Despite telecom industry going through a most difficult time, Cisco’s service provider business in India has shown tremendous growth year-on-year. In last four years, it has grown at CAGR of 38%. This has been possible because of Cisco’s strong product portfolio, the partnership with telcos and growth in streaming business in India. But this has brought huge deployment challenges because companies like Reliance Jio or Hotstar have not only disrupted the business, they are also disrupting the traditional architecture of IT deployment. The good news for Cisco is that its India wing is turning this challenge into an opportunity.
In an exclusive interaction, Sanjay Kaul, Managing Director, Service Provider Business, Cisco India & SAARC said, “The challenge posed by Indian market in terms of deployment scenario or talent of the engineers who are deploying networking equipment such as access routers in the field, give us a huge chance of innovation, as we have to bring the element of simplicity and hardening of the boxes like never before. So, lot of things that are happening for India, will ultimately serve the global market.”
What business momentum do you see for Cisco in the Service Provider Business segment?
Indian service provider business is going through a pretty interesting time. There is huge disruption caused by Reliance Jio and video streaming companies like Hotstar. As many as 8 to 10 companies are emerging in streaming business alone and they are creating an impetus for data growth.
This is a good news for Cisco because when data become the mainstream business, we are best placed to partner with these companies. We have all the key asset to sell the data business. That is the main reason, why I always say to my team and my business leaders that India is going through disruption but Cisco is accelerating. No doubt, it is a tough industry but we have navigated pretty well, thanks to our investment in right technology.
What range of growth Cisco is expecting from Service Provider Business in India?
It is tough to give the actual number but in last four year, we have grown 38% CAGR, which is amazing in an industry that is not growing at all.
What is the total business opportunity do you see for SPs in India?
It’s huge. If you add up the digitisation projects, it is about $16 billion. More than 50 million small businesses in India are looking to digitise themselves and their efforts have increased due to GST and other government policies. For a telco, they are low-hanging fruits. Telcos are the only one who has the reach and coverage to serve them. If they can create some technology in plug and play mode to enable them to go digital – that will bring huge business to them.
You have mentioned business disruption, do you also see new trends at the level of deployment of services and products?
Absolutely, a lot of new and innovative things are happening in India. Recently, we went to a customer, who needed a technology to be placed between layer-two and layer-three, connecting IP with MPLS. Within six months, we had the boxes ready and that helps them in cost savings both in CAPEX and OPEX and improve agility.
Actually, a lot of new and innovative things are happening from India’s point of view. Companies are now finding new use cases in India and replicating it globally. For example access routing deployed in Reliance Jio network is a fantastic example of India based innovation.
Routers are basically placed in the dust-free and air-condition environment but Jio has done an amazing innovation where these routers are exposed to open environment, dust and water. Interestingly, they not only survive, also if a UPS dies because of any reason, the routers capacitor has the power to send one packet telling the status to the administrator that UPS is dying. Nobody in U.S.A and Europe wants that but in India, businesses want to know when their UPS are going to die.
Similarly on the automation side, we launched a product called Cisco SON Suite. There was a lot of complaint about call dropping and it used to take time to address those issues but with SON we helped operators to manage their resources in an efficient way. The algorithm used in SON connected a base-station to surrounding base station when it runs out of capacity, leading to significant reduction in call drop cases.
Is software-defined networking (SDN) picking up in India?
In last one year, there has been a 180-degree shift. Earlier, SDN was not even on the agenda for CTOs but now all of them are doing something on SDN. In years’ time, I believe, Indian telcos will be way ahead of rest. A lot of network function like packet core is getting virtualised. My sense is that SDN will be a journey but Indian telcos are in full swing.
There have been some critical reports around Cisco R&D center in India. How it is placed now and what role it is playing in company’s transition towards software?
We have a huge R&D centre here. Our focus on R&D has improved like never before. Changes in the organisation are inevitable. Today, we are not only building for India but we are building solutions and services for the global market from India. Some of the large numbers of routers deployment that we had in India, their software and hardware development had happened locally.
The challenge posed by Indian market in terms of deployment scenario or talent of the engineers who are deploying these networking boxes in the field, give us a huge chance of innovation, as we have to bring the element of simplicity and hardening of the boxes like never before. So, a lot of things that are happening in India, will ultimately serve the global market. We have all the right reasons to believe that the challenge posed by India offers a huge opportunity for Cisco to grow globally.