Cisco, which is into networking, security, collaboration, cloud management among other technology products and services and is set to celebrate four decades of its birth next year, has been facing growth challenges globally.
The firm, best known for its networking equipment, has seen its global revenues get stuck in the region of $48-51 billion for almost a decade before growing in double digits for the year ended July 2023.
Its India business, in contrast, has virtually doubled in the same period in local currency. Though the slide in the value of rupee over the years has meant the local business continues to contribute around $1 billion to the global business through the years.
Numbers collated by data platform VCCEdge, now shows that Cisco’s Indian arm broke out of the low growth trajectory with 40% jump in revenues. This came after the firm was slowly but steadily growing its operations in the country.
To be sure, the momentum seems to have continued in the current year. However, Cisco declined to comment on this article.
In its global annual report (Cisco follows August-July calendar), the company noted that for the twelve months ended July 2023, product revenue increased by 62% in India, by far the fastest rise among major markets, outpacing other high growth markets like Mexico and Brazil.
Cisco’s products business that is its mainstay contributing over three-fourths of total sales, straddles segments like Secure, Agile Networks (switching, enterprise routing, wireless, and compute); Internet for the Future (routed optical networking, 5G, silicon and optics solutions); Collaboration (meetings, collaboration devices, calling, contact centre and CPaaS offerings); End-to-End Security and Optimised Application Experiences (observability and network assurance offerings).
Product revenue in the APJC segment increased by 7%, driven by growth in the commercial and public sector markets, partially offset by a decline in the service provider market.
Cisco bets on India's digital demand to propel growth
Since 1995, Cisco has been focused on expanding its presence in India by offering innovative solutions and services to meet the growing technology demand in the region. But in the last 4-5 years, the company's growth has been particularly noteworthy and it aims at $1 billion worth of domestic production and exports over the next few years, Cisco Chair and CEO Chuck Robbins said on his visit to India in May this year.
“While India is an important market for Cisco, we don't share earnings numbers at country level as a matter of policy,” the company said in a statement.
Several key factors have contributed to Cisco's growth in India, including the increasing adoption of digital technologies, the government's push for digital transformation, and the rise of smart cities and Internet of Things (IoT) initiatives. Cisco has actively participated in various projects and partnerships in India to support the country's digital transformation journey.
As businesses of all sizes and sectors seek robust cloud-delivered security and collaboration solutions, AI and compute capabilities, and next-generation networking infrastructure to enhance their agility and resilience, Cisco sees many opportunities in the Indian market.
It has been closely collaborating with various government and industry bodies. In the last two to three years, the company has made investments in key areas such as fifth generation (5G), transportation, logistics, agriculture, and city management through its Country Digitisation Acceleration Program, with a significant portion in partnership with the government.
For example, in 2019, Cisco, along with Quantela Inc, Environmental Systems Research Institute (ESRI), and Amazon Web Services (AWS), partnered with the Ministry of Housing and Urban Affairs (MoHUA) to launch the Urban Observatory in New Delhi. The aim was to leverage data analytics to optimise city operations, improve governance, and enhance the economic performance of cities across the country.
In 2021, Cisco, along with ITC, Jio Platforms, and Ninjacart, signed memorandum of understanding (MoU) with the Ministry of Agriculture for pilot projects to help the Centre build a database of farmers in the country. According to the company, this initiative has unlocked the benefits of IoT sensors and data analytics to empower farmers in various states.
In the 5G space, Cisco is working closely with India's top two telecom carriers, Reliance Jio and Bharti Airtel, to build industry-first open network and cloud networking technologies.
This year, the networking firm announced its plans to begin manufacturing in India to expand its presence in the country. During his visit to India, Robbins revealed plans to establish a new manufacturing facility in Chennai, Tamil Nadu. “This investment will enable Cisco to meet the growing demand from Indian customers and drive more than $1 billion in combined domestic production and exports in the future,” he said.
The company's Chennai unit is working on two of Cisco's highest volume product lines: switching platforms, which are essential for data centre networks, and a cutting-edge routing platform that forms the core of 5G network infrastructure.
In 2018, Cisco had launched manufacturing efforts in India focused on domestic production. However, due to inconsistent demand and a lack of supporting ecosystem, those production lines were closed, the company said.
Robbins had stated earlier this year that the company now plans to export its "Made in India" products to countries in Europe and other nations, in addition to its existing exports from 17 other manufacturing facilities worldwide. The investment in Indian manufacturing capabilities will not only create around 1,200 jobs but also contribute to the local economy by supporting supply chain resiliency, reducing lead times, and enhancing the customer experience.
Cisco in fact is investing in a skilled workforce through the Cisco Networking Academy program. The company currently has around 15,000 employees in India with a presence in Bengaluru and other locations like Mumbai and Gurgaon. India serves as the second-largest R&D centre for Cisco after the US. The company is further focusing on the application space, modernisation, infrastructure, and cybersecurity to continue the growth momentum in the country.