PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Computing/Networking/Internet
provide finance, loan subsidies, mentorship, and training for qualified entrepreneurs and small
businesses across India that are run by current or former Cisco Networking Academy students.
In 2005, Cisco committed $1.1 billion in new India investment over three years. Part of that investment
funded the new $50 million, 14-acre Cisco Globalization Center East campus in
Bangalore, integrating R&D, IT, sales, and customer support. The center, completed in 2007,
will help recruit new talent and maintain Cisco’s current low attrition rate.
Cisco has also made $100 million in early stage venture investments, in companies such as mobile
game developer Indiagames, media/advertising/sports rights firm Nimbus Communications,
and telecom software company Bharti Telesoft. India customers range from the Taj Group of
Hotels and retailer Future Group, to Indian Oil Corp and ICICI Bank, to the National Highway
Authority and Parliament’s Lok Sabha Library, to the Reliance and Bharti Groups.
Economies of Scale
Cisco vice president for globalization Chris White says that with 4,000 Indian employees currently,
the company’s investment in India is on track, and the India workforce should reach
10,000 by 2013. Cisco has a publicly stated goal for the top 20% of its executive leadership to
reside in India over time. Why? “Developing country GDPs are now clipping along very nicely,
rather than spiking,” White says. “India has a bad year when growth drops from 9.8% to 8.9%. Is
there a concept here to support our next $30 billion of business?” India’s geographical location—at
the center of a five-hour time zone that includes the Gulf States, Africa, and Asia—is
also part of the advantage.
White insists that for Cisco, India is “a scale play on engineering, not manufacturing. We use
India as a platform to fuel growth, not just to take advantage of cost arbitration or even tap talent.”
As an example, he cites retailer Future Group, which operates the Pantaloon Retail, Big
Bazaar and Food Bazaar chains across India. Cisco is developing a radio frequency identification
(RFID)–based flat network architecture to be tested at Big Bazaar’s three Bangalore outlets. The
chain has a total of 92 stores across India; many have grocery sections, including fresh produce,
and the metro stores feature gaming and children's’ play areas.
Eventually, the technology will be extended to all Future Group retail formats, attaching RFID
tags to 1 million stockkeeping units (SKUs)—individual items or cartons—of $10 or more in
value. RFID tags contain detailed data on the tagged item and the shipment in which it is included.
The tags are used for real-time tracking that provides full visibility into the retailer’s supply
chain, allowing stores to manage inventory, monitor customer purchases, and improve efficiency
in scheduling and routing shipments. This comes in especially handy for perishable goods
such as produce, which are often lost or delayed in India, leading to high spoilage rates.
More importantly, however, Future Group estimates that it currently scans 3 million retail items
six times daily as they move from field or factory to store shelf—18 million scans per day. By
2010–11, planned store growth will require 30 million scans daily, more than will be manually
possible by people; processes will have to be automated. All large store chains face the same
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