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Cisco invests heavily in mass scale networking, distributed data centre, immersive experiences and security

With enterprises undergoing digitalisation and getting prepared for future-ready network platforms, networking major Cisco believes that India needs fiberisation for congestion-free transport networks. A healthy service provider industry is the bedrock of the whole digital vision. Sanjay Kaul, President, Asia Pacific & Japan, Service Provider Business, Cisco Systems Inc shares how the company is reinventing service providers for tapping new business opportunities

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Sanjay Kaul, President, Asia Pacific & Japan, Service Provider Business, Cisco Systems Inc

The story of the Indian telecom industry is under consolidation. How do you view this consolidation from the lens of a major telecom network provider?
Right now we have a problem in the service provider industry because it is under stress. But I think we are at the end of this misery. Consolidation has happened, now it is four players. That is the right structure for the industry. Four partners and over 1.3 billion people, they all can be healthy and can make good business. The last decade was the lost decade. When we enter 2020, we are entering a digital era where there will be new normal, there will be new entrants and participants. But there will be new revenue opportunities and new business models.

The new opportunities are that when you move into 4.5G or Wi-Fi 6 and5G, features like low latency and slicing, give you ability as an operator to use your network that I was talking about as a platform, so you can extend it to an enterprise vertical. Let us say that the enterprise vertical is a factory making cars. So if a car manufacturer’s cost of production today is 100 rupees, I believe by bringing this platform to them and automating the entire factory, we can reduce that cost by at least 40 per cent.

With the high rate of digitisation in enterprises, how does Cisco look at the digital wave unfolding and the challenges ahead?
I think we thrive with big customers. However, the thing that still needs to be developed is fiberisation, because as consumers our consumption has increased multi-fold in recent years. Today, I think the consumption is at least 20 GB. The average consumption in India is approximately 14 GB, and right now, we are still using standard video and HD video. I was in Japan recently on a tech forum there. They were displaying an 18K video. So, a one-minute clip that you watch on standard video, if the same was 18K, the data consumption would be 120 times more, which means that if you consume1 GB to watch a movie, then you need 128 GB to watch the same movie.

Hence, making sure that we have networks that are end-to-end secure, that security is on the terminal, how do we turn the business into cloud services. India has 60 million micro-businesses, micro SMEs. These are companies ranging from two-three employees to 100 employees. There are 60 million of them, and they all want to get digitised. And if you offer them monolithic services, they will never take them. So, you have got to give them a plug and play kind of offering. I need offering, which is coming to me in a box, I plug it in, itself-configures, and I’m in business. For that, these three broader things need to be sorted for India to thrive in this digital era. SPs are the foundation for digitisation, and we need a healthy service provider industry because they become the bedrock of the whole digital vision.

Having said that, we need fiberisation; we need congestion-free transport networks. That is a challenge for India because we are still only 35-40 per cent fiberised. A lot has happened in the last couple of years. Jio is playing fibre now, Bharti and Vodafone to an extent. There are some new players emerging in the market, but there is still a long way to go. Hence, I believe more than 5G, I think getting the transport networks right is a priority for India.

How is Cisco helping service providers to reduce the business complexities and challenges that you have mentioned above?
Cisco’s enterprise portfolio includes intuitive networking, collaboration, mobility, cloud and end-to-end security. We are basically doing security pre-attack, during attack and after attack. There is an organisation called TALOS, the world’s biggest threat agency, owned by Cisco, which monitors every bit that flows on the internet. We have a 60 per cent market share in routers, so it hits our routers somewhere. We are capturing more than a million threats a day. Fundamentally, Cisco takes care of this end-to-end.

With data becoming the main business and video becoming the main business, and all of it is happening at the edge of the network, we need to solve for this end-to-end. From an Indian perspective, operators have started that journey, but they are not there yet. The issue is we talk about 5G, it is a buzz word now, but 5G takes care of the low latency, but if the data has to travel through this long journey, then zero or low latency has no meaning. You have to first fix the back-end before you fix the front-end. The second thing is, it is very expensive, the spectrum is costly, so there is no point bringing this data back to the central repository. Use it, extract value out of it and get rid of it where it gets created. If you look at the bigger web players, they have really used AI, ML and deep analytics to build their businesses.

How do you really look at 5G? Earlier, there was thrust on 5G and now it is a trillion dollar opportunity. How do you really see the trend going?
5G is a piece of technology. It has become a very good reason to fix what we needed to fix for years. It is not only for India but for the rest of the countries as well. Our network got built-in multiple years. You need to make it simple and flat. The network needs to have automation embedded in it so that it becomes self-healing. We have been working with Jio for almost three years. They have elements of their network which are automated. We are also working with Bharti. They have started the journey, but it takes a while. Our belief is, in the 5G world, 70-75 per cent of the revenue will come from enterprises

By bringing in this capability to enterprises, you will save costs for them, and part of that value creation will be shared by the operator. Hence, the monetisation, because we as consumers who would love speeds, feeds, will be able to do 4Ks and 8Ks. The more data we are consuming on a daily basis, we love it, but we still will not have to pay too much more. But enterprise is a different story because the enterprise is a huge cost connected to ICT. If you help them reduce that to the tune of 30-40 per cent, you are talking about a substantial proportion of their opex. If they are willing to share 20-30 per cent with you (operators), and that is a big sum. We have two calculators – one is called VNI, Visual Networking Index, a report we publish every year. Another one is called Monetisation Index. Our analysis tells us that by 2030, digitisation could mean about 20 per cent of India’s GDP. That is a trillion-dollar opportunity, should we execute on it.

How are you leveraging the digital transformation at enterprises?
Globally, we have almost 60 per cent of the market share. We are dominant and we are anyway helping enterprises. Now bringing solution providers in the mix is making them further efficient. Enterprises that can afford it, can do it. But what if there is a service provider platform that can solve for all these needs? See how efficient we can make that.

SPs will be one of the important channels for Cisco in this decade because service providers have reach and coverage. If we give them cloud services, we can digitise India. But a foundational platform, which includes a robust network, with fiberisation and free congestion, is needed to do that will be able to help telcos monetise their services as the company manages almost 70 per cent of the internal network of most enterprises.

What are the key areas where Cisco is investing ?
Today, if you look at Cisco, we are a great technology company, but we are more than a technology company. We work on making the society a better place, we put a lot of investment in CDA – Country Digitization Acceleration program. It’s about who bells the cat – who will put up the first proof of concept. From a technology perspective, there are a few areas where we are investing – the first is making this mass scale networking happen, where you can easily get to the scale of terabytes, and you can handle this high bandwidth networks. Mass scale networking is first. The second is, we are creating a distributed data centre, which allows you to capture data when it gets produced at the edge. We are building immersive experiences through our collaboration tools, and video endpoints. The fourth area is security. When I say security, it is end-to-end security. It is the network, the data centre, the terminal and so on. The fifth area is mobility, which includes 5G, Wi-Fi 6, packet core networks. And the last one is automation and SDN, converged SDN. Automate whatever you can automate in the hierarchy of the networks.

If you have an interesting article / experience / case study to share, please get in touch with us at [email protected]


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