Global networking equipment giant Cisco Systems unveiled its third phase of expansion in India on Wednesday, picking it as the location for a globalization centre and planning to triple its work-force in the country from the current 2,000 over the next three to five years.
In a move symbolic of its vote for India, Cisco also named a Chief Globalization Officer who will re-locate to Bangalore from his current base in the United States.
Company chairman and chief executive officer (CEO) John Chambers, who began a two-day visit to India aiming to woo corporate customers in a fast growing economy, also announced plans to launch a pilot facility to make internet protocol phones in Chennai.
Chambers announced this in the presence of Communications and Information Technology Minister Dayanidhi Maran, whose passion to boost high-tech manufacturing in India has resulted in significant gains for his home state, Tamil Nadu.
"India will contribute 5 per cent to the global revenues for Cisco in the next two to three years and the market is expected to grow between 20-40 per cent," Chambers said.
In order to set the pace for Cisco’s globalization strategy out of India, the company has decided to relocate Wim Elfrink, who is currently Senior Vice President of Customer Advocacy, to Bangalore. Elfrink, who will also be the Chief Globalization Officer for Cisco Systems, will relocate to India by January 2007.
Cisco, which last year announced a $1.1 billion investment plan in India and a $50 million Bangalore research and development facility expected to start work by June, 2007, is setting up a crack team of 12 executives who will relocate to Bangalore to run its globalization centre. The team will have a top executive each from Cisco’s 12 business categories that include segments such as routers, switches, storage, security, home networking and wireless.
"Nearly 20 per cent of our executives in each of these functions will operate out of India in the next two to three years. Cisco chose India as the location from which to expand its globalization vision because India has a highly skilled work-force, a supportive government, innovative customers and world-class partners that already have global capabilities,” Chambers said in the presence of Maran.
Cisco, which set up Indian operations in 1995, will initially make some products for the domestic market. "Cisco’s growing investments across all its operation areas in India is a vindication of the increasingly self sustaining ecosystem that the country provides for businesses to thrive and compete in a globalised economy," Maran said.
Cisco plans to invest more than $750 million in total towards R&D activities, training and development in India over the
next three years, and has also deployed a third of its $150 million fund to provide leasing and other financial solutions to customers. Its funding arm, Cisco Systems Capital, also plans to invest another $25 to $30 million over the next few months in companies involved in broadband content and digital media
Cisco also plans to invest $100 million in growing its technical services capabilities, spare part depots and distribution.
Earlier on Wednesday, Chambers aggressively made a case for the use of networking technologies that converge text, voice, video and data to woo corporate customers.
"Cisco saved $140 million on travel by transcending to the culture of virtual meetings. But that is the not the end objective of this transformation," he told 300 business leaders at a Confederation of Indian Industry (CII) forum.