Networking major Cisco is seeing strong demand for its software-as-a-service (SaaS) solutions from small and medium business (SMBs) in tier-II and tier-III cities of India as internet users rise and the “everything-as-a-service” model gains popularity. Gartner predicts that over 85% of organizations will embrace a cloud-first approach by 2025.
According to Cisco’s annual internet report, Asia Pacific region will have 3.1 billion internet users (72% of regional population) by 2023, up from 2.1 billion (52% of regional population) in 2018. By 2023, Asia Pacific will have 13.5 billion networked devices/connections, up from 8.6 billion in 2018.
“To keep pace with evolving consumer needs, at Cisco, we are catalyzing innovation across areas like cloud-delivered cybersecurity, collaboration, analytics, and data centre. We have demand originating not just from large businesses but also from small businesses and tier-II and -III towns,” Daisy Chittilapilly, president, Cisco India and SAARC, said in an interview.
Traditional or non-digital native sectors like manufacturing, government, healthcare, logistics, education, and agriculture are increasingly embracing technology to improve efficiencies and unlock new value. “We have seen good traction for our SaaS and networking offerings from these sectors,” said Chittilapilly.
Analysts believe SMBs in India are increasing their investments in technology through the SaaS model. “A primary reason is that SMBs don’t have a large internal IT team to manage their technology backbone and need integrated as well as easy-to-use solutions which SaaS offers through opex-led models. For instance, Cisco has brought a range of SMB-centred solutions through Cisco Designed, a suite of tools to help SMB clients across network, collaboration, compute, and security,” said Nitish Mittal, partner, Europe Technology Practice, Everest Group.
“There is tremendous opportunity in the SMB segment but requires careful market selection since the market can be quite fragmented. The primary challenge remains the long tail that the SMB market represents, smaller deal sizes, as well as longer sales cycles to sign and onboard clients,” added Mittal.
Cisco’s competitors like Dell and HPE are also betting big on the SMB segment in India by offering tailored solutions.
Cisco is also focussing on building a strong cyber security portfolio as security has become a top priority with businesses accelerating their digital transformation. Cyberattacks have increased by almost 500% from pre-pandemic times to 11.5 lakh incidents in 2021, according to a report by CERT-In.
“As the threat landscape continues to expand and become more complex, at Cisco, we have been focusing on building a comprehensive portfolio that ensures near-infallible, end-to-end security of newly distributed enterprises,” Chittilapilly said.
As India gets ready to roll out 5G, Cisco is building partnerships with leading telecom providers to stay ahead of the game. Cumulatively, the economic impact of 5G is projected to hit $1 trillion by 2035 in India, according to the Telecom Regulatory Authority of India (TRAI).
“We believe that 5G will be a key growth driver for Cisco in the low-touch economy. To fast-track the deployment of 5G, Cisco is building the internet of the future. Our network architecture centres on silicon, optics, software, and security, powered by throughput, AI/ML, IPV6, telemetry, and industrial IoT (IIOT). We are engaged in 360-degree partnerships with all leading telecom service providers to prepare their networks for 5G by enabling an open, intelligent, and secure network platform, enhancing their go-to-market strategies and ensuring greater returns on their 5G investments,” Chittilapilly said.
Globally, Cisco invests around $6 billion annually in R&D. Chittilapilly said the networking major is currently “rebalancing” its R&D investments to focus on “critical areas for the future like cloud security, cloud collaboration, key enhancements for education, healthcare, etc., increased automation in the enterprise, the future of work and application insights and analytics.”