Business Standard: October 13, 2016
Pune/Mumbai: Chuck Robbins, chief executive officer (CEO) of Cisco Systems, is transitioning the $49-billion company from hardware-centric to software and solutions-driven. Since he took over the top job last July, he has taken some bold decisions, which included acquisition of some 15 companies. He talks to Shivani Shinde Nadhe and Niraj Bhatt about the transition of the company, India’s role in Cisco’s growth and the manufacturing plant that was announced on Wednesday, aligning with Prime Minister Narendra Modi’s digital road map, among other things. Edited excerpts:
How has the journey of Cisco been in transitioning itself into a software-driven firm?
Given the explosive growth in the digital space, you can look at it either as an opportunity or a threat. If you want to look at it as an opportunity, then it requires you to move faster and think much ahead of time. We are no different from many of our customers who are also undergoing such a change.
We have always sold integrated systems, but 80 per cent of our engineers and products are in the software area. We are much more of a software company than people believe or understand. What we need to do now is just evolve how we present our technology to customers, so that they see value and understand it. The need for hardware is not going away. The internet is dependent on high performance hardware. We are using a combination of both software and hardware to solve problems.
We had to innovate at each level and our vast research & development (R&D) capability helped us do it. We have always been a company that knows how to acquire and integrate. We have had a tremendous partner ecosystem around the world, which we are building out further into deeper relationships that we didn’t have in the past like we have now with Apple, Salesforce and Rockwell Automation. You will see more of these in the future. You will see more of these in the future.
The other focus area has been co-development with customers where we are doing iterative product designs. We have done some of this in India too.
Are you looking to invest in Indian start-ups?
We have invested over $2 billion in start-ups across the globe through our venture capital arm. In India, our investment has been $280 million. We have created a $100-million fund for innovation in country digitisation for India, and we can invest further.
How do you see CEOs tackling the digital disruption? What suggestions would you give them?
I entered the information technology (IT) space in the mid-1980s as a Cobol programmer. I’m amazed at the progress of technology since then.
Today’s CEOs will need some working knowledge of technology. It is amazing to see how much technology, my peers in industries such as retail, media and banking understand. What you may have to deal with today is that you cannot be married to major successes of the past. You have to make decisions that best positions your company five years from now. These decisions are not easy.
CEOs also realise that the IT organisation and operational teams need to work together. Successful companies are working on such integration. There is a general belief that by the end of 2017 three-quarters of all companies in the world will have a strategy that will have digital associated with it and by 2019, about 40 per cent of revenue will come from digital initiatives.
How is Cisco working with PM Modi’s Digital India road map and what opportunities do you see there?
India has a leader who understands the technology need of the country. We have been in India for 21 years and we have made three big commitments over these years. The first was when we decided to make India our second global headquarters, and it has been one of the best decisions we have taken with the talent pool and the engineering expertise available.
The second commitment was to align with Prime Minister Modi’s digital road map and India is a part of our Country Digitisation Accelarator programme. We are deeply engaged with six countries around the world at the head-of-states level where we have digital transformation plans in support of the vision of the leader. These include France, Germany, UK, Israel, India and Mexico.
The third commitment is the setting up of a manufacturing hub in India, which we announced on Wednesday. At present the manufacturing hub is for the Indian market but over time we would like to see it as a hub for other countries as well.
How significant is India for Cisco’s transition?
India is an incredible country for us as it represents 360 degree value. It’s a great business opportunity, a great place to attract employees and now a part of the supply chain as well. It was the ‘country of the year’ for Cisco last financial year. India can be the country of the year in every year for the coming decade. When you have leadership and business community, which believe that technology is key, it just creates tremendous opportunities for us. Every time I come here I tell my teams how much more we can do in India.
What do you think of Reliance’s Jio plan?
We have a tremendous partnership with them. It has been a fascinating project. The capabilities they are unleashing in this country will only accelerate the digital transformation the country is undergoing.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.