Cisco sees bigger enterprise play for telcos with 5G

The move to 5G is expected to create bigger shifts in the power dynamics for technology players, admits Cisco, which sees service providers such as Reliance Jio and Airtel driving business engagements instead of Cisco taking the lead.

“For service providers, 70-80 per cent of the revenues come from selling directly to consumers. About 20-25 per cent come from enterprises. But 5G allows them to change that mix drastically. Our estimate is that it will be a 50-50 game. That means service providers have to develop skills and solutions to provide solutions on 5G for enterprises,” Sameer Garde, President, Cisco India and SAARC, told BusinessLine.

The shift in the customer profile for telcos means they are engaging with enterprises and other businesses a lot more than they ever did, making their relationships with enterprises closer than what vendors like Cisco currently have.

Garde expects 5G deployment to happen much faster in India than that of 3G or 4G. Thus, the shift in these power dynamics is also expected to happen more rapidly.

“Today, enterprises are talking to service providers first before they talk to Cisco when it comes to deploying software-defined network. When a bank bought a router earlier, they used to talk to us and we were the main point of contact. Now, they want to talk to a service provider first for software-defined WAN and then decide who the vendor will be,” Garde said.

The next thrust

ISP engagement is, therefore, the next biggest thrust for Cisco already, making them a big channel partner instead of them being just a customer until now. “Going forward, service providers will be very strategic partners for us. It is a massive initiative we are investing in,” Garde said.

To boost this partnership with service providers, Cisco has quietly been working with Vodafone to develop capabilities in offering Wi-Fi as a service. The California-based firm also announced a partnership with Airtel in April to provide connectivity solutions to small and medium business.

Cisco is also engaging unlikely partners to spread its connectivity solutions deployment in India. One such is Google, which is working with Cisco to offer free Wi-Fi at major hotspots in India. Although the initiative sounds altruistic, Garde insists it has a strong business case behind it, without disclosing the specifics.

Focus on SMEs

On one hand, from its free Wi-Fi offering with Google, Cisco will earn some revenues through advertising. But the bigger benefit is getting closer to SMEs who can now start connecting to the internet through the free Wi-Fi. SME is a segment that Cisco confesses to be a weak point for the company.

“The SME market is pretty significant for us and growing. It is one of the big investment areas for us now. We have talked about acquiring 90,000 SMEs in three years, but we want to accelerate that. Instead of the 25 customers that we bring in per day, we want to see how we can ensure we bring in 25,000 customers. I want to get there,” Garde said.

Partnerships will be the core for Cisco’s SME strategy and Garde hinted at more partnerships that Cisco is working on for its security business to allow it to scale substantially.