, Alcatel-Lucent and Huawei. Also, the company led the router and switch market with a share of over 40 per cent.

India strategy

Cisco has been focusing on introducing innovative products in the Indian market. The GCE has helped in developing products like the ASR 901 cell site router and the Unified Communications Manager (UCM) BE 3000, a wireless network router to meet the changing needs of Indian operators and small and medium enterprises (SMEs). The company’s latest product, the UCM BE 3000 is targeted at SMEs and is capable of supporting 300 users across 10 sites. It offers voicemail, conferencing and mobility features like extension mobility and teleworker support to connect business calls and voicemail messages to employees on the go.

Currently, Cisco offers network solutions to companies like Bharti Airtel, HCL Infosystems Limited, IBM, Orange Business Services and AGC Networks. It also operates joint development centres with Wipro Technologies and Infosys Technologies in Bengaluru, HCL Technologies in Chennai and Zensar Technologies in Pune.

To grow its business, Cisco has been pursuing acquisition opportunities. In March 2012, the company acquired NDS, a UK-based provider of video software and content security solutions. This is expected to complement and accelerate the delivery of Videoscape, Cisco’s platform which enables service providers and media companies to deliver next-generation entertainment experiences.

The way forward

Cisco is facing intense competition globally as well as in India from players like Juniper Networks, Hewlett-Packard and the D-Link Corporation.

The company is looking at business opportunities offered by segments like videoconferencing and emerging technologies like cloud computing. Cisco is expecting over 20 per cent growth in the Indian videoconferencing business in 2013. It is aiming to tap markets which offer such solutions free of cost to SMBs. The company is also looking to offer affordable security products to SMBs, and expanding it sales and service network. Cisco intends to expand its presence to about 100 cities from 10 cities and double its channel partners to 200 in the next two years, besides catering to the business opportunities offered by the increasing number of organisations that are moving towards software-defined networking (SDN). Cisco has recently launched its Open Network Environment strategy, which is popularly known as Cisco ONE, to meet clients’ needs in an SDN environment. The Cisco ONE strategy will be executed through agents and controllers, and overlay networks. The company’s strategic road map around SDN involves educating organisations and partners to adopt these emerging concepts.

Going forward, increasing its sales in India and emerging markets will be a key focus area for the company. It would expand its business in these markets by investing in R&D and pursuing acquisition opportunities that complement its existing business.

 
 
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