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Future competition is between cities, not countries

Future competition is between cities, not countries
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First Published: Tue, Jun 14 2011. 10 34 PM IST
Updated: Tue, Jun 14 2011. 10 34 PM IST
Bangalore: The story of Cisco Systems Inc.’s transformation into a $40 billion (Rs 1.8 trillion) company, from about $1 billion in revenue in 1995, has been dulled by disappointing numbers in recent quarters and nearly flat revenue growth over the past three years.
Chairman and chief executive John T. Chambers admitted in a memo to employees in April that the company had “lost some credibility” and needed more discipline and better operational execution. But he affirmed his faith in Cisco’s strategy of pursuing leadership in its core areas of routing and switching, collaboration and video.
Cisco is the world’s biggest maker of network equipment. “I want it to be a company that keeps changing the way the world lives, plays and learns,” wrote Chambers, who was in India on 13-14 June to meet Cisco’s employees and leaders.
In 2007, Cisco announced an India initiative, committing to establish a “second headquarters” in Bangalore—its Globalisation Centre East—to develop systems for smart cities and infrastructure.
Wim Elfrink, who spearheaded that initiative, is returning to the US, leaving behind a team of senior executives to run Cisco India.
He will remain Cisco’s chief globalization officer and executive vice-president of “emerging solutions” and the chair of its emerging countries council. In an interview, he spoke about Cisco’s achievements in India. Edited excerpts:
After four years and more than $1.16 billion in investment, what has Cisco been able to achieve in India?
We wanted to do something that hadn’t been done before. We committed to build an iconic campus here that will be a symbol of innovation and what technology can do in a more sustainable world.
For me, it has been a great journey. Every building you see here has gone one stage further than the earlier one in terms of what IT (information technology) can do—from an energy-management point of view and from an integrated operations, command centre point of view.
We went from 1,700 to 8,000 people and we now have 17 senior VPs (vice-presidents) and 104 directors. We scaled not just from a quantitative point of view but from a qualitative point of view. We promised to get 20% of top talent outside (the US) and we are absolutely delivering on that.
I am transitioning back. I have always said that I will not replace myself; I will leave a team behind. I am pleased to say I leave three key senior VPs behind and a broad management team. I will maintain oversight and visit regularly.
But for all the IT advances, there is also scepticism.
I think it is human. But see what has happened in telecom, for example. People were sceptical then too. We now call video the next voice. That will happen too. It’s our job to make the business case, explain the return on investment. We have iconic projects from a smart connect point of view. Our marquee project at this moment is in (South) Korea in Songdo. Citizens do not buy technology. They will consume services. That is the next way. In an apartment you have electricity, you have water and you will have ICT (information and communications technology).
Technology today is still an afterthought, 2% of the budget. Now we are getting developers who understand. We are in year No. 3 of a 10-year journey. It will go the same way as this (points to a smartphone on the table).
So what does your journey here mean to Cisco globally?
Results count. In the end, if a company is successful globally and we access new markets, access new innovation, access new talent, and promote what I would call reverse innovation, (then that is good).
Take the revitalization of cities. We have a big project in one of the US cities with the expertise we developed here. If you are the mayor of Detroit, for example, and you have gone from 1.4 million people to 600,000 and half the city is a ghost town, how do you revitalize, attract investment?
I believe that the future of competitiveness is between cities, not between countries any more. Money is much more scarce. How do we attract investment?
In India, it is going to be, for example, Pune versus Bangalore versus Kolkata.
In the end, what counts is, can we truly become a global company? Can you “glocalize”? Three billion people will be connected to the Internet in the next decade. People will have access to ICT before they have access to water or electricity.
We have 35 MoUs (memoranda of understanding) and 14 active cities for these projects all over the world. And the centre of expertise for that is here in Bangalore, our living lab, I call it.
Every building, every proof of concept here (Cisco’s Bangalore campus) shows that. The campus is really the infrastructure of a mini-city. It is also a showcase for customers. People ask to go to California, where you can also, of course, meet Chambers and senior executives. But now they can also come here. We have visitors from Africa, Brazil... It makes for a lot of empathy.
What will all these mean to India?
We want to make technology relevant for the masses. Things have not gone as far here as (in) China or Korea but it is starting. We see projects like the Delhi-Mumbai corridor, where we are participating. I see (infrastructure) developers embracing technology as a differentiator.
I think in India the only way out of the infrastructure crisis is by embracing technology, thinking out of the box. If India wants to catch up in the traditional way, they will always be in catch-up mode. The UID (unique identity) project, for example, is a breakthrough. You also have to get the difficult things going in terms of policies.
How should technology watchers in India understand the restructuring within Cisco?
Let me not comment on that.
How was life in India for you?
Unforgettable. I learnt a lot. My family learnt a lot. It has been life-changing for my boys to come out of the Californian bubble. My brains go back but my heart stays here.
And I have fallen in love with cricket. I have even started speaking in cricket terms. Every run counts!
The leadership team Elfrink leaves behind
Anil Menon:Becomes deputy chief globalization officer and continues as senior vice-president, smart+connected communities
Faiyaz Shahpurwala: Becomes India site leader and continues as senior vice-president, emerging solutions group and advanced services
Naresh B. Wadhwa: Continues as president and country manager, Cisco India and Saarc, leading the India sales organization
sridhar.c@livemint.com
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First Published: Tue, Jun 14 2011. 10 34 PM IST