FixNix Blog

Cisco CEO John Chambers thinks PM Narendra Modi can “turnaround” India

Aug 15, 2014 3:18:16 AM / by Shanmugavel Sankaran posted in India, Blog, CISO, CISO CEO, Narendra modi


Amid gloom over flat forecasts and job cuts, if there is one arena that is looking up for Cisco-it is India. Networking giant Cisco announced in its quarterly results today its intention to cut down 6000 jobs as the company struggles to sustain growth.

Most of Cisco's woes are related to the dismal, mostly negative growth in some key emerging markets. Two key markets where it suffered was China, where product orders fell 23 per cent, and Brazil, which faced a decline of 13 per cent.

India, as a market, however, has bucked that trend for Cisco. India grew at a healthy 18 per cent for the company, even as the remaining emerging countries in Asia actually declined 34% (excluding China and India). Cisco's overall APJ business was down by 7 per cent.

"We saw the impact of economic and geopolitical challenges in China, Brazil, Russia, Argentina, Turkey, and Thailand and in a number of emerging markets that many of other peers are seeing. These declines are reducing our growth by several points from what was expected and typically seen. Unfortunately as we look out we don't see emerging markets growth returning for several quarters and believe it possibly could get worst," Chambers said during the earnings call.

Chambers however, displayed great enthusiasm around Cisco's prospects in India. "There are some bright spots for the first time in a while. I think Modi in India is going to turnaround that country. You can see the enthusiasm both the citizens and the businesses there are betting on a single emerging market. I would bet on India right now in a big way."

Cisco's high-end routers and switches declined 7 per cent and 4 per cent year-over-year, respectively, as customers were slow to order a new series of products. Its data center revenues rose 30 per cent, and security sector revenues rose 29 per cent. Cisco posted a smaller-than-expected 0.5 per cent dip in fiscal fourth-quarter revenue to $12.4 billion.

Chambers recently visited India and is said to have held high-level talks with the Modi government around opportunities in the country. Chambers has also been vocal about Cisco's keen interest in exploring the smart cities opportunity in India. FM Arun Jaitely announced Rs. 7060 crore for development of smart cities in his maiden budget speech in July 2014.

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