Cisco Systems Inc, which makes key equipment like routers that drive large computer networks and the Internet, has in the past decade addressed India's corporate sector and emerging industries like business process outsourcing (BPO) for which networks are critical. When Chief Executive Officer John Chambers visits India later this week, the focus will be on networked homes in which digital entertainment and personal computers come together. Chambers addressed some issues involved in an e-mail interview with Prerna K Mishra ahead of his visit. Excerpts:
Q: Why has the consumer segment emerged as a big focus area for Cisco in recent times?
A: Our industry is currently in the midst of a major market transition. We are entering the era of the networked home. Over 14 billion devices will be connected to the Internet by 2010 which means that consumers will be able to get what they want, when they want it and on any device they want, all over a wired or wireless IP (Internet Protocol) network. The networked home offers incumbent companies both threats and opportunities to innovate. Today, global service providers are in a race to provide broadband services to the networked home. New and emerging content and service companies are competing to fill the needs of the empowered consumer by creating new programmes and services delivered over the network, while manufacturers are developing new devices for consumers to take advantage of these trends.
Q: How does India fit into this transition?
A: During market transitions, organisations and countries that stay ahead of the market and innovate stand the best chance of accelerating growth. India has the potential to be one of the most connected nations in the world. India and its people - with their enormous talent pool, entrepreneurship and desire to be connected - represent a huge market opportunity.
Q What are the strengths that will drive India into the next phase of economic growth?
A: I think an important point to understand about India's growth from a technology perspective is their willingness to change and that it has a culture that clearly understands the importance of education. India is doing a very good job in terms of building out broadband infrastructure and thinking about the future in terms of infrastructure and education. Overall, India has a favorable environment for innovation and partnerships in addition to a very supportive government.
From a manufacturing and services industry perspective, there has been some maturing here due to de-regulation and privatisation. To continue to stay competitive, India realises the importance of investing in IT infrastructure to stay ahead of these market transitions.
This means investment in new technologies and India is rapidly becoming a ready consumer of advanced networking technologies. Businesses understand the extreme importance of enforcing network security measures and being proactive in addressing security concerns. They are also focused on increased productivity. India's investment will clearly position them for the future.
Q: Are acquisitions still a core part of Cisco's strategy?
A: There are three pillars to Cisco's innovation strategy--build, buy, and partner. And there is an additional pillar that I think will become very important in the future and that is collaboration. In some cases we will use our internal innovation engine to develop the technology ourselves.
A good example of this is TelePresence. Our internal emerging technologies group developed this technology from the ground up. In other cases we will acquire the technology or sometimes it makes sense to partner with a company that is already leading with a particular technology. Cisco succeeds because it is able to do all three of these things well. The fourth pillar, collaboration, will define how all of these different groups will interact and collaborate at faster and faster speeds together.
Q: The Indian market is filled with smaller players. Do you think they are slowly eating into Cisco's market share?
A: I have done business in Asia for almost 30 years and I have said many times before that many of our competitors in the future will come from Asia. We believe that competition is good for the industry and it is good for business. It has a way of keeping you on your game and encouraging you to stay ahead of market transitions. Our industry has seen several generations of competitors and the lesson for us all is that you can never become complacent with where you are. Many of the competitors we believed could be our competition just a few years ago are no longer around. In the end, you need to stay focused on listening to the customer and moving into new and adjacent markets.
Q Cisco recently changed its logo and has embarked on a new global branding campaign. Does it indicate a change of philosophy?
A: Cisco is at the heart of a market transition that is changing the face of networking. Cisco's products span across networking and into new areas including voice, video, data, storage, security and entertainment.
The network is the fabric that is changing how we communicate, collaborate, entertain, and do business. The new positioning campaign captures the evolution of the networking industry.
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