Cisco looks to quad play for growth
Written by Writer on Friday, October 3rd, 2008
NETWORKING
Cisco looks to quad play for growth
DON SAMBANDARAKSA
Networking leader Cisco has set its sights on double digit growth in its 2009 Fiscal year through government mega projects, finance and 3G telco networks that will more than offset any lack of consumer confidence.
Speaking at the 2009 financial year kick-off, managing director of Cisco Thailand Tatchapol Poshayanonda said that network convergence was changing the game and networking was no longer just about voice and data, but about quad play: data, voice, video and mobility, and that there was much synergy in terms of products and business models.
First there is the new work model as defined by the millennials who have grown up with Web 2.0 and blogs. These people do not understand why work has to be limited by an office and prefer to work where and when they want.
This has resulted in new business models and Tatchapol used Cisco as an example, where a command and control structure had been completely revamped with collaboration at the heart of things. Cisco has eight so-called councils to make instant business decisions.
Next is “everything as a service,” going beyond software as a service. Cisco already offers pay-per-use conferencing and soon the industry will see storage on demand and computing power on demand. The new world resource model means physical resources can be anywhere in the world and on demand.
In 2008, Cisco had revenues of almost 40 billion US dollars, a growth of around 13 percent which was in line with forecasts. Cash grew by 20 percent and Tatchapol said that this meant Cisco is now in an excellent position to invest heavily in R&D and engage in mergers and acquisitions for new technology.
In Thailand, the growth was 23 percent in an ICT market that grew by only 9 percent. Each of Ciscos’ three business lines contributed roughly the same to its revenues, service providers, enterprise and public sector and commercial.
Tatchapol also said that one fifth of revenue came from what he termed high value, intelligent and special features.
Key projects in 2008 included the roll out of a next generation network with CAT Telecom, the Cisco Net academy that has graduated over 15,000 students over ten years, the first WiFi 802.11n roll out at the Oriental Hotel and the first WiMax roll-out at Mae Fah Luang University that links not just the campus, but the local community to the network.
However, he warned that the local labour market still lacked over 8,000 networking professionals a year and this gap was set to grow with the advent of 3G and more advanced services.
For 2009, Tatchapol said that the government’s policy to invest 65 percent of budget to the provinces will mean that the upcountry market will see this trickling down into IT budgets and procurements, even though consumer confidence may remain low.
A lower baht at 35 to the US dollar will help boost exports especially in the automotive sector with Ford, Honda and Toyota continuing to invest in Thailand.
Low broadband penetration (at 3 to 5 percent) means there is tremendous opportunity for growth.
The areas Tatchapol sees that will deliver high growth here are around the government mega projects, banking and telcos, that will see a huge boom once 3G networks are launched in Thailand.
The Cisco country manger also predicted that growth would exceed 10 percent this year and set his team a target of becoming number one in unified communications from its current No. 2 place.
Asked about green IT, Tatchapol said that internally, Cisco Thailand has already adopted a work from home system which saved employees an average of 2.45 hours a week commuting, time that could be used to improve quality of life. By having only half as many desks as people, the office also saves on cooling and space.
On the other end in the data centre, virtualisation technology, which Cisco’s data centre infrastructure helps to enable, can cut energy bills by up to half.
Asked if these predictions took into account Brocade’s launch of new data centre equipment or its recent acquisition of Foundry Networks, Tatchapol said that while Brocade was trying to compete with data centre Ethernet, it had only point solutions rather than Cisco’s holistic approach, while he said that Foundry had a small market share.
