Computer networking gear maker Cisco Systems Inc. aims to double its revenues from India to $2 billion, or about Rs7,960 crore, by 2010 from the $1 billion figure in its last financial year, as it expands its local presence from being primarily a supplier of computer routers and switches to solutions built around voice, mobility, data centres and security.
India, the world’s fastest growing market for tech products, including software and hardware solutions, is on top of a list of “growth markets” for Cisco. “The market here is seeing a frenzy,” said Naresh B. Wadhwa, president and country manager, Cisco Systems (India) Pvt. Ltd in a recent interview. “By 2010, 5% of our global revenues will come from India,” he said.
Cisco, which reports its financial year to July, reported revenues of $34.9 billion in its fiscal year just gone by. Currently, India contributes a little more than 2% of the global revenues.
Cisco’s India president Naresh B. Wadhwa says that over time, holistic solutions will look beyond routers and switches
The San Jose, California, company plans to shift one-fifth of its top talent to India in the next two-three years as part of a global transformation that Cisco chairman and chief executive John Chambers announced in December. Some 3,000 employees are in India, a number it wants to take up to 10,000 in three years.
Cisco, according to technology researcher International Data Corp., has a 86% share of the routers and switches market in India. Routers and switches, used to string computers together to form a network typically used at companies, account for more than 60% of Cisco’s India revenues.
“Entering new markets is very important for us in India. Over time, holistic solutions will not come by only with routers and switches. We will increase our focus on voice, mobility, data centres, security and unified communications technologies, because that’s where the integration is happening,” Wadhwa said.
An analyst said Cisco’s shift from a product-centric company to being a more solution-centric one is partly driven by competition from rivals such as D-Link Corp. and Nortel Networks Inc. “But (it is) also a natural progression to help them move up the value chain rather than dilute its brand image by getting into low-end products,” said Parijat Chakraborty, vice-president at research firm TNS Global, part of Taylor Nelson Sofres Plc.
Increasing its presence in emerging wireless technologies, such as Wimax, through an acquisition—trade publications have reported Cisco is close to buying Navini Networks Inc., a personal broadband networking equipment company—is one such move.
“We are looking at entering the Wimax space as the markets that will benefit from this are the government, defence and telecom sectors, which we are strong in in emerging markets such as India,” Wadhwa said, declining further comment on the Navini buy. Navini has a development centre in Bangalore.
Still, a large part of Cisco’s revenues will continue to come from banking, manufacturing, and government customers, said Chakraborty, adding the networking company’s move out of its core large cities market will be “through its customers, which are increasingly heading towards rural India.” Large businesses make up the biggest market for Cisco in India. Mint estimates that some 25% of the revenues come from large enterprises.