Cisco has posted seven consecutive quarters of declining revenue. But most analysts are relatively bullish on the company, as CEO Chuck Robbins tries to transform it from its hardware approach to one based on software and subscription revenue. And Robbins, who was in India last week on his second visit after taking over from John Chambers in 2015, says the networking company’s software and engineering talent in the country has become central to the transition. Excerpts from an exclusive interaction with TOI:
India has been a rapidly growing market for you. Now, with GDP growth slowing, how does the market look?
We remain optimistic. India has been one of the top performing countries for us in the last three years, and we expect that to continue for the next decade. India is important to us as a growth market and especially from an innovation perspective, given the engineering resources and the products that we develop here.
India is also important to us from the perspective of how countries are leveraging technologies that fundamentally change how they do citizen services, how they think about meeting their own priorities like the work we have done here with the Country Digitisation strategy.
Where specifically is the growth coming from?
We have had broad-based growth in India. We have seen a lot of growth in telecom. We have an exclusive partnership with Reliance Jio in building their IP(internet protocol-) based technology for mobile broadband. It’s the largest all IP mobile broadband network in the world. Additionally, with the government’s initiative to go for the national broadband network and our partnership with Jio, we have formed the foundation of connectivity to deliver a variety of services. Mid-sized enterprise, small-medium businesses have all been doing really well. We also see a lot of digitisation of public services happening, which is also fueling our growth.
In other countries, sometimes you see one customer segment doing well or a geography doing well, but here we see great balance across all verticals. This is why we see opportunity in India for a long period of time.
You have talked about India becoming an export hub. You have started manufacturing here. How is that going?
It is meeting our expectations and we are delivering on our commitments. It is a part of our overall Country Digitisation strategy that we launched a couple of years ago. Two years ago, Cisco had the Country Digitisation initiative in one country; today we have formal initiatives with 16 different countries. India has been the most consistent, aggressive and holistic country where we built out everything from national broadband, smart cities, cybersecurity, manufacturing and skill development. Manufacturing is a top priority for us in India as it is aligned with the priorities of the leaders of the country.
Does it make economic sense for you to manufacture here?
Apple has been asking for a variety of concessions to expand its manufacturing.
You can assume that there are requirements that we have to meet for our shareholders and our business. For us to decide (to manufacture), it has to be a good business decision.
Do you see a lot more investments going into manufacturing?
India is a huge market which we can leverage to service not only the Indian market but also other markets in the region.
How happy are you with your R&D centre in India?
We have 1,659 patents out of India, which is an average of two patents per week. Recently, we needed to add a product feature for another region and the team came to India to get the desired feature incorporated into an existing product. The India team did that in two days and that enabled us to get the deal.
About 60 per cent of our engineers in India are software engineers and that is a big part of where we are taking the company. We have a significant portion here of the team that works on our collaboration portfolio, one of the most consistent performing elements of our portfolio over the last 2-3 years. The other big part that happened here is the intuitive network that we recently launched. In order to be prepared for the launch, we had to re-write our core operating system that has been built over 30 years.We needed to modernise it so that we could program it to do things in a modern world, and a great deal of that work was done out of India. We have engineers here who have worked on all elements of our automation platform.
That is just the engineering innovation. We have also the innovation that happens in other parts of our business here too the huge portion of our technical services and centre of excellence for our advance service engagement that we do with customers. They do things like special development work and special coding.
India has exceeded our expectations. It has increased the capacity of innovation and is the second largest engineering campus we have in the world.
What strikes you about Indian engineers?
The Indian team gets quite energised when you give them something unique to do within a short period of time. I think their biggest strength is passion and desire to get to the outcome. Another strong point is the work ethics from the moment a project is defined till getting it to delivery. I think there is a sense of pride in making that happen. There is a certain relentlessness that’s unique and part of the Indian spirit that I see in our employees. They enjoy the challenge and that’s the future of what we want to do as a company.We will continue to build high-performance, custom silicon platforms that are going to increase the contribution of our technology solutions in this agile rapid development methodology.
(This article was originally published in The Times of India)