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Extreme Opens R&D in India

Light Reading
News Analysis
Light Reading
6/24/2005

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

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stryke_d
stryke_d
12/5/2012 | 3:09:16 AM
re: Extreme Opens R&D in India
It is amazing how much energy companies spend on getting the spin right on these kinds of investments. Most global companies have R&D investments all over the globe including places like Viet Nam, New Zealand, Romania. Work goes to where the people are.

Interesting to see the inflation happening in wages in India which will drive their $$$ competitiveness down but in the end it is all about deliver effective results for any investment.
atmforever
atmforever
12/5/2012 | 3:09:11 AM
re: Extreme Opens R&D in India
The wage inflation in India is way over-hyped by some media. Its not that bad..actually according to some HR people I work with, wages have now stabilized (they increased rapidly for a year and now are coming back to normal levels for new hires). Whether we like it or not, its still very cheap to outsource and dont expect the $$$ competitiveness to go down anytime soon. With increasing pool of experienced workers their competitiveness might become better.
stryke_d
stryke_d
12/5/2012 | 3:09:07 AM
re: Extreme Opens R&D in India
Well thats good news. Will let you know once I am done my current recruitment process. I was at a call center conference in December and the folks from India we bemoaning the fact that it was getting cheaper to hire backpackers from Europe to staff seats than locals. Not sure how much of that was rhetoric.

d
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