By Alok Bardiya, Cisco Director
If I were to ask, what are your company’s plans to use product/platform innovations from India – I am guessing the reaction would range from “are you serious?” to something more neutral at best. But the reality is far more interesting.
Indian papers carried a recent news item – “50 promising startups give five-minute pitches to CIOs.” This was not just another set of India IT shops pitching their services, but tech product companies and the audience included CIOs and divisional business leaders from the likes of P&G, Citigroup, Kroger and other global and Indian firms. Some of these companies were already trying out products from these startups!
India is recognized as a global center when it comes to IT services. It’s based on the tried and tested “time and materials” and employee cost arbitrage model. This has been the story since the late ‘90s—when Indian companies first started working on Y2K projects!
When I moved back to India in 2008, I used to hear a lot about “jugaad” – the local term for innovation. The thought was that India will swamp the world with extremely low cost innovation across sectors. Cut to today, the story hasn’t turned out exactly that way, but things are progressing in some areas of hi-tech and healthcare.
Several elements are enabling this on the tech side. There is a ready talent pool: not just the IT services companies but almost all global tech companies have a large research and development (R&D) presence in India. Several of them are now building products in India. Cisco itself has a large presence here (next in size only to San Jose). India has been important to us as a market as well as a center for R&D, product innovation, and as a center for investments.
The Indian presence in the Bay Area has been another enabler, founding startups with a U.S.-India connection. The venture capital (VC) community in India is also strong with funding from global companies as well as home-grown funds. Cloud has been a big factor as well – both lowering the cost of infrastructure and the ability to sell globally on a SaaS model.
At Cisco Investments, we started early and launched the India Innovation investment theme to invest in innovative tech companies based in India. More VCs in India are now taking a bet on such product startups. We see interesting companies in software apps – both enterprise and consumer, information security, cloud platforms, analytics, mobility, fabless semi-conductors, and more. Healthcare is another sector that will see disruption from India. Both Indian companies and India arms of multinational corporations like GE and Philips, are building products at a fraction of the cost. How about a portable ECG machine from GE for $400 – about one-tenth of the normal price!
We have been active under our India Innovation theme – looking both at companies as well as evaluating relationships with incubators. We recently closed an investment in an IIT-Mumbai incubated company with a disruptive platform for the manufacturing floor. There are others that we are evaluating and we are open to many more! Our value is not just the investment dollars but helping startups grow through commercial and other strategic relationships.