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The Network As A Utility

Naresh Wadhwa, President and Country Manager, Cisco India and Saarc, predicts that the network will emerge as one of the primary utilities in the coming years, just like electricity

As we start a new year and a new decade, the industry is abuzz with talk about economic recovery, green shoots and positive market sentiments. It is also time to look back and reflect on the year that went by and gear up to face the future which looks challenging yet promising.
Year 2009 was indeed a tough year, with the global economy being battered by one of the worst meltdowns since the Great Depression of the 1930s. The scale and impact of the economic downturn, which surfaced in 2008 due to the housing and credit bubble burst, left millions unemployed across the world. Consumption and spending hit an all-time low, and most industries tried consolidation and cost cutting in an attempt to stay afloat.

Although the effects of the slowdown were felt across all countries in 2009, the Indian economy was one of the better performers, resilient but cautious in its outlook.
As we approached the end of 2009, financial markets globally began showing signs of recovery. Government initiatives in India in 2009, along with market efforts, helped to catalyze investments. Industry growth focused on economic recovery and streamlining. The government also made significant investments in SWAN and e-governance initiatives.

Technology trends
The macro-economic situation of 2009 was reflected in the performance of the IT and networking industries as well. Customers, both enterprises and SMBs, cut down on IT spends to improve their bottomlines. Still, over the course of the year, the need for business efficiencies won over short-term cost-cutting, and organizations saw prudence in embracing technology to bring down costs and increase business productivity in the long run. As a result, IT investments gradually picked up in both the enterprise and commercial markets toward the end of 2009.

Virtualization, unified communications, business intelligence, data warehousing, software-as-a-service and open source adoption were important technology trends. Year 2009 reinforced the concept of bringing IT-as-a-service to life with an industry transition from the existing datacenters to next-generation datacenters and the journey to private clouds. As a result, virtualization and datacenter
consolidation dominated the IT agendas of organizations. We also saw an increased demand for collaboration and video solutions (such as TelePresence) in the enterprise space.

Looking ahead
In November 2009, a survey by RBI pegged India’s GDP growth at 6 percent for 2009-10. While sustained recovery and eventual job creation may still be debatable issues, the business outlook for 2010 will remain optimistic across sectors, including the IT industry. IDC India, in an April 2009 report, said that it expected IT spending to revive after the second quarter of 2010.

From the networking perspective, 14 billion devices will be connected to the Internet by 2010, and the network will emerge as the primary utility in the coming years, just like electricity. According to Gartner, cloud computing, datacenter technologies, security and mobile applications will be among the top 10 strategic technologies for 2010. Companies that transform themselves to adopt collaborative cultures enabled by next-gen technologies (such as unified communications, business video, Web 2.0 and virtualization) are likely to gain sustainable competitive advantage.

For a while now there has been consensus that the Indian domestic market presents huge opportunities for the networking sector. For instance, the scope for improving Internet and broadband penetration in India is not only a business opportunity but also a chance to play a pivotal role in fostering inclusive growth in the country. Today, medical facilities are being delivered over the Internet, and students in remote parts of the country are able to access education through the distance learning models being enabled by Internet technologies.

Takeaways for 2010

IT spending will revive after the second quarter of 2010 IT investments in the areas of e-governance, virtual healthcare, distance learning, rural banking, and public security will accelerate About 14 billion devices will be connected to the Internet by 2010 Cloud computing and mobile applications will be among the top 10 strategic technologies Companies which adopt collaborative cultures are likely to gain competitive advantage There’s potential in solutions which use the IP network as a platform to manage physical security applications

IT investments in the areas of e-governance, virtual healthcare, distance learning, connected branch services, rural banking, managed data services, hosted unified communications, and public safety and security are likely to accelerate. We also see potential in solutions which use the IP network as a platform to manage physical security applications such as video surveillance and physical access control.

Enabling the channel
In 2009, Cisco focused on prioritizing resources around the needs of partners to help drive growth, engagement and loyalty, orchestrating partner marketing campaigns, enablement around go-to-market strategies, and business simplification and optimization, Year 2010 will be a significant year for us from a channel perspective because we will continue to invest in and focus on nurturing and growing our relationship with our partner community and ensuring partner profitability. We plan to evolve our partner programs and incentives to increase Cisco’s relevance for all partner types —resale, technology and service-led—and expand our offerings to meet the needs of partners and customers.

We will continue to offer the six-month channel financing stimulus program to provide the working capital partners need to grow their businesses. We will also increase the reach and benefits of our next-generation managed services channel program to reward and enable our partners’ managed services practices. Year 2010 will see the evolution of our value incentive program to motivate our channel partners to invest in architectural capabilities around collaboration, virtualization and borderless networks. Cisco’s Services offering and Cisco Capital (our leasing arm which provides easy and affordable financing options to customers) will play a key role in our channel roadmap for India.