Rank 16: Cisco Systems: Switching Success Routes

Smart realignments, specialized offerings and a strong network of

1,500 resellers–Cisco had this smooth troika guiding it through the rough year

and showed growth, even as the overall networking market shrank. Financial year

2001-02 saw Cisco setting up its largest R&D center outside the United

States–in Bangalore, entering into memoranda of understanding with premier

educational institutions to develop networking talent. Hogging 65% of the

marketshare in the local area network (LAN) space, the company continued to be

bullish on India–and easily retained its leadsership position in the market,

registering 22% growth in revenues to record total takings of Rs 930 crore.

Performance Highlights Set up its largest R&D center outside the USA in Bangalore Flat router market resulted in lower sales Switches brought in 36% of the revenues Strengths Cisco’s portfolio of IP-based networking solutions Dominance in the router market, with 83% share Strong network of 1,500 resellers Weaknesses Dependence on the weakening ISP market Growing threat from upcoming players with aggressive pricing RAS market still dominated by competitor CommWorks Cisco Systems India Pvt Ltd. l Startup: 1995 l Products & services: Networking products like routers, switches and RAS l Address: The Great Eastern Center, 70 Nehru Place, New Delhi 110019 l Tel: 6233201-206 l Fax: 6233207 l Website: cisco.com/global/in

However, a negative service provider market, where everybody was moving with

caution, affected the company’s performance. New markets such as the carrier

optical space did not materialize, and it was the enterprise segment that did

the rescue act. The government’s aggressive decisions that liberalized the

telecom sector enabled quick network rollouts–with key orders coming in from

Andhra Pradesh and Gujarat. Cisco’s IP-based networking solutions also picked

up among enterprises across many verticals–Asian Paints in manufacturing;

Infosys, Wipro, Digital and Cognizant in the software segment; Talisma, EXL,

Spectramind, and Manjushree in the contact center space; and IIT Kharagpur, IIT

Kanpur and WEBEL in education. In the service provider space, the company

deployed networking solutions for BSNL, Tata Power, Satyam Infoway and Bharti

Broadband.

The poor Internet access market, however, resulted in flat growth in the

routers segment, for the first time in many years. While routers still

constituted a bulk of Cisco’s revenues (38%), it grew by a mere 2%. Switches

grew by 32%, contributing 36% of revenues. Niche technologies included WAN

switches, IP phones, security solutions, wireless products and IP contact center

solutions. The company expects growth from the service provider market this

year, with increased activity in the NLD/ILD space.