Home & Office

Cisco: We love opportunities from GDP slowdown

As its rivals may look to cut back amid the economic downturn, the U.S. networking giant sees this as an opportunity to gain market share in Asia-Pacific by raising customer mindshare and unlocking potential of partners.
Written by Ryan Huang, Contributor

BANGKOK--Networking giant Cisco Systems is looking to gain marketshare in the Asia-Pacific region and reach out to smaller businesses by unlocking the potential of its channel partners and building on its investments.

There is enormous opportunity in the Asia-Pacific growth engine and 95 percent of the company's business in the region is driven by channel partners, noted Jaime Valles, its president for Asia-Pacific, Japan and Greater China, during his keynote address at the Cisco Systems Partner Led Network conference here Wednesday.

He added the Asia-Pacific reflects the highest total addressable market growth for Cisco globally and was worth about US$36 billion this year. This number is expected to grow 7.6 percent per annum to hit US$44 billion by 2016, Valles said.

He also played down the economic uncertainty and emphasized the IT sector's growth prospects were not necessarily linked to its gross domestic product (GDP). 

"In fact, we love the reduction in GDP," he said, adding Cisco saw a downturn instead as an opportunity to gain marketshare from competitors, specifically, from those which may be cutting back on investments and reducing their focus on markets Cisco is eyeing.

Common IT priorities across region
Some of the key drivers for IT demand in the region include a focus on urbanization and sustainability, noted Stanimira Koleva, Cisco's vice president for partner business group for Asia-Pacific, Japan and Greater China.

Speaking at a media briefing, she also highlighted a few verticals undergoing "major transformation" which she saw as an opportunity for Cisco and its partners. "We see opportunities to enter the space of retail, consumer goods, manufacturing, supply chain, energy, telecommunications, healthcare and online," Koleva said.

She noted, for example, the retail sector has been trending toward using digital signage, mobile coupons, and customer-installed analytics. There also are increasing opportunities in healthcare with telemedicine especially in Australia.

Agreeing, Valles said in a separate media briefing more and more countries were coming out with IT-specific roadmaps, such as 5-year ICT plans, as they recognized its importance in boosting productivity. This has been creating a broader base and addressable market for vendors, he added.

He highlighted Indonesia as a key growth market which Cisco was eyeing, as there were a lot of small and medium companies looking to grow there and will need technology expertise, especially those in finance, such as its telepresence offerings, Valles noted.

Amid a push by countries such as South Korea for companies to adopt local products, he remained optimistic Cisco would still have an edge due to its dominance in providing an "end-to-end solution". He added an ecosystem of partners was also important, and it has been partnering local companies such as Samsung in South Korea to maximize its market reach.

Koleva said Cisco would be doubling its investment in its partner network, as part of its push to support those key in reaching out to many smaller businesses. 

When asked about the outlook for the Chinese market and the threat of local players such as Huawei, Valles said: "Our strategy for China and the rest of the region generally is to build trust with partners and customers, and continue to grow partnerships and investments, such as through education via our Cisco Networking Academy."

He added his goal was to improve the company's mindshare across the region, such that Cisco would be the top of mind recall among business leaders. When asked to reveal specific targets, he said: "I don't like putting numbers on anything because that can both limit us and make us force things if we get impatient."

Ryan Huang of ZDNet Asia reported from Cisco APJC Partner Led Network conference in Bangkok, Thailand, on the invitation of Cisco. 

Editorial standards