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Cisco has big plans for India

The networking major is likely to announce some strategic partnerships for contract manufacturing out of India, reports Prerna K Mishra.

india Updated: Dec 06, 2006 15:58 IST

In what Cisco Systems Chairman and CEO John Chambers calls the third phase
of expansion in India, after the setting up of Indian operations in 1995 and announcing a $1 billion research and development investment last year, the
networking major is likely to make India its global services hub. The
company is also likely to announce some strategic partnerships for contract
manufacturing out of India.

Even as the Cisco chief blew teasers into the air during the CEO's forum
organised by the Confederation of Indian Industries (CII) on Wednesday,
a formal announcement is expected to follow later during the day.

"India is the most interesting of all the countries undergoing a transition
across the world. We are working on how best to base our entire global
strategy out of India. We want to build global innovation out of the
Bangalore centre. After we brought all the functions to India in the second
phase of our growth, we want to build the strategy for globalisation from
this very country," Chambers said addressing a gathering of about 300 CEOs.

But even before Chambers makes the formal announcements, there are many give aways as the $30 billion major recently acquired land next to the Wipro
campus in Bangalore. The company has also decided to relocate Wim Elfrink,
who is the Senior VP Cisco Services to Bangalore. He has been rechristened
as the Chief Globalisation Officer.

In fact, India seems to fit in as a big piece in Cisco's globalisation
strategy. "Within Cisco, we started the journey for the transition where
networking was to become the platform for delivering all communication –
voice, video and data. The transition has already started showing results,"
he added.

Cost saving is just a colliery of this business transformation that is
achieved through collaboration and convergence. "Cisco saved $140 million on
travel by transending to the culture of virtual meetings. But that is
not the end objective of this transformation."

Cisco's Market capitalisation went up from $10 billion in 1995 to $110
billion in 2005 November. But, the company bounced to $164 billion in the market cap in December 2006 even though that year the market lost $2 billion,
falling from $60 billion to $58 billion between 2005 and 2006. "That goes to
prove that companies that change and adopt transition with ease emerge as
clear winners."

Chambers added that just as companies need to undergo transformation,
countries need it too. "Nearly 10 per cent of Cisco's growth today comes
form country transitions under which societies are transforming to give way
to a new middle class of consumers. And India is a frontrunner in this
space."