BANGALORE: Cisco Systems completed 10 years of operations in India this year. The subsidiary, in the last decade, built a strong foundation, replicating its success by building up reputation of product innovation, increase of market share and customer support and increasing its commitment to India. From 1994-2004, the networking leader witnessed a major growth in the country, setting the new standards and achieving its objectives. Currently, Cisco Systems India at the crux of a major revolution and trying to grow to next level in 2004-2014. Ranganath Salgame, President (India & SAARC), Cisco Systems, shares the company's business development strategy in India and SAARC for the next decade, in an interview with T.Radhakrishna.

Excerpts.

Cisco Systems started its liason office in 1994 and opened full-fledged office in 1996. For Cisco, the first 10-year operation in India was very important. During this period, we got to know the networking market here that is growing slowly and steadily. Cisco is building up its reputation of product innovation and good customer support.

At present, we are at the crux of major revolution driven by many factors, including economic growth, GDP and macro economic. It is a phase, where Indian global companies are really at mature point to understand the importance of IT being played an important role in their businesses. Our objective for next 10 years in India is taking Cisco's growth to next level. That next level is significant size of business, strategic market globally, etc. Last quarter (Q4) globally, Cisco grew 100 percent YoY. We are growing faster than the market. In India, Cisco is growing 46-47 percent YoY -- the highest for the company globally. The growth of Cisco India is almost double of the industry's 19-25 percent growth.

A Fortune 1000 company in US, Europe and Japan spend about 8 percent of their revenues on IT while in India, domestic companies spend 1-1.5 percent of their revenues on IT. Today, Indian companies are operating in open and free market, competing with the global companies in India and abroad, hence IT infrastructure should be at least at par with their competitors in order to be global player.

IT infrastructure – including SCM, Networking, etc., is the key driver for the growth of the companies. So it is estimated that the IT spending by the Indian companies, which are ambitious such as automotive, healthcare, pharmaceuticals, manufacturing, etc, is expected to be increased by 0.5 percent, increasing to a total of 2 percent. If it grows up to 2-3%, it is going to be a huge market. Today, Indian companies spend Rs 33,000-crore on IT infrastructure. It is expected to go up, much more than what apex bodies predicted, I am told.

For Indian companies, trying to tap the big market outside, have to be electronically enabled themselves. These are the reasons why we believe that India is on the crux and have the massive market expansion. Already companies have started realizing the same.

Yes. They are. For example, State Bank of India – India's largest bank and oldest bank in the country - is one among them. It is the biggest customer of Cisco Systems. The biggest enabler for SBI to compete with the global brands is technology. That is the example of Indian companies who are thinking ahead and taking leadership positions. They have realized that IT is the mandatory to compete in this market.

There are three or four verticals. On the top is service provider (Telecom). Telecom is expanding in India leaps and bound with major players such as VSNL, Bharati, Reliance, Tata, Sify, etc, making huge investments on the networking. That is happening in the areas of wireless, broadband, etc.

Other verticals that are making major investments on networking are IT services, including ITES-BPO. The sector and its business model that made India on the world map is driven by single factor that is networking. The ITES-BPO market today is worth of $11 billion and it is driven by the technology.

Other two key sectors are manufacturing and banking. India's banking system in the country is very robust. What they lack is automation. The trend in India is that banks are going to invest more on IT.

As part of overall plans in the country, Cisco Systems has divided the operations into four separate vertical business groups that will focus on IT services, enterprises and SMBs, service providers and governments. We have appointed senior managers to run these groups. We see the first three divisions contribute major revenues while the IT market in government is significantly increasing. Under the government division, we focus on three segments – central government, state government, R&D and other institutions