The Hindu Business Line : Cisco targets services sector for growth

Coimbatore, Feb. 10 Cisco Systems perceives ‘IT services’ as the next wave of growth for the company with the IT services and BPO companies moving towards IP-based next-generation core networks and software companies expanding their presence in India.

“IT services as a vertical is unique to India. And this verticalisation has helped Cisco build domain expertise,” its Senior Vice-President (IT Services) for India and SAARC, Mr Ajay Goel, said.

Stating that the rapidly expanding BPO and IT services companies’ strong dependence on robust, multi-faceted, scalable, expandable and secure network infrastructure needs made the sector a key segment for Cisco, he said “our focus areas would be to energise foundation technologies like routing, LAN and WAN switching and leapfrog advanced technologies like Unified Communication, Security and Wireless.”

Responding to an e-mail on the company’s plans for the IT-BPO services companies, Mr Goel admitted that the initial focus of the industry was on building a strong and reliable backbone and using technology as a selling point.

“Today, BPOs are increasingly using the technology infrastructure as a business differentiator and prospective customers evaluate a delivery centre’s maturity to spruce up their application and networking infrastructure.

The IT services sector therefore is a keen adopter of advanced networking solutions,” he said.

Cisco’s product suite for the BPO industry comprises Cisco AVVID (Architecture for Voice, Video and Integrated Data), IP Contact Centre (IPCC), and multimedia contact management to contact centre agents over an IP network.

Asked if smaller players increased their IT spend and to what extent, he cited a recent report by The Access Markets International (AMI) Partners, which said that 2008 would be a strong growth year for small and medium businesses (SMBs) IT investments in the Asia-Pacific region. India will be among the fastest growing market in the SMB space with IT spend set to grow over 20 per cent in 2008 to $9.6 billion.

“Strong traction in key vertical sectors such as services, banking, finance financial and manufacturing will drive the growth in SMB spend in India,” the report said.

Asked if Unified Communication Solution was still limited to larger enterprises, he said such larger enterprises relied on technology like Unified Communications to improve efficiency and ensure future profitability, while SMBs adopted technology to stay competitive.

“We have addressed the networking technology needs of SMBs and developed end-to-end networking solutions specific to SMB. For small businesses wanting to reach, serve and retain customers, we have introduced the Smart Business Communications System. Our Unified Communications 500 Series for Small Business provides voice, data, voicemail, Automated Attendant, video, security, and wireless capabilities while integrating existing desktop applications such as calendar, e-mail, and customer relationship management (CRM) programs. This easy-to-manage platform uses business-class, proven unified communications technologies to full advantage and supports flexible deployment models.’

To a query on making Unified Communications popular among verticals other than IT services, he said “a strong traction is being seen from manufacturing, banking and finance verticals in adopting IP-based communication solutions.”

On the challenges faced by the company while servicing the ITeS industry, he said “this industry in India is dependent on international markets and the appreciation of the rupee has not had a major impact on the top line of businesses, but profit margins will see a squeeze. This sector is looking at ways to hedge against future appreciation.”

Cisco’s solutions, according to Mr Goel, would help the sector achieve profitable growth by increasing workforce productivity.

“Since the industry is booming, there is also a need to upgrade technology at a rapid pace. The need for BPO providers to have state-of-the-art network infrastructure is a cause of concern in terms of the pressure it puts on the organisation’s capital expenditure. Cisco Capital has worked out leasing and financing options to allow BPO customers the flexibility of upgrading their technologies frequently and whenever required.”