Cisco on Wednesday announced its first manufacturing facility in India at Pune. Cisco and the Government of Maharashtra also announced new local strategic initiatives to help the digital transformation of the state which includes the citywide deployment of a smart city framework to roll out Cisco Smart City solutions in the city of Nagpur, digital learning for students and skills development for local entrepreneurs in Dharavi to create an eCommerce hub, expansion of the Networking Academy program, and digital education and healthcare initiatives in Fetri village.
In a conversation with BusinessLine, Cisco's global CEO Chuck Robbins talked about how he expects India to be the hub of innovation for Cisco not just for manufacturing but overall development of products.
We've been here 21 years all the way back from 1995 and then when we made the big bet to make it our second global headquarters almost a decade ago, that was a very big move and has paid off very well for us. We've had virtually every element of our business represented here and it’s a source of tremendous innovation on the development side.
A year and a half ago we had our initial meeting with the Prime Minister and then we launched our digital efforts in alignment with the priorities of the government here.
What is also aligned to the digital agenda is the launch of manufacturing that we are announcing today. I think of this as a 360 degree country for us because its a great business opportunity for us.
It is a tremendous source of talented employees across our business functions. It is a country that has a leader who believes in the power of what technology can do for the future. And now we are going to start manufacturing here but over time we would love to use it as a hub to deliver products in other countries as well.
Are you looking at investing in Indian startups? What are the technology areas that would be of interest to you?
I think over the last couple of decades, maybe about a third of companies we acquired, started out as investments. In many cases, these companies become a part of our ecosystem in creating value for the customer. In some cases, our investments let us learn about some of the emerging technology trends where some of the small players are doing interesting things.
There's a lot of reasons (to invest in Indian startups) and it makes sense for us. And if one turns out to be a company that we'd like to acquire then that's great as well.
We expect startups in the area of IoT and smart city to really flourish in India.
You've announced $10 billion investment in China, which has shifted a negative growth to positive in the country. Can we expect similar investments in India as well?
We have invested pretty significantly with 11,000 employees here and a pretty big campus. We're beginning the manufacturing journey today. Those investments grow as the opportunity grows. You see some of the investment announcements we make around the world, those are generally a combination of what we've done here--we've got a campus and employee base, we've got the manufacturing, we have investments in network academies. We have 24,000 students that are currently being trained in Cisco Network Academies and our commitments is to drive 250,000 students through that by 2020.
The investments we make here would be for all of those. We also have a venture investment here for startup community. So it is multi faceted and we will continue to invest because we just think this is a fantastic model.
Government is the biggest spender on IT in India. But increasingly the government is trying to push for locally sourced components in some of the largest projects. With your new manufacturing facility in place, what new opportunities do you expect in government business?
From a government's agenda standpoint, things have accelerated significantly. The first couple of years were planning, execution, plans put in place. Over the next two years, we see a lot of work actually happening on the ground. Our strategy has been to try and localize as much as possible.
We are doing a lot of local innovation and creating products to suit the Indian market. We are working with local partners such as L&T, IL&FS and build infrastructure, which will be critical going forward.
We are looking at local startup community and engaging them into the whole ecosystem. Local startups are becoming a part of the smart city work that we do. Our localization strategy here is not just about making products here but about full creation of the ecosystem that has been very helpful in the execution of these projects.
Over the next 2-3 years, our participation (in government contracts) will also go up as well.
There have been a lot of MoUs signed in the smart city area but do you see that translating into big wins for you in terms of large contracts?
It is amazing when we think about the smart city initiatives because we have been a champion of this capability for almost a decade and it's so rewarding for us to get to a point where the reality of the capabilities we're beginning to see come to life and to have so many opportunities in India where your leadership believes this is fundamental to the future of India. We have more of these projects going on here than I think any country in the world right now.
We've had good wins in India. Nagpur has been a recent one that the Maharashtra government has decided to move forward with. That's a very large scale deployment--the largest we've seen in the country so far.
We've done work in Jaipur with Jaipur Development Authority where the initial focus was on tourism, we've taken that into transportation. We've worked on many safe city projects--Lucknow is a showcase for us. So we are seeing large scale deployment.
It's definitely been good so far, but it is just the beginning of the journey.