Cisco Systems Makes Major Strategic Investments in India

October 19, 2005

Cisco Systems today announced enormous strategic developments in India - including a US$1.1 billion investment in the country over the next three years and an agreement with the Indian government to support its National E-Governance Plan.

Dan Scheinman, senior vice president of Corporate Development, is the strategist tasked with advancing market opportunities to drive innovation and growth for Cisco. News@Cisco asked him to comment on these announcements and their importance for both Cisco and India.

Why is Cisco making such a large investment in India?

Dan Scheinman: Over the past 10 years, we've seen an enormous evolution of the Indian market. The government has rolled back the state-controlled economy and created a competitive environment, and because of that - combined with the incredible talent that exists in India - we see opportunities not only to be part of this great awakening in India but also to make our business even more globally competitive going forward.

This is an exciting day for Cisco - and Cisco in India. There was a time not long ago when people thought of India as a country with potential - but now it's clear that India is realizing that potential with activities and programs that will benefit Indians for years to come. We're proud to be part of that.

India is already a global success story for Cisco. Can you briefly describe some of the company's involvement in recent years?

Dan Scheinman: I think it's fair to say that companies come to India for the cost, they stay for the quality and they invest for the innovation. That's certainly true for Cisco.

When we came, it was initially for cost savings. And we've built a quality local team, led by Rangu Salgame (president of Cisco India), who has created a strong relationship with the Indian government. As a result, we are very privileged to work across the entire spectrum of government as it begins to use technology to meet its goals.

Our Indian facilities have become a great source of high-quality engineering for us. We've made engineering investments - directly as well as indirectly, with leading Indian companies - that have helped Cisco tap into the country's world-class intellectual capital. Today, India plays an active role across our entire product line - including IOS software, routers and switches, security, optical, wireless and much more.

So with this next step, we believe our investment will help us develop many more engineers who'll be an important part of our continued innovation in the future.

As a market, India was smaller than many U.S. enterprises a number of years ago. But today, the nation has made incredible investments in building world-class communications networks. As an indication of that, in the fourth quarter of our 2005 fiscal year, Cisco saw a 75 percent year-over-year bookings growth in India.

One of your recent announcements is of an agreement with the Indian government to support its National E-Governance Plan, which will provide e-connectivity at the village, district and state levels in India. Why is Cisco investing in this effort to reach out to India's rural populations?

Dan Scheinman: One thing that is clear about the phenomenal growth India is experiencing is that it's touching a relatively small part of the population that is more urban-based. But the overwhelming percentage of the Indian population is rural, and there rightly are concerns about helping to ensure that they, too, reap the benefits technology has to offer. The government of India realizes this, as does Cisco.

We want to show that, just as the Internet revolution is important to cities, it can have (and is having already, in some places) the same effect in rural settings. If the E-Governance Plan is successful, we hope it will be scalable and that it will create a model for use elsewhere - in India and around the world.

Why is it important to develop e-governance?

Dan Scheinman: For governments - particularly in a vast country like India, which has such a large population - one way to serve your citizens is to use the Internet to provide services that can help people as they go about their business. The Internet helps governments be more efficient and more effective for their constituents.

We believe that the Internet can fundamentally change peoples' lives - giving them access to national, regional and global markets; creating more jobs; and helping a country be more competitive. So, in supporting the E-Governance Plan, we're essentially investing our money in support of that belief.

What are your thoughts on the future prospects for networking in India?

Dan Scheinman: India has the potential to be one of the most connected nations in the world. India and its people - with their enormous talent pool, entrepreneurship and desire to be connected - represent a huge market opportunity. As the communications revolution continues in India, it presents an opportunity to change the way people work, live, play and learn.