For the first time in two decades, Cisco has a new CEO this week with Chuck Robbins taking over on Monday for the retiring John Chambers. In his last public appearance as CEO, Chambers spoke to attendees at the Indian Institutes of Technology alumni PanIIT Global Leadership conference last Friday in Santa Clara, California. It was a fitting conclusion for Chambers because India quite possibly not only represents Cisco’s present, but the company’s future as well.
Cisco is the leader in India’s booming Ethernet switch and router industry, a market that recently showed 20% growth in the past year. The expanding use of mobile technology combined with the “Digital India” strategy announced by the prime minister, have made the country a key cornerstone for growth not just at Cisco but for a host of online retailers, such as Amazon and the newly-formed Flipkart as well.
“We decided to double down on India,” said Chambers in his remarks on Friday. “It is an area that we’re betting on in a big way.” Chambers added that India’s prime minister – Narendra Modi – “gets it” when it comes to the digitization of the country.
Chambers also described the company’s reshaping of its executive ranks, with nearly 30% turnover in the past 18 months. This has resulted in a number of high-profile departures, including longtime chief technology officer Padmasree Warrior. It was recently reported that Warrior may be headed to Wipro, one of India’s largest IT service providers.
Cisco’s former top executive also defended the company’s acquisition strategy, while acknowledging that he’s still known for the disastrous purchase of the Flip video camera. Flip, which Cisco acquired in 2009 for $590 million, was ultimately closed only two years later.
“It doesn’t even make the list of the 20 most expensive acquisitions,” said Chambers.
He also dropped hints that despite acquisitions and partnerships which were not hugely successful over time, Cisco was not going to back away from its aggressive approach. According to Chambers, Cisco is currently evaluating a number of potential partnerships. “These will be game changers,” said the Cisco leader. “They are alliances that will surprise you, almost blow your mind.”
If some of these new partnerships involve enterprises in India, it will not be a total surprise, as a number of other technology companies have made big bets there as well. Chambers was followed at the PanIIT conference by Amit Agarwal, vice president and country manager for Amazon India, who described how his company is seeking to build India’s largest online store over the past 24 months, after an investment of $2 billion “We want to transform how India buys and sells,” said Agarwal.
Last week, Amazon announced that their operation in India had been the fastest growing of all their business units in terms of sales. They also took the unusual step of introducing Sunday deliver for all Amazon-fulfilled products in 100 cities across the country.
Yet, India’s biggest online retailer remains the homegrown Flipkart, founded by two former Amazon employees nearly five years ago. Earlier this month, Flipkart’s Punit Soni, the company’s chief product officer, appeared in San Francisco at the MobileBeat conference and described how the country is ahead of the U.S. in adapting to mobile sales, but behind in extending credit cards to buy goods. This means that Flipkart and Amazon must maintain an extensive delivery system that collects cash on the spot from a vast majority of their India customers.
“Mobile shopping has to be reinvented as a personal shopping experience,” said Soni.
With the billions already invested in India by companies like Cisco and Amazon, it’s clear that the technology community believes their investment will pay off. One of the most widely distributed quotes by the colorful Chambers (and there are many) over his twenty year career leading Cisco was “If you agree with everything that I have said, then I have failed.” By pushing a strategy for major investment in India, Chambers and his successor certainly hope that this is one bet they got right.