Cisco Targets Asia With Significant New Investments

Cisco is targeting the networking growth market of Asia with significant investments, including $32 million over the next five years for a Chinese research center located in Shanghai, the launch of a venture capital firm in India, and the establishment of new financing services for small and medium-sized business customers in Korea.

Cisco will hire 100 employees over the next 18 months in the Shanghai facility, which will focus on Voice over Internet Protocol (VoIP) technologies and other new features for telecommunications equipment, particularly for Chinese telephone carriers. It will open in the second half of 2005. Daniel Scheinman, senior vice president of corporate development for Cisco, noted that China's consumers rapidly adopt advanced technologies, and so the country is a breeding ground for new communications applications.

"By being closer to potential customers, it will help our engineers understand their requirements and react more quickly to their needs," Scheinman said in a statement.

This will be the first Cisco research center in China, although it has invested heavily through the years in Chinese startup companies. It has already spend $250 million in direct and indirect investments in Chinese startups.

The venture capital operation in India will invest in networking startups with new technologies or business models. Scheinman said that many Indian technology managers are returning to India from the U.S. to start new companies, and that, combined with India's sizable engineering pool and growing consumer market, drew Cisco's attention."Our new venture capital operation is a reflection of the maturity of India as a technology marketplace," he said.

Cisco is also putting $50 million toward Cisco Systems Capital Korea, its Korean subsidiary, to help Korean small and medium-sized businesses deploy Cisco networking technologies. That money will expand Cisco's existing financing programs in Korea.

The three moves reflect Cisco's recognition of the importance of the growing Asian market.

"We're making these investments in Asia now because of these countries' increasing importance to world commerce and our business," Scheinman said.