Cisco Systems Inc, the US-based market leader in the development of Internet Protocol-based networking technologies, is credited with transforming the way Internet functions today.
Initially, the company used to manufacture only enterprise routing equipment. But these days Cisco sells a variety of devices for both enterprises and telecommunications carriers. These include ethernet switches, routers, IP telephony products and network security devices among many other things.
Today, over 85 per cent of routers and switches that the World Wide Web uses bear its logo. The company is also credited for riding the crest of the technology innovation wave and is to networks what Microsoft is to software and BMW is to cars.
The 16-year-old company is younger than Internet, but ranks immediately behind GE and Intel in revenues. John T Chambers, took charge of Cisco in January1995 as president and chief executive officer. He was instrumental in raising the company's revenues from a meagre $1.2 billion to a whopping $24.8 billion.
He is on an official visit to India from October 19-21 and will be meeting top government officials and industry chiefs. Answering a questionnaire, Chambers opens up his mind to Rajesh Kurup on Cisco, the competition ahead and about the industry.
During your last visit to India four years ago, you were expecting the country to contribute around 5 to 10 per cent of Cisco's global revenues in the next couple of years. Has this been materalised? What is the current ranking of the company in India?
India is one of the major contributors to Cisco's global revenues from the Asia-Pacific region, which contributes around 11 per cent of the total global revenues. As we don't focus on spilt revenues from the APAC region, it would be difficult to comment on the individual contribution of the country.
Cisco is the largest networking equipment company in India and the third largest communications equipment vendor in the country in 2004. This is according to a Voice & Data Top 100 survey.
You were of the opinion that Internet Protocol telephony, optical networking, security, storage and wireless are potential business opportunities that will help Cisco rake in revenues of over $1 billion. Is the potential of these technologies being realised and which of them look promising to Cisco? Also, what are Cisco's business forecasts for these technologies?
Cisco is a pioneer in routing and switching technologies, and continues to bank on innovative technologies to shape the future of Internet. We continue to make progress in advanced technologies from both order and revenue perspectives.
Security and IP telephony helped us to surpass the $1 billion revenue milestone, while home networking and wireless would help us gain our next $1 billion. We view these technologies as a part of an architectural network evolution with each one linked to every other technology.
Cisco has been investing in the 'next architectural phases of networking', with our Chief Development Officer Charlie Giancarlo overseeing the whole project. We are now seeking a single network platform that converges wired and wireless Local Area Network, mobile and cable networks, Internet and service providers.
This integration of open, IP-based networks, combined with business processes and applications, is the basis of the next-generation intelligent networks and what we see a driving demand for IP telephony, wireless LANs, security and storage over the next three to five years.
Of late, Juniper Networks has been beefing up its product portfolio with the recent acquisitions of Peribit in Wide Area Network optimisation segment and Redline, a manufacturer of network appliances that improve Web application performances.
Do you see Juniper emerging as a stronger player in the global networking industry?
Juniper Networks is one of the many companies that Cisco competes with. We focus on building a network architecture that integrates all services, including voice, security and wireless and other components necessary for building end-to-end mission-critical networks, rather than concentrating on one product or service.
We respect Juniper as a competitor, but we do not see them competing across the entire offering in the networking marketplace as Cisco does. And as more and more intelligence goes into the network, we believe that our company is better positioned.
Cisco has being talking about being a growth company, but the industry is of opinion that the growth of the company is not as per the market expectations. How do you address those concerns?
It's hard to grow faster than your segment of the industry. Yet, year in and year out, we have grown faster than our segment of the industry in each category. We have been growing pretty consistently in terms of our orders and we expect to grow at 10 to 15 per cent over the next couple of years.
But Cisco isn't that little scrappy start-up anymore, is it?
With the launch of many advanced technologies, we are still a start-up company in at least six new markets. The start-up mentality is part of the Cisco culture, that is to innovate, work hard and take calculated risks.
No other company in the history of IT has been able to be the market leader in more than one or two product categories, while Cisco is looking at being the leader in no less than 10 sectors.
We also surprised the market by moving into the application space. These show that Cisco has the drive and energy that is normally associated with a start-up firm.
From the perspective of an industry expert, what do you think are India's strengths from a technology point of view that will chart the country into a phase of economic growth?
India's has a willingness to change and a culture that stresses on the importance of education. The country is building a broadband infrastructure and is thinking about the future in terms of infrastructure and education with a favourable environment for innovation and partnerships. The country also has a supportive government.
Faced with intense global competition, the domestic Indian industry has realised the importance of investing into IT infrastructure to adapt quickly to rapidly shifting market and consumer dynamics. The outsourcing industry, another heavy user of networking gear like routers and switches, is also booming.
The country is also a ready consumer of advance networking technology. IT Services and BPO companies understand the extreme importance of security in maintaining global competitiveness. Indian companies realise that if they lose their reputation and credibility in the market, they are done with.