The Hindu Business Line : Cisco turns focus on SMEs in Tier II cities

ALTHOUGH networking equipment major Cisco Systems is under margin pressures abroad, it is very bullish on India where Voice & Data indications have put its growth at about 40 per cent year-on-year for the fiscal ended July with revenues of about Rs 1,600 crore.

Mr Jangoo Dalal, Senior Vice-President and Country Manager, Cisco Systems India, did not disagree with these figures. In fact, Cisco is so bullish that it is planning a major entry not only into the small and medium enterprise space but also into the SME space in B and C level cities in the country, he said. This would be done in the next three to six months, he said.

Meanwhile, Cisco is investing more in its India operations and would be doubling its sales head count, he said. ``We have chipped down versions of our offers without sacrificing on their functionality. There is great traction in the market. We feel that by just focusing over there, our growth can be four-fold in a single year."

According to International Data Corporation figures, 40 per cent of all personal computer purchases were made in this segment, said Mr Dalal.

The SME market is a different one; and Cisco has found that there are some "great auto-ancillary units, and smaller 200-to-400 person pharma units in the country," which hold great promise.

This new SME-small town focus area is apart from its focus on the verticals in the large sectors. "We are very bullish about the manufacturing industry which is really showing up, then the banking, finance and insurance sector (BFSI), and education.

The Indian networking industry grew faster than Cisco expected; to align itself with the growth of demand, the company is reengineering a vertical focus for itself globally. The restructuring started in August this year — until then the company had segmented its operations along geographical lines in the country.

In manufacturing, for instance, corporates want customised solutions, often wanting their Supply Chain Management integrated. "We are talking to large, traditional manufacturers in the country who now have global ambitions," said Mr Dalal. "It brings much faster customer turnaround time."

Cisco's business is channel-oriented; Cisco meets the customer to architect solutions, taking the channel partner along. Channel partners could be vendors of the likes of IBM, HP or Wipro.

The combining of voice and data traffic for corporates along the same network brings return-on-investment in less than 12 months and sometimes, in just six months, according to Cisco India.

India, which was the ninth or tenth in Cisco's revenue earning list in the APAC region, is now among the top three, said Mr Dalal.

Cisco is also getting a strong R & D team in place. A lot of new additions in network management systems for Cisco are happening out of India, said Mr Dalal.