Cisco in India

Ever
since Voice&Data started tracking the networking equipment market, never has
it seen such a consistent growth, as the one charted by Cisco Systems. Growing
at a quick CAGR of 91 percent over the last four years to touch Rs 360 crore in
1999-2000, Cisco has left a pack of competitors in the datacom space far behind.

As India speeds up the Internet industry by privatizing monopolies and
deregulating telecommunication segments, the question is how fast can Cisco
change the old telecommunication systems by IP solutions, to maintain the
present levels of growth? As the managing director of a big networking company
pointed out, "Cisco’s growth in India has been splendid. But its $50
million revenue pales in comparison to Cisco’s revenues in Korea and China
where the numbers are in hundreds of millions". To reach that level, India
has to add more phones, TVs, and computers, which are the drivers of the IT and
communications services. "The overall IT market in Korea is at least two
and a half times that of India", says Aditya Pant, head of research
operations, IDC India. The government can be a driver. But it has often worked
in spurts rather than being consistent.

Manoj Chugh, who took over as the country head of Cisco early last year,
agrees that overall growth has not been as fast as one would like. But he
believes, "In India once you take an asset, the customer premises equipment
and make it a community asset, you will see that the usage will grow at an
exponential level". That is the revolution that Cisco wants to engender.

Chugh is confident of sustaining and improving the present growth rate. The
reason is that today it sees tremendous opportunities for deploying solutions
that are hardly deployed–IP telephony, IP contact centers, common LAN for
voice and data, DWDM, etc.

The opportunity is there, but will Cisco seize it? The competition in the
Indian market is getting more intense. So, what will separate the winners from
the also rans? "In the past, almost all Cisco competitors have had
operational issues to sort out in India. Cisco has been fairly stable in this
respect", says Dinesh Jindal, senior analyst at IDC India, which ranked
Cisco as the top networking vendor in India for the fiscal 1999-2000.

Looking at the future, one can see the datacom competitors getting their acts together and many new faces in the market. "Entarasys has emerged as a strong player in switching and switch routing segments of data networking. Our recent wins give an indication of the overturns in the market", says Uday Birje, country manager, Enterasys Networks. Juniper is among the new players in the Indian market. "Service providers today want a router that can push packets extremely fast through their networks while at the same time being extremely stable. Juniper has been able to meet these stringent needs. The backbone router market is growing very fast and we believe that there is enough room for two players but we will continue to win market share", states Karthik Natarajan who oversees Juniper's operations in India.

While maintaining the momentum that it has in the data space, the real key
for Cisco in India is to tap the emerging new generation network in the
communications services sector. Competitors like Lucent, Ericsson, Mororola,
Nortel, Alcatel, and Siemens are firmly entrenched in this space.

It also needs to have much stronger alliances in India. Vivek Joshi,
assistant VP, IT, HDFC Bank, says, "Its products are very good. But there
is a lack of direct support to end-customers. So, support is as good or as bad
as the SI". On this, however, there is support from the leading partner for
Cisco in India–Datacraft RPG. "Cisco’s weakness is partly because of
its strengths, as they are growing above the industry average. Certain product
lead times are stretching, concerning the customer’s IT implementation cycle
and these compromises are seen as opportunity by the competition", says
Dilip Kumar, head, Datacraft RPG (India).

Cisco has to immediately address these apprehensions to emerge as the true
leader. The trick will be to inculcate the Cisco culture in India and take it
further. It has to be very aggressive, improve its delivery schedules, and
support chain, and be customer-focused. Chambers visit is a good time to start.

Nareshchandra Laishram