Cisco Systems reinforced the importance of the Indian market to its strategic plans yesterday by announcing a $100 million investment in venture funding for Indian startups. This is on top of a previous $100 million committed in 2005 to venture capital as part of a broader $1.1 billion investment plan for India.
The new investment was announced at a ceremony in Bangalore celebrating the opening of Cisco’s new Globalization - East campus that featured former Indian President A. P. J. Abdul Kalam and Cisco Chairman John Chambers. Cisco’s chief globalization officer Wim Elfrink said that India will serve as a platform for the company’s plan to capitalize on the growth potential in the emerging world.
“We will develop products and services here that will fully support the goal of services-led solutions-oriented models for customers in this part of the world,” Mr. Elfrink said.
Earlier Tuesday, at the star-studded Fortune Global Forum in New Delhi, Mr. Chambers said that while his company sees India as a huge market and a source of new ideas, the main reason it needs to have a major presence in the country is to leverage the Indian talent pool.
“Today, 65 percent of Cisco’s engineers in Silicon Valley in the U.S. are either first-generation or second-generation Asian,” Mr. Chambers told the CEOs gathered at the conference. “To maintain that employment edge, we need to be close to the massive population of engineers that India churns out every year.”
Company representatives said that Cisco currently employs over 3,000 people in India. In its first phase, the new Bangalore center will accommodate 1,200 employees in R&D and customer support. The company expects to have 10,000 employees in India by 2010.
The new facility will house an advanced briefing center to showcase Cisco’s latest technology solutions and provide an environment for closer collaboration on solutions for customers in emerging markets such as India, China, the Middle East, and Africa. The campus also houses the largest Cisco data center outside the US and will be used to demonstrate next-generation virtualization technologies and service-oriented architectures for companies with global reach.
Some executives at the Fortune conference said that being in India is not just about bringing in capital but of using it as a base for global ambitions. “If you are not actively present in the place where wealth is being created and where the GDP [growth] is the highest, said Lloyd Blankfein, the chairman and CEO of Goldman Sachs, “ it is not just that you are foregoing opportunities in those markets but you putting your global franchise at risk,”
During a panel, Fortune managing editor Andrew Serwer asked Chambers about the barriers that the U.S. is putting up to immigration, including the limit of 65,000 H-1B visas. “American schools do not produce enough qualified engineers,” Chambers said. “Anyone with a college degree who passes a security test, and wants a job in America should be allowed to come there,” he said.
Red Herring's Sufia Tippu reported from India.