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Cisco: Cloud, IoT and big data to drive company’s growth in India

April 12, 2016

Cisco: Cloud, IoT and big data to drive ...

With a massive amount of digital potential waiting to be unlocked, India presents a significant growth market for Cisco.

With a massive amount of digital potential waiting to be unlocked, India presents a significant growth market for Cisco. This fact is reiterated in the company’s recently released results for the quarter ended December 2015, which showed that Cisco’s Indian business grew 23 per cent during the period. In contrast, its businesses in developed markets posted a moderate performance. While revenue growth in the Americas remained largely flat, revenues in Europe, the Middle East and Africa saw a decline of 1 per cent.

Multiple factors have made emerging markets like India, China and Indonesia growth centres for global vendors such as Cisco. The new technology roll-outs, burgeoning enterprise markets and under-explored broadband potential in India present a steady growth roadmap for the company. The proliferation of business devices and machine-to-machine connections, along with more scalable services and applications with additional storage needs, is creating new network and computing requirements.

In addition, government programmes like Digital India, Smart Cities and Make in India are set to give a major push to the vendor’s business in the country. Cisco is also optimistic about internet of things (IoT) uptake in the Indian market to enable digitisation.

In terms of the Indian market share, Cisco claims to be the leader in seven out of the eight segments that it tracks. It has gained a large market share in six out of the eight segments. It has also witnessed significant traction for its enterprise solutions, particularly its Unified Computing System, networking and security solutions.

Growth opportunities

Cisco is eyeing opportunities in smart city projects. In the past two years, it has closed several deals for such projects in Navi Mumbai, Pune, Jaipur and Lucknow. It will provide the networking infrastructure for these projects and also work with partners that provide solutions like smart street lighting, traffic management systems, CCTV security surveillance systems, and water management systems.

In November 2015, Cisco and CH2M announced a new global strategic partnership to provide urban planning and design, smart technology integration and programme delivery services. Their first integrated delivery will be to Shendra-Bidkin in Aurangabad, an industrial smart city being developed along the Delhi-Mumbai Industrial Corridor. CH2M is serving as programme manager for building Phase 1 of Shendra-Bidkin, while Cisco is developing its Master System Integration Plan as part of the programme management team.

In a bid to leverage the Make in India campaign, the company recently announced its plans to set up its first manufacturing unit in Pune. It has also invested heavily in the start-up ecosystem in India. Currently, it has investments in 25 start-ups.

New focus areas

In recent years, Cisco has started focusing on new areas like cloud, mobility, IoT and big data. It is doing so at a time when the growth in its traditional revenue centres like the switching and router markets is witnessing flattened growth. Though the company continues to lead the space (Cisco’s share in the global Ethernet switching market stood at 61.6 per cent during the third quarter of 2015), its year-on-year growth was merely 1 per cent. It held a 59.1 per cent market share in the 10 GB Ethernet segment, down from the previous year’s 63.4 per cent. Cisco’s service provider and enterprise router revenue decreased 2.3 per cent year on year.

In such a scenario, the company considers cloud, IoT and big data as emerging growth drivers. It recently partnered with its peers in the IoT space to form the Open Connectivity Foundation, which seeks to define interoperability standards for the billions of internet-connected devices that are expected to enter the market in the next few years. The other founding members include Microsoft, Electrolux, General Electric, Intel, Qualcomm, Samsung, ARRIS, and CableLabs.

Cisco is banking on mobility, cloud and computing technologies to garner demand for its networking products, which will enable the digital transformation of enterprises dependent on technology-enabled networks. The company believes that 5G will play a pivotal role in driving the digitisation process. 5G is part of its overall mobility technology group, which focuses on enhancing consumer experience. It is led by Starent Networks and has a small group working in India as well. During the GSMA Mobile World Congress, Cisco also announced its collaboration with Ericsson and Intel for developing its first 5G router.

Going forward

India’s importance will continue to strengthen in Cisco’s global portfolio in the coming years. The company’s business will gain traction as enterprises prepare for a massive digital turnaround.

 
 

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