Production Cisco Systems in Russia

The main article about business of Cisco in Russia: Cisco Systems Russia

2017: Cisco doubled a share of products of the Russian production in local sales

In 2017 financial year which comes to the end for Cisco in July, 2017 the company in the Russian market significantly increased a share of sales of locally made products. About 20% of volume of all sold products were the share of it. About it at the end of June, 2017 TAdviser was told by Andrey Kuzmich, the technical director of Cisco in Russia and the CIS. According to him, in 2016 financial year the similar indicator was about 8%.

The main part of the sold goods with a label of "made in Russia" is made by the Cisco switches Catalyst and access points, Kuzmich says. Also the company manufactures routers and IP phones in Russia, but they make a small share of locally made products.

From the economic point of view locally made products lose made abroad. In Russia global versions of the products Cisco which are on sale at the world prices are released, and cost value of their production here at the same time is higher, Kuzmich says. The world market is serviced by one production site, and at the expense of large volumes of products which are turned out on it its cost value leaves lower. As far as below, than in Russia, he preferred not to specify.

At the same time, benefit relationship with local customers from local production, note in the company. First, many of them are interested in products manufactured in Russia.

Cisco twice increased a share of the equipment made locally on the Russian sales

Very many customers look much more loyally at the equipment on which "made in Russia" is written, - Andrey Kuzmich in a conversation with TAdviser noted.

He added that the speech, first of all, goes about the organizations which are owned in a varying degree by the state.

At the end of 2016 top management of Cisco announced falling of the Russian sales in dollars for 31%. The company then noted that Russia with its economy decreasing against the background of sanctions represents very complex market for Cisco and that existence of local production helps to smooth a situation somewhat: thanks to it Cisco "perceive as the local player more" (in more detail about it is in article Cisco Systems Russia).

Secondly, local production allows to accelerate terms of shipment and the goods delivery to the client due to lack of need to resolve the multiple customs and export issues arising in case of commodity importation from abroad speak in the Russian representative office of Cisco.

Earlier foreign top management of Cisco said that sanctions of the USA against Russia were "this call" for the company. With their introduction on each separate product, on each separate box, shipped to Russia, it became necessary to receive the signed paper at first.

In particular, it is necessary to provide the signed document proving that this product has no dual purpose for application in the military purposes. This administrative task in global Cisco was called very burdensome.

According to Cisco, more than 50 articles of products from which about 15 are the share of two lines of switches are manufactured in Russia in 2017. Andrey Kuzmich told TAdviser that in 2018 financial year the company wants to expand the number of articles of the goods produced locally.

At the same time, he noted, Cisco estimates local production first of all in terms of commercial expediency, and hoped that in 2018 it at least will not decrease.

2015: Freezing of the joint project with Federal State Unitary Enterprise EZAN of production of IP phones

On December 1, 2015 it became known of that, Cisco stopped development of the Russian IP telephony. It can be connected as with a difficult economic situation, and the growing demand for the equipment of competitors, including Chinese.

As Kommersant with reference to a source in IT market reported, Cisco froze the joint project with the Experimental plant of scientific instrument making of the Russian Academy of Sciences (Federal State Unitary Enterprise EZAN) on development and release of IP phones, complexes of technical means of protection and solutions for security of workers of the mining industry. These products, it agrees to the agreement signed in August, 2014, had to be created under a local brand, and the intellectual rights to them were going to be assigned from Cisco to Federal State Unitary Enterprise EZAN. Read more here.

2014: Start of production of IP phones in Russia

In April, 2014 Cisco announced start in Russia productions of multifunction IP phone numbers of Cisco Unified IP phone 7942 and Cisco Unified IP phone 9971.

The first model represents multifunction IP phone with the built-in microphone and functionality supporting broadband audio. The device is developed taking into account needs of the employees who are actively using telephone communication. In turn, IP phone number of Cisco 9971 − the multifunction and multimedia user device providing high-quality voice transmission and video and also work with different applications.

IP phone numbers of Cisco Unified IP phone 7942 and Cisco Unified IP phone 9971

The solution to start production of IP phones in Russia in Cisco is explained with high demand on these products from domestic partners and customers of the company. Local production will allow to reduce significantly delivery time of the equipment, speak in Cisco.

IP phone numbers 7942 and 9971 are made on production capacities of one of global contractors of Cisco company, and it will be possible to purchase these devices at any authorized partner of the company.

Cisco notes that IP phones became the fifth product line manufactured by it in Russia. Earlier the company arranged local production of the unified wireless access points, routers Cisco 2911R c integration of services (ISR) and five different sets based on routers of this series, equipment rooms VPN- modules and also the digital set-top boxes capable to deliver video content and new television services in networks IPTV.

In December, 2014 the company specified that in the country 4 independent production lines of Cisco function: for assembly of ISR 2911 routers, wireless access points, IP phones, a network module of UCS 120.

2013

Production in Tver on Dzheybel Rossiya

On May 14, 2013 in Cisco Systems announced expansion of the nomenclature of products which release is performed in Russia. In Tver the Dzheybel Russia company organizes production of access points of Cisco Aironet 2600 intended for wireless local area networks. The American company Jabil Circuit — the global contractor of Cisco.

Aironet 2600 are access points of the second generation of Cisco. They conform to requirements of the wireless standards IEEE 802.11a/b/g/n, work with the frequency ranges 2.4 and 5 of GHz, support mode 3x4 MIMO with three space flows, have the maximum high-speed performance of data transmission making 450 Mbps.

As Andrey Kharitonov explained, the business development manager of Cisco, these access points are intended for networks of the enterprises and can be used also by service providers, including for providing managed services. Aironet 2600 are supplied a number of technologies which ensure stable functioning in the conditions of the raised zashumlennost of communication channels and optimize use of radio-frequency resources.

The Cisco CleanAir technology, for example, providing hardware implementation of spectrum analysis allows to identify interference sources in a coverage of a wireless local area network, to determine the level of danger of these sources, to automatically rebuild frequency channels to eliminate influence of an interference. Cisco ClientLink increases performance in the environment with the weak level of wireless signals at the expense of the directional radiation and regulation of a phase and power of transmitting antennas for improvement of operation of the devices supporting standard 11a/g at simultaneous operation of clients 802.11a/g/n.

According to Mikhail Kader, the honored consulting engineer of Cisco, in the company expect to produce tens of thousands of Cisco Aironet 2600 devices a year. For May, 2013 there are already dozens of their Russian customers and several pilot projects with service providers are implemented.

Cisco emphasizes that local production reduces terms of accomplishment of orders from more than two months to two-three weeks. The additional overheads requiring finance and time expenditure are excluded, including, in particular, obligatory licensing of each batch of the supplied equipment in Minpromtorg.

Aironet 2600 will not come to our country from foreign manufacturing enterprises any more, but price level will not change. The solution to begin production of products for wireless local area networks is caused by high rates of development of the Russian market of WLAN which corporate segment, according to data of Cisco, increased since 2010 more than by 20 times. More than 90% of the Russian business of Cisco in this area are connected with corporate customers, 10% are necessary on telecom operators.

By own estimates of Cisco, the size of the market of wireless local area networks was in Russia in 2012 150 million dollars. The share of the corporate sector where the company possesses a half of sales, reached 82 million dollars.

Cisco emphasizes that local production does not assume, as a rule, existence of warehouse stocks of finished products and that product output, considering deadlines of their production, is performed according to requirements of customers at once.

"We intend to develop production of products in Russia. Strategic partnership with the state remains one of the priority directions of business Cisco in our country" — Mikhail Pakhomov, the director of Cisco of government relations emphasized.

Expansion of production in Russia

On November 19, 2013 Cisco announced expansion of production of the products in Russia. In particular, the company started a production process of five different sets based on routers of the Cisco 2911R series which are manufactured in Russia since March, 2012. Cisco expects that it will allow to expand significantly a set of the integrated network services offered local customers.

In addition, the company expands local production of wireless access points: it is for this purpose going to organize production in Tver of two new families of wireless products. One of them — Cisco Aironet 1600 — represents a younger product line of the access points of a corporate class based on specifications 802.11n and intended for a wireless capability in corporate networks of the small and medium size.

The second product family –Cisco Aironet 3600 – is intended for increase in coverages when ensuring wireless communication for tablets, smartphones and high-performance notebooks.

Cisco increases number of the products manufactured in Russia

"Production organization in Russia of two new product lines will give to Cisco the chance to offer the Russian customers all range of wireless access points with different technologies in the different price ranges", - note in Cisco.

2012: Production of routers

In 2012 lines of products of Cisco made in the country were replenished with the Cisco 2911R router with the integrated network services (ISR), and in 2013 - the unified wireless access points with the built-in and external antennas.

2011

The first products: modules for virtual networks

Cisco began production of the products in Russia in April, 2011 with the hardware VPN module. The modules NME-RVPN providing formation of virtual private networks with support of the Russian cryptographic algorithms became the first devices manufactured by Cisco in Russia. These devices are certified FSB of Russia as the system of cryptographic information protection of classes KC1 and KC2. The newest version of their software conforms to requirements of class KC3.

These modules can be installed in Cisco 2911R routers with the integrated network services. The release of these routers, the most mass on supply rate in Russia, began in Tver in 2012.

In October, 2011 the company started production of the digital Set-top boxes intended for transfer of video content and new television services in IPTV networks.

Production on Altonika

In May, 2011 it became known that the Altonika production company will become the first independent Russian producer of the main electronic nodes for the equipment Cisco Systems. It is about production of the main electronic nodes for the innovation hardware VPN module Cisco. In the territory of Russia it will be performed both installation of printed circuit boards, and finishing assembly and testing.

Attention to the organization of production process, use of modern technologies and essential production capacities allowed PK Altonika LLC to become the first Russian producer of the main electronic node of the VPN modules Cisco. This product increases safety of data transmission on corporate networks — both in the organizations, and between branches, employees on remote work. The VPN module Cisco provides confidentiality of transfer of personal data, financial transactions and other transactions. The Cisco routers equipped with such module can be used for creation of geographically distributed networks.

See Also

• Cisco Systems