The networking giant has started cross-leveraging its service provider business as part of its drive to expand its SMB client base.
Small and medium business (SMB) segment is one of the single largest revenue contributors for infotech networking major Cisco’s India and Saarc operations. This leg of business has been growing at the rate of 20% y-o-y and adding close to 25 SMB customers every day, informs Sudhir Nayar, managing director, Commercial, Cisco India.
For Cisco, SMBs constitute about 50% of its business in India and is one of the fastest growing segments followed by BFSI, IT/ITeS. The company is currently doing business with 30,000 customers and is looking to triple the number of SMB customers to 90,000 in next three years and over a lakh in the next five years.
So why is the SMB business so promising for Cisco? As per the company, there are 51 million SMBs in India, who contribute 46% to India’s export sector. Over 70% are completely offline and 28% are connected—only 2% are digitally engaged. The company is betting on driving their digital transformation. With the uptake of digital technologies, SMBs may be able to increase their contribution to GDP by 10%.Profits of digital SMBs grow up to twice as fast as offline counterparts and they employ five times more employees compared to offline SMBs.
Earlier this year, Cisco had launched its ‘Start’ programme to offer a new set of solutions to help clients go digital with wireless, secure connectivity for as less as $70 per user per year. The company has made the product and solution offering as well as its implementation so easy that it can be installed in seven clicks. “We are seeing significant traction in our SMB business, thanks to ‘Start’ portfolio. Since the launch of Cisco Start portfolio in FY17, we have on-boarded 5,000 new customers in a year. We are on track to reach our goal of tripling SMB customer base to 90,000 by 2020,” said Nayar. Cisco has also started cross-leveraging its telecom service provider(SPs) business.
“The first move to digitise any business is bandwidth and networking. Hence, our SP business will help us reach out to new customers who want to go digital. Today, the service provider has the biggest reach; that is why we are collaborating with our existing service provider. We will have joint offerings and use SPs as a new channel to tap a new set of customers. This strategy will help us to take the customer base to 90,000 from 30,000,” Nayar added.
The firm currently has 25,000-30,000 SMB customers in India.The largest sector within SMBs for Cisco is IT/ITeS. The company is seeing strong demand from small-scale manufacturing, retail, e-commerce, logistics, education, logistics, hospitality,” he said.
Sharing the names of some clients who were among the early SMBs on the digital journey, he mentioned Safe Express, NMIMS University and Narayana Health. Cisco has helped transformed their customer services and response time. In the case of Safe Express, the benefits have been exceptional—it now boasts of transporting 80 million packages per year with 99% accuracy and a response time that has decreased by 25%.