Page 29 - IACC Newsletter March-April 2014 Issue 03

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US investments in India
Cisco to invest $1.7 billion in India this year; to partner Centre’s digital drive
Nearly three months after Cisco Chairman & CEO John Chambers said he will "bet big on India", the world's biggest
computer networking company detailed plans to invest around $1.7 billion in a year, becoming the first multinational to
make such a commitment in the country since the Narendra Modi government took over. After a spate of exits of top
officials and concerns over business growth in the country, Cisco is back on its feet with billions of dollars up its sleeves as
it looks to partner India on the government's digital initiative.
"Cisco is investing $1.7 billion this year into the Indiaoperations," Cisco's Indiapresident Dinesh Malkani told media. "The
investment includes a $40-million innovation fund and investments into R&D." "I think Modi in India is going to turn
around that country," Chambers had said during an earnings call in August. "You can see the enthusiasmboth citizens and
businesses there are betting on a single emerging market. I would bet on India right now in a big way." Cisco India lost at
least four key people in the past year, including Indiahead JeffWhite. In the quarter endedOctober 26, 2013, Cisco's India
revenue declined 18%. With the new Modi government in place, Cisco is placing a fresh bet on India.
With a fresh annual investment of $1.7 billion in India, Cisco is preparing to bid for large government contracts for smart
cities and other Digital India projects. Chambers sees huge opportunity in India. During a speech in August, he said he
wants Cisco India's contribution to the parent company rise from less than 2% now to at least 5%. As the US network
equipment-maker faces constant dip in its Chinabusiness, Cisco sees India as a big opportunity for growth. In the quarter
ended July 26, Cisco India's revenue grew 18% whi le China revenue declined 26%. The slide in China revenue continued
even during the subsequent quarterwhen the company saw a dip of 33% in China business. India was still growing at 6%.
"Cisco has been a market leader in a lot of areas. India market is important for them from a smart city perspective. They
are doing a lot of work in that area. Even in the data centre space they are doing very well. With smart city being a big
thing in India, Ciscowill double down in the long term," said Karthik Ananth, di rector at marketing research firm Zinnov.
Cisco is now approaching the new government opportunity by carving out a new division called the Growth Vertical,
which will focus on areas such as eHealthcare, eEducation, smart cities and national broadband pro ject.
The growing Internet penetration and exponential growth of Internetbased companies, such as Flipkart, Ola, Zomato in
the country, is creating newer opportunities for Cisco. "Every time a new user gets added to the network, he's an
opportunity for education, for banking, for ecommerce. We've beenworkingwith businesses to provide the network. We
also want to partner with the government for the national broadband project, to make sure the network is available to
every village in the country," Malkani said.
"We've got some of our best people to be a part of this new division as it requires a lot of work," Malkani said. "For such
projects, the products need to be more rugged and localised. The team is working onmaking sure we get every bit of that
right." Some of the key people who are apart of the division include Purushottam Kaushik, who'll be heading the growth
vertical and has previously beenworking on projects in telecom, Indiadigitisation, Internet of Everything, physical safety,
energy, manufacturing and transportation. Vishal Saxena, who has been in the company for last eight years, working on
service provider and defence business, is now heading India digitisation and smart cities part of the growth vertical.
Rupinder Singh, who has been technical leader for the public sector, enterprise and service provider business, will be
playing the engineering director for India digitisation, Internet of Everything, physical safety and surveillance.
Cisco, which employs 11,300 people in India, hasmoved about 15-20% of its Indiaworkforce to the newlyformed division.
Cisco has already won some large government projects in these areas. The company is consulting the government on
building four out of the five smart cities in the Delhi Mumbai Industrial Corridor. "We built the entire blueprint for four of
the five cities on DMIC.