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Cisco lining up acquisition targets for expansion in India
CISCO, the $33.5 billion technology giant, is bullish on making acquisitions in India as it goes about expanding its array of solutions and products. “There is a very strong possibility that we might acquire companies in India in the area of emerging technologies,” said, CPO & Senior VP of Cisco Dennis Powell. He was on his first visit to India last week.
Cisco has a good track record of acquiring companies. The company has acquired 121 companies in its two decade-long history. Mr Powell claims that 75% of these buyouts were successful. Some of its acquisitions had operations in India, but it has never acquired a company in India till now.
Mr Powell said it would be looking at companies, which are in the early stages of technology lifecycle.
Cisco now has an array of products going beyond its traditional market of switches and routers. It has moved into new product areas where solutions are built around the Internet protocol network focused on voice, video, data and mobility. Some of its recent acquisitions include companies like Scientific Atlanta and WebEx. Cisco has committed over $100 million as venture capital investment for India. It has so far invested in four Indian companies including India games and Bharti Telesoft.
An acquisition here fits into Cisco’s strategy of making India its next global hub. In December last year it set up its second globalization centre in Bangalore. Wim Elfrink, chief globalization officer, Cisco who is based in Bangalore, said its operations in India are based on three pillars - innovation, talent and growth. He said Cisco is looking at developing products from India, which will be introduced first in the developing countries and then be exported to developed nations. He termed this as a process of “reverse innovation".
Cisco has already started to move around 20 % of its top-level staff to India as it looks for new emerging markets for growth. Mr Powell said it has experienced over 30% growth in the Indian market for the last 6-7 quarters.
Cisco has committed an investment of over a billion dollars in India spread over the next 3-4 years. This includes a new R&D centre being built at a cost of $750 million. Mr Powell said it is looking at building a critical mass in India and was not here for labour arbitrage. Cisco employs over 2,200 people in India in R&D, sales and business support functions. Besides this, it has also has joint development centres with Wipro, Infosys, HCL, Satyam and Zensar Technologies.
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