Bengaluru: Networking equipment maker Cisco Systems Inc. is the latest among large enterprises to announce an initiative to work with start-ups. Cisco on Thursday announced its LaunchPad initiative through which it will work with selected start-ups to develop products together.
“LaunchPad brings together Cisco’s partner ecosystem to actually create solutions for the next three billion people. We have a field team to identify the type of solutions and problems required to do this. We’re taking that to the partner community and start-ups community, and saying these are the business relevant problems—if you want, you can solve them, and if you solve them, we can take it to market together,” said Amit Phadnis, president, engineering and India site leader for Cisco.
The applications for the four-month-long program are now open for start-ups and will initially focus on manufacturing, retail, transportation, education and healthcare sectors. Cisco will not take equity in the start-ups selected for the program.
Cisco also announced a collaboration with Tech Mahindra Ltd and smaller start-ups that work in the digital metering space to develop digital solutions for the Indian electric utilities.
“This is the kind of collaboration that LaunchPad will enable more and more,” said Phadnis.
Cisco also supports start-ups through its venture arm, Cisco Investments, and through an entrepreneur-in-residence program.
Cisco has already invested in 25 start-up companies in India over the last several years using an investment pool of $240 million. In October, it made its first acquisition in India, buying Pawaa Software, a Bengaluru-based start-up which provides cloud-based and secure file-sharing services, for an undisclosed amount.
Cisco’s India entity, the company’s second-largest presence outside its headquarters in the US, has about 11,000 people, including 7,000 engineers.
The LaunchPad program is in tandem with a larger restructuring effort underfoot at Cisco.
“In the next three years, our development methodology is going to change dramatically. We’re trying to re-spin our teams into a co-development mode. The time-to-market for products that used to be there earlier, won’t work today,” said Phadnis.
More than half of Cisco’s revenue comes from the switching and routing business. Like all other hardware companies, Cisco is also going through a transition—shifting from low-margin enterprise network hardware such as switches and routers to high-margin cloud software and services. In a dramatic shift away from its core business of networking equipment, Cisco will also focus heavily on analytics and undertake a re-skilling effort to enable its engineers—a lot of whom primarily work with embedded systems—to handle managed services and develop solutions at the applications layer.