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Cisco Hearts India

Craig Matsumoto
News Analysis
Craig Matsumoto
12/6/2006
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Cisco Systems Inc. (Nasdaq: CSCO) plans to triple its workforce in India, to 6,000 employees, during the next three to five years, CEO John Chambers said today during a visit to the country.

The company also announced the creation of the Cisco Globalization Center East, to be located in India and led by Wim Elfrink. No, that's not some World of Warcraft character -- he's Cisco's new chief globalization officer. (See Cisco Updates Investment.)

Chambers's words today reaffirm the $1.1 billion commitment Cisco made to India a year ago, money that includes a $50 million Bangalore site to be completed in June and a $750 million budget for R&D and training during the next three years. (See Cisco Pays to Play in India and Cisco Invests $50M.)

Cisco also has pooled $100 million for venture investing in India, with today's release mentioning Bharti Telesoft Ltd. and Indiagames Ltd. as two of Cisco's investments.

Today's announcement also included mention of a manufacturing facility in Chennai, which initially will build products for the Indian market.

Cisco certainly isn't the only company interested in India. BT Group plc (NYSE: BT; London: BTA) and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) are among the telecom firms most recently announcing joint ventures in the country. And the possibility of funding startups in India has some venture capitalists all aflutter. (See BT Forms JV in India, Persistent ZTE Forms India JV, and VC Buzz Turns to India's Startups .)

One reason for all the interest from the telecom sector is the booming mobile market, which Lehman estimates will result in $4 billion worth of capital expenditures in the year 2008. (See Indian Carrier Capex on the Rise.)

India also remains a hot ticket in general, of course.

"In terms of future growth, Cisco sees India as a greater opportunity than China, only because they've been in China so long," says analyst Tim Daubenspeck of Pacific Crest Securities Inc. "It is a big opportunity; there's a lot of broadband connections. Whether it changes my model -- not really. It's just a natural evolution." — Craig Matsumoto, Senior Editor, Light Reading

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materialgirl
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materialgirl,
User Rank: Light Beer
12/5/2012 | 3:33:00 AM
re: Cisco Hearts India
Perhaps India will be bigger than China if local vendors don't steal their IOS code with apparent Government consent, then get the potentially preferential sales treatment that has allowed Huawei to trounce CSCO in the local market.
Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 3:32:59 AM
re: Cisco Hearts India
Heh - good point about the IOS code flap.

Preferential sales treatment is key, if you're talking about what I think you are -- that would be one reason why Cisco is pumping so much money into its India move, to drum up favor with the government and tech industry around the country.

Aren't there some folks saying that India will rise faster than China, in terms of being a tech market? (I'm vaguely remembering reading that somewhere; I'm sure someone will correct me if it's just insane.)
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