Cisco unveils emerging market focus

Cisco Systems has revealed a strategy for its emerging markets, saying it sees opportunities to be part of the economic and technological transition of developing countries.

Delivering the keynote address at the start of Cisco`s Networkers 2006 conference at Sun City yesterday, Cisco emerging markets president Paul Mountford outlined the importance of developing markets to the company.

These markets, comprising 129 countries, hold 79% of the world`s oil reserves, 87% of the world`s gas, 75% of copper, 77% of gold and 88% of platinum, he said. Furthermore, Mountford noted, these developing markets attract about $87 million in foreign direct investment and have shown a 5% to 9% GDP growth during the last three years.

"We are currently in an energy boom, driven for the first time by demand and not supply," he said, adding that Cisco is developing an emerging market focus.

SA, which is one of the fastest-growing emerging markets, holds great potential, and government`s goal to accelerate the country`s economic growth to 6% by 2010, from a current 4.5%, is achievable, Mountford commented.

Emerging market transition is driven by technology, he said, and Cisco is eager to be part of this transition, by driving ICT and access to technology.

In SA, Cisco aims to accelerate broadband to the worldwide norm, where broadband penetration is less than 5%.

Cisco has also specifically identified mining and the financial services sector as potential growth areas that would benefit from technology, Mountford noted.

"Mining currently forms 7% of SA`s GDP and this will grow, driven by demand from India, China and Russia. A boost for this sector will be major shot in the arm for the country," he stated.

Through radio frequency identification (RFID), Cisco has identified major opportunities within the mining sector, Mountford said, adding that RFID technology is also a potentially large-scale revenue spinner for the company worldwide. He speculated that the global RFID space could be worth as much as $5 billion to the company.

"Now we can put RFID [technology] down a mineshaft and create intelligent mineshafts. Wireless technology has a big role to play within mining, and leaders in this industry are not concerned with budgets," he said.

The financial services sector, Mountford noted, contributes 20% to SA`s GDP, and Cisco has identified big opportunities in providing access to banking to 14 million "unbanked" people in the country and in improving customer satisfaction and loyalty.

Through Cisco`s Intelligent Information Network (IIN) technology, he said, the network becomes the platform, allowing applications to be placed on the network. Mountford added that IIN technology would allow financial institutions to provide quicker customer authentication and more efficient service, as well as to achieve cost savings.

Cisco is also planning to establish a centre for innovation in Pretoria, which will be completed in 2008. Mountford said an initial investment of $15 million has been secured for the project, which is also expected to provide numerous spin-offs.

One of the major focus areas of the innovation centre, he said, would be to boost the small and medium enterprise sector by driving entrepreneurial skills.

In addition, Cisco aims to focus on the healthcare and education sectors in SA, currently driving Nepad`s e-school initiative that aims to equip all African schools with infrastructure, ICT equipment and training content.