We need local innovation

Written by Indu Bhan | Indu Bhan | Updated: Jul 9 2012, 09:07am hrs
US network equipment maker Cisco Systems has been moving very aggressively in India in terms of investments and positioning its products and solutions for customers here. It is also innovating locally to be more relevant to its customers and partners. As a company, we have invested heavily in India and we are very bullish on India in the long term, says Jeffrey M White, vice-president, Service Provider Segment, Asia Pacific, Japan & Greater China, Cisco Systems. He manages the San Jose, California-based companys overall relationship, investment, and growth strategy in the region. In a free-wheeling interview with Indu Bhan, he delves into Ciscos business strategy and plans for India. Excerpts:

The global economy continues to experience difficult conditions. How attractive is Indias IT & communications sector for Cisco Systems

Weakening or reshifting of the economic growth is being seen across the world. While there are certain unique challenges in some countries, Asia Pacific, Japan & Greater China as a region will continue to grow. Emerging markets, like India, are integral to Ciscos growth plans and is an incredibly important market for us to be in.

As far as service provider business is concerned, our focus is majorly on IP-NGN (Internet Protocol Next Generation Networks), mobility solutions adoption and on driving traction for Ciscos datacentre and cloud computing platform, collaboration solutions and video technologies for customers in this vertical.

The confluence of a number of new technologiescloud, mobile internet, high definition video, machine-to-machine, unstructured data and digitisation of cable networks are creating unprecedented opportunities for us to transform enterprises and businesses.

What is the strategy behind improving your market share in India

India is and will continue to be a significant growth opportunity for us. As a company, we have invested heavily in India and we are very bullish on India in the long term. Telecom operators are seeing regulatory and policy challenges and there is a high degree of competition in this sector. We work very closely with service providers as our success depends on theirs and that is the focus of our strategy. Success for service providers means achieving business outcomes that include: monetising the traffic going across their networks (revenue growth) and optimising the cost of delivering it (cost) to be profitable. We are also innovating locally to be more relevant to our customers and partners here and provide unparalleled product and solutions.

Our strategy in the country is to solve our customers most important business challenges by delivering intelligent networks and technology architectures built on integrated products, services and software platforms. Networked technologies and partnerships will enable our customers to be more competitive and differentiate themselves in the market by solving their most important technology and business issues. We are focused on the major trends that are affecting operators.

Cloud, mobility and video will drive the next wave of growth in this sector. The internet is going mobile and cable networks are getting digitised. As architects of the internet, we feel that the market is moving towards Ciscos core competencies.

Operators are not only dealing with spectrum scarcity, but also with a significant shift in the business modelsfrom voice to data. We expect that trend to grow. We at Cisco think that social and media will continue to be an important trend in India as well. We are making significant investments in mobility, video, data sharing and cloud. Our goal is to accelerate service delivery, extend partnerships, grow revenue and reduce costs and improve efficiency.

Cisco has a big R&D presence in India. What is the value add that the Indian facility is providing

We have significant engineering facility in Bangalore. Our India headcount is 8000-plus and includes R&D, sales and business support staff and we will continue to invest there. We have also introduced mobility engineering based in Pune. Besides, we will be introducing products that will be designed in India, for India. We are committed to innovation and localisation in India to help our customers realise the Digital India potential. In fact, we have recently introduced two new set-top boxes an entry-level SD digital terminal adapter (DTA), and a HD Zapper, locally designed and priced competitively for India and emerging markets. We are also exporting products in mobility portfolio like pre-aggregation solutions etc. The future is clear. The challenge now is to deliver the complex solutions and services that will be required to realise the promise.

What are the top three measures that the Indian government needs to take in your sector to attract investments

There is no denying about the attractiveness of India and its long term potential. For any company to invest, it needs stability in decision making and ability to track the growth in the long term.

India might throw some short term challenges in the market however, historically; India has done a very good job at attracting FDI. What is also important is moving faster in terms of decision making and throwing out some of the sluggishness.

Cisco is a major provider of networking equipment to a large number of companies in India. What has been the key lesson learned to succeed here

I think first of all we need local innovation. We have to be a local company to succeed in long term. We have been interested in designing products in India and for India. Fundamentally, we have taken a different approach in innovation in markets. It has been a big part of our work.

We are moving very aggressively in India in terms of investments, market models and positioning of our products and solutions in a different financial construct for our customers. We are tailoring solutions specifically for the Indian market. We will continue innovating in a different way to suit Indian clients. We have new offerings like new business models that are consumer and enterprise focused.