Cisco foresees rapid growth

Cisco Systems, the global network infrastructure provider and prime player in the tech boom and bust that marked the beginning of this decade, is growing its Indian business "phenomenally", according to Rangnath Salgame, Cisco Systems president for India and SAARC.

"The cumulative growth in Indian networking market (Cisco's main area of presence) is likely to be 27-30 per cent in 2004-05 and we are likely to grow faster than that. This will enable us to continue to gain market share," Salgame added.

The company, which does not provide India specific figures, grew its topline in 2003-04 by an exceptional 46 per cent to reach Rs 1,850 crore, according to Dataquest.

An IDC report on the Indian LAN hardware market for the third quarter of 2004 placed Cisco at the top of the vendor list while noting the emergence of the Chinese firm Huawei. The market grew 20 per cent in the quarter on a year-on-year basis to reach Rs 422 crore.

The upbeat perspective is made up of both an assessment of the near term potential of the Indian economy made by Cisco last year and a significant package it has put in place to tackle the anticipated demand.

The assessment of Indian IT spend is based both on anticipated robust GDP growth and higher IT budgets by Indian companies seeking to meet global competition.

"All this made us in Cisco realise that we have to change ourselves to participate in this growth through investment and building the business," Salgame noted.

Cisco has now put in place a "changed go to market". "We are building a robust business infrastructure" which has involved setting up a spares depot in Bangalore and six regional 'rapid fulfillment depots'. More significantly, the company has launched Cisco Capital, a leasing arm, "the only networking company with such a financial arm".

The financing arm enables clients to treat capital expenditure as a revenue item by converting the payment into an annuity.

This ease of financing also enables companies to keep pace with technological obsolescence. The client does not buy the equipment but leases it and then exchanges it for newer equipment when that becomes available.

Along with this, Cisco has devoted attention to strengthening its already strong relationship with its implementation partners, helping them strengthen their own capabilities.