March - 2000 - issue > Cover

It all started in 1995. Cisco Systems hired Anil Batra, a 23-year industry veteran, and ex-country channels manager for Hewlett-Packard, India to establish its operations in the Indian subcontinent. The networking industry was still in its infancy in the country and was dominated by the trio of Bay Networks, 3Com and Cabletron. Together the three American companies controlled over 60 percent market share. Even though Cisco was one of the world’s best-known brands, it was no guarantee for success.
Batra remained a sole employee of the company in India for a long six months during which time he was a salesman, technician, engineer, strategist, and public relations maven, all rolled into one. The second employee came only six months later.

“The most difficult thing reaching the market,” says Batra, as he looks back. “We started out small, so the challenge was how to satisfy the need of customers in such a large country.” Raising awareness and capturing the mind share of customers was imperative. “We had to make efforts to educate partners about networking and its potential, and about Cisco products to establish this,” he adds.

Today, it is all history. Cisco is the undisputed monarch of the networking industry in India. For the fifth year running, CSPIL posted a growth rate of over 100 percent in the region. With offices in New Delhi, Bangalore, Chennai, and Calcutta, over 100 employees, and a strong network of distributors and integrators, Cisco is the largest established networking company in India. Almost all the leading integrators in India like Compaq India, Datacraft RPG, HCL Infosys, Tata IBM, Tata Infotech, and Wipro Infotech promote Cisco products. It is the leader in all the three product categories that it competes in — routers, switches, and remote access servers (RAS), holding a near monopoly in the router market.

In the fiscal year 1998-99, Cisco bagged 75 percent share of the total routers market in India. This comprised around 50 percent of its total revenues with sales touching Rs. 70 million ($17 million). Switches accounted for 40 percent of its revenues and the RAS market contributed 10 percent. Companies like 3Com, Cabletron, D-Link, UB Networks and Bay have all been relegated to the status of minor players.

The Ascent

How did Cisco come to dominate this market so quickly?

“The Cisco culture, the team we built, the environment, open communication – those were primarily the reasons we could attract the best talent in the country and build a solid team,” says Batra. He strongly believes that the employees, their commitment to customer satisfaction and the company’s work culture have contributed to the success in India.

“India is very industrialized,” he says. “We have an educated workforce and a large software market. Once the economy opened up in 1991, there was a lot of desire in corporations to use technology to improve the efficiency and productivity of their operations.” Despite some recession in the economy and increased taxes on networking products, there were several positive developments that offset the initial hiccups Cisco faced in India.

“Among enablers of growth were the government’s openness, willingness and initiative to establish an IT (information technology) task force, its ISP (Internet Service Providers) policy, the accelerated technological pervasiveness in India, and improved communications infrastructure,” Batra says.

Since 1997, there has been an increased awareness that India would have to improve and reform its infrastructure if it aspired to enhance its stature in the global market. The IT task force took up the infrastructure drive, halved the rentals on leased circuits and abolished surcharges, permitted cable operators to provide Internet access, and set up public tele-infocenters to offer multimedia services. As the marketplace in India transformed itself for the digital era, Cisco capitalized on several developments.

Connectivity and greater bandwidth became very important for organizations looking at implementing complex applications like ERP (enterprise resource planning), Electronic Data Interchange (EDI)/e-commerce, as well as companies going in for simple initiatives like web hosting, e-mail, and intranet. An able and accessible network became the need of the hour. The price of data communication services like leased lines, VSAT (very small aperture terminal) access, and Internet access dropped steadily. These conditions spurred the deployment of networking products in India. Cisco and its team worked hard to position itself in the forefront of this growing market. It organized seminars, workshops and conferences about networking and Internet access, for customers, partners and the general public.

“Education is a major thrust for Cisco. We sponsor educational institutions and professors all the time,” says Batra about their involvement with the academia in India.

Not only is Cisco India numero uno in the country, but also it ranks among the top 10 percent performers for Cisco in its Asia-Pacific marketplace.

Cisco’s exceptional performance in India was very encouraging for Cisco’s global headquarters. Last June, it announced a growth strategy and an investment of $20 million in India. The plan included more than doubling the company’s staff strength in India over the next 12-18 months and the conversion of the company’s representative office status to a that of a wholly owned subsidiary, Cisco Systems India Private Limited (CSIPL).

Cisco also announced the opening of a Global Engineering Development/ R&D Center in Bangalore to conduct development and testing of Cisco IOS software, network management software, ASICs (Application Specific Integrated Circuits), and other technologies like ATM (asynchronous transfer mode) and VOIP (Voice Over Internet Protocol) in Bangalore. Viewing India as a potential hub for internetworking professionals in the Asia Pacific region, Cisco Systems also started its first Cisco Certified Internetwork Expert (CCIE) test lab in Bangalore in October. Equipped with state-of-the-art technologies, the lab would provide the CCIE hands-on testing leading to certification in the area of routing and switching. This lab and training facility is the first of its kind in India and saves cost and time for networking professionals who had to previously travel abroad to get the certification.

Like its parent company, Cisco India serves large enterprises, service providers and small/medium companies. Roughly 57 percent of its business comes from the larger enterprises, 30 percent from service providers, and 13 percent from small businesses. But unlike its parent company, CSIPL sells its products and services only through partners, distributors and system integrators in India, Nepal, Bangladesh and Sri Lanka. It does not do direct sales in the region. CSIPL follows its parent company’s global networked business model, taking advantage of seamless information flow within organizations and countries with the use of intranets.

The current year promises to be a busy one for CSIPL as it advances into the new millennium. “How we consolidate our position in the traditional markets will be very important,” says Batra. “We have several new opportunities, especially with the voice-over packets – how we deploy those in a cost-efficient manner will be critical.” With its recent alliance with IBM, Cisco expects its reach to be even more pervasive in the Asia-Pacific region.

“IBM is well known especially in e-business in this region,” says Batra. “Together we are offering a full spectrum of solutions – Cisco will provide the hardware setup and infrastructure and they will provide the solutions using our products.”

About Employees, Incentives and Retention

Batra takes pride not only in Cisco’s supremacy in the Indian markets, but in the talented team of professionals the company has hired in the country. “We have a much lower turnover rate compared to the industry,” he claims. This is because the company offers a good, invigorating environment and fosters professionalism, team spirit, and open communication among employees.

“Our employees work on world-class technologies, not mere maintenance or low priority projects as in some other MNCs,” says Batra. CSIPL follows policies and framework provided by the parent company in San Jose, Calif., but “the environment, the place, the strategies, the customer needs are all different for India. So we operate quite independently in those areas,” states Batra. CSIPL offers Cisco stock options in addition to standard employee benefits.

“We believe that upgrading our employees’ knowledge base is key to their growth. I make sure that every individual gets at least two weeks of training – either in India or abroad,” asserts Batra. “Our employees are also big users of e-learning and web based training programs. So they have the ability to follow self-paced learning programs round the clock.