Cisco embarks on digital transformation

Cisco India, a part of San Jose-headquartered $47.14-billion networking and technology giant Cisco System Inc, is the epicentre of network focussed innovation, products and services.

The Indian subsidiary is helping its parent to come up with solutions in a world where software is playing a pivotal role compared with hardware. It also gives an opportunity to test these solutions in India where digital transformation is order of the day.

As the company is re-imagining the network for a multi-cloud world, India is also going through a digital journey and Cisco is finding more opportunity in data and security. The company is betting big on newer concepts such as intent-based networking and expects Indian enterprises and SMBs to lead this change. Cisco is coming up with innovations in systems, software and security with its expertise in large-scale network automation, analytics, wireless technology and mobility.

Realising the trail blazing effect of artificial intelligence (AI), machine learning (ML) and other new trends in networking technology, the company is going for an overhaul of its hardware business and giving primacy to services business. Instead of perpetual licensing, the company is now going for subscription-based license so that client acquisition and revenue enhancement is made easier.

Software supplies a third of Cisco’s global revenue, but in India, its contribution is 40%. This is further fuelled by digital journey where India will become a $6 trillion economy by 2027. Chief Information Officer for international operations and Senior Vice President of IT, V C Gopalratnam says the transformation of the company is also necessitating difference in skill sets.

“We are witnessing a scenario in which machines can perform well in areas where rule-based processes or jobs are involved. But processes that require domain expertise and specific skill sets to handle the situation, human beings can handle it better than machines. So, we are facing a scenario where rule-based jobs versus domain based jobs will play a major role,” he says.

To take on the multi-cloud scenario where people are using four to five devices and applications, Cisco launched Catalyst9K Switches and software network based automation. It adopts and captures business intent and addresses the business needs and network delivers it. Over 125 Indian customers have adopted the Catalyst 9K platform in the last 12 months. Cisco India has over 10,000 engineers, a sales organisation and a manufacturing set up. Besides investing $100 million in India’s digitisation efforts, the company is also involved in the startup ecosystem by investing $250 to $280 million in startups and VC ecosystem.

Focus on SMBs

According to Cisco India President Sameer Garde, the business of the company is growing at 14% to 15% annually over the past four years. The company is also banking on small and medium-sized businesses (SMBs) which is 50 million and account for 37.5% of GDP.

“We are witnessing that 70% of these SMBs are still operating offline. There is a chance for us to register double digit growth. Cisco bundles a bunch of features, ranging from collaboration tools to cybersecurity, and it is for $70 per user,” he said. Cisco is expected to triple its SMB customer base in India over the next three years to 90,000.

Helping educational institutes

Commenting on the skilling efforts, Gopalratnam says it is inevitable as technology is constantly changing and companies do not have any other choice. “I feel that our education system needs to change and technical education institutes should stop doing things that do not add value. Emphasis should be laid on experiential learning and internship should be made mandatory for students of all engineering colleges,” he adds.

The company’s skilling initiative is also aligned with its global vision of impacting 1 billion lives worldwide by 2025 through digital solutions. They include setting up a network of “Cisco ThingQbator” IoT makerspaces or innovation labs in five academic institutions across the country including IIITMK, IIT-BHU Varanasi, Amrita University Coimbatore, Indira Gandhi Delhi Technical University for Women and Trident Academy of Technology Bhubaneswar.

The company also launched the Centre of Excellence (CoE) for Internet of Things (IoT) at R V College of Engineering in Bengaluru to give students digital skills and train them for jobs in the digital economy.

Network transformation

Cisco’s Chief Executive Officer Chuck Robbins recently stated the need for imagining the future together with the help of network. “We are living in a hyper connected world and there is tremendous amount of chaos. There is wonder in the hyper connected world; when you think of infinite connections you will have to correlate with infinite possibilities,” he said.

He said it is very clear that networks are powering the future. “It is not just the network that we create, it is network of people that will create more power; network of hospitals, connecting communities and cities and machines. So, we have to think of network and we will have to think fundamentally and differently,” he said. Cisco is now looking to enter into new segments like manufacturing, education and will be focusing more on Digital 2.0, managed security services, while changing its business model towards Service as a network, Wi-Fi and Webex as a platform.

Cisco is clearly positioning itself as a holistic end-to-end tech vendor than just a network vendor. The company’s command over the network is solidified with its solutions offered through software and making it more intuitive. It is also focusing more on AI driven approach where security is an important service offering.
Security is extremely critical with many devices, and growing in and outside the network.

Cisco made a significant investment in cybersecurity space and recently came up with encrypted traffic analytics with the help of The Talos Security Intelligence and Research Group (Talos).

Cisco is also blocking 20 billion threats every day and denying access to various websites. It recently joined hands with Google to strengthen multi-cloud solutions, which will fulfill requirements of security, policy, and configuration.

Despite being proud of its hardware driven legacy, the company is transforming as service and software organisation to stay ahead in the race.