Extreme Networks Inc. (Nasdaq: EXTR) has opened its first R&D center in India in what officials say is an attempt to consolidate the outsourcing they've been doing in that country.

The opening of the facility in Chennai was celebrated with a press conference in India on Thursday, according to news agencies there.

It's an insourcing-the-outsourcing deal, according to a spokesman contacted via email. Extreme has been working with Indian research teams for a couple of years and is bringing them inhouse.

The heated competition for Indian engineering appears to have played a role in the decision to open the research center. "We desired improved ability to retain the talent," the spokesman writes.

The "insourced" teams consist of 35 contractors found through various outsourcing agencies. Indian papers say Extreme plans to increase Chennai's staff to 100 within 12 months.

The India R&D center will focus on software and test. Extreme isn't revealing its investment in the center (reported in India to be US$10 million); the spokesman says only that the cost "will be approximately equal to the outsourcing cost for the past two years."

Extreme says that no U.S. jobs are being erased or moved as the result of the new center opening. There's also no word on whether Extreme's Silicon Valley employees will be offered the choice of moving themselves and their jobs to India, as Force10 Networks Inc. offered last year (see Force10 Relocates Jobs to India and 2004 Top Ten: Notable Quotes).

Extreme employed 831 as of September 2004, according to an SEC filing.

— Craig Matsumoto, Senior Editor, Light Reading