US COMPANIES IN INDIA
Background
Cisco Systems, the US$ 22 billion networking equipment giant, established Cisco Systems (India), a 100 per cent subsidiary in 1999. The company has a strong brand equity and partner network in the country. As a market leader in the domestic enterprise-networking segment, the company
operates with 1500 resellers in 100 cities besides training and certifying them.
The company offers a wide range of networking products across both foundation and advanced technology areas of security, wireless, IP and storage besides dominating the Indian Routing and Switching market.
Cisco Systems India Pvt Ltd. (CSIPL) has a fully owned Global R&D Development Centre (GDC) in Bangalore. Cisco’s Bangalore GDC is its largest GDC outside of the US. The company also has Joint Development Centres with Wipro Technologies and Infosys Technologies in Bangalore, HCL Technologies in Chennai and Zensar Technologies in Pune.
Market leader in network equipment With a 45 per cent networking equipment market share, Cisco is consolidating its leadership in the core
areas of routing and switching with 85 and 60 per cent market share in routers and switches respectively.
Thrust on segments like BPO-ITES, BFSI and Telecom has helped Cisco move up the growth curve. The company is focusing aggressively on the emerging/
advanced technology arena, a fact strengthened by the increase in specialised partners in these areas.
Cisco currently commands the No. I position in the Indian IP Telephony market having shipped in excess of 50,000 IP phones. It also has 45 per cent of the enterprise network security market as per Frost & Sullivan.
In terms of revenues, the company has shown good growth over the years. It registered a growth of over 46 per cent in 2003-04 as compared to 15 per cent in the previous fiscal. Cisco Network Academy programme saw a 70 per cent growth in its Network Certification programme during the last fiscal.
Cisco is a market leader in most of the segments that it operates in India.
The market size of the Enterprise Networking segment is US$ 1087 million and Cisco has a 36 per cent market share • The market size of the Router segment was US$ 138 million. This grew by 37 per cent in 2003-04. Cisco commands an 85 per cent share in this segment • The market size of the Enterprise Switch segment is US$ 216 million and Cisco is the leader in this segment • The market for WLAN grew to US$ 11 million in 2003-04 from US$ 3 million in 2002-03. Cisco was the leader in terms of value • The Network Security segment grew by 30 per cent to US$ 47 million in 2003-04 and Cisco is the market leader
Awards won by the company in India In 2004, Cisco India received the following awards:
Frost & Sullivan Technology Award - Wireless LAN
• Frost & Sullivan Technology Award - Network Security • Voice & Data 100 Award 2004 - Enterprise
Networking • Voice & Data 100 Award 2004 - Wireless Networking • PC Quest Users Choice Award - Network Switches and Routers • PC Quest Users Choice Award - Wireless Networking • Data Quest Award 2004 - Best Networking Vendor
Factors for success
Proactively sensing market potential With the Indian BPO industry growing fast and global participation of Indian firms on the rise, India has emerged as one of the top three markets, following USA and China for Cisco. Realising that there is an immense need for improving the networking infrastructure in the country, the company has taken the lead with its new-world technologies meeting the requirements of the growing industry. The company also focuses on the upcoming Small and Medium Enterprises segment.
Strategic partnerships
Cisco’s strategy of partnerships with other big players in the market has been a significant factor for high market share in the country. Cisco outsources product R&D to Indian companies and currently has three partners. Almost 60 per cent of the company’s revenues comes through the big network integrators.
Cisco has partnered with IBM India Limited and offers comprehensive and integrated solutions in India.
Organisational support
Cisco India enjoys full ownership of product development for some of its popular products. It provides continuous support to its customers through its development centre in the country.
With a motto that reads ‘Don’t ask for permission, ask for forgiveness later’, the company is able to attract many enthusiastic professionals ensuring freedom at work. The company has a robust
organisational structure providing managers with HR tools, technologies, online tools etc. giving them an edge over their counterparts in other organisations.
Cisco has taken a pioneering initiative of developing the market for networking equipment in the country.
The company has educated many professionals in the sector through tie-ups with various engineering institutions in the country, thereby increasing market awareness and market potential in the country.
Leveraging the India Advantage
India as a R&D hub
Recognising India’s wealth of software talent, Cisco established GDC in Bangalore in 1999. It is the largest outside the US. The centre plays a strategic role in Cisco’s global operations in deploying the solutions and products in the Internet economy. R&D work in India focuses on certain core technologies. Several products in Ciscos, stable have been developed entirely in India.
Cisco’s Bangalore GDC has 2000 plus engineers and is presently working with HCL Technologies, Wipro Technologies, Infosys, TCS, Satyam Computers, Hughes Software and Zensar.
Future plans
With its success in the Indian market, Cisco has big plans for the future. The company plans to expand its development centre at Bangalore to tap India’s large talent pool. It also plans to have more local academies in the country in collaboration with leading engineering colleges and other educational establishments to meet the growing need for networking professionals.
