March - 2005 issue > Feature: Network

By Pradeep Shankar

After capturing 75 percent of the networking market in India, Cisco is growing at a phenomenal rate. Behind this enormous growth rate, emerges an interesting aspect: Cisco’s India strategy. It is uncharacteristically audacious and charming in its apparent simplicity. Ranganath Salgame, President of Cisco (India and SAARC) gives insight into the company’s new business strategy and focus in the Indian market.

“Our growth rate in India last quarter has been 100 percent year-over-year. We are certainly happy with the investment we have made. The mood is terrific…the economy growth is spectacular…it is a very exciting place to be,” says Gordon Astles, President of Cisco Systems for Asia Pacific Region. Thanking some 600 customers, partners, resellers and media personnel present here in Bangalore he seems to be packed with energy.
One can tell from his speech, both on and off the stage, India’s esteemed-position on Cisco’s growth map. The first blip of India’s importance on Cisco’s radar came when John Chambers, President and CEO of Cisco visited India in 2001. He had then said that “less than one-half or one per cent of his business comes from India. I think it’s going to be five or 10 per cent.”

Chambers is right since Cisco India is in line with his predictions. Since his visit, Cisco India’s revenues and market share have grown consistently—higher than any other MNC in the country. Today, India is one of the top three markets for Cisco and contributes close to three percent of Cisco’s $22 billion revenue.
Consistency is a factor Chambers and Astles seem to highly favor. They believe India will continue to be one of Cisco’s fastest growing markets, and Cisco can create a market especially for them.

Cisco’s investment in India is significantly increasing from the initial $200 million in 2001. Recently Chambers stated that the decision to invest in India had “paid off handsomely.” Chambers’ enthusiasm is a reflection of Cisco India’s balance sheet and market share. From 37 percent in 2001, Cisco India is commanding an impressive 75 percent of the market share, monopolizing the network equipment market. Cisco is not only seeking to capture market share, but is also trying to mature the market and acquire a larger share while continuing to maintain its domineering status. “It is flying on the spectacular updraft of the increasing IT infrastructure spending by Indian enterprises,” network analysts say.

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