Riding on its robust growth in China, global Internet networking giant Cisco
Systems is set to invest more in the market with a large funding pool at its
disposal, according to James Richardson, Cisco's global senior vice-president in
commercial business.
"Cisco has around US$15 billion in cash, a very strong balance sheet it's a
very healthy company. We invest globally through strategic investments. We had a
very successful track record co-investing here with Chinese partners in
technology firms. We are always looking for investments and fill the investments
that are available for us here in the Chinese market," said Richardson in an
interview on Friday.
"The China market is robust and grows much faster than any other parts of the
world. It is a market that we will focus on for many years," he added.
In the first quarters of the current financial year starting August 1, 2005,
Cisco realized a year-on-year growth of at least 20 per cent in China, compared
with its global growth of 10 to 15 per cent as estimated by financial analysts.
The commercial business, accounting for 25 per cent of its revenue, is the
fastest growing sector in the company at a rate of at least 30 per cent in
China.
However, Richardson was unwilling to release any business performance figures
for the China market.
Cisco's global sales last year reached US$24.8 billion with profits of
US$5.74 billion. The Asia-Pacific region accounts for 10 per cent of the firm's
global revenue.
According to the Xinhua News Agency, Cisco's China management earlier made an
announcement in Chengdu of Southwest China's Sichuan Province that it is seeking
Chinese partners with US$200 million to spend.
"Most Chinese companies Cisco invested in are around Beijing and we hope to
find more of them in western China," Thomas Lam, president of Cisco Systems
(China) Networking Technology Co Ltd, was quoted by Xinhua as saying.
However, Richardson said there is no specific amount allocated to the China
market and that Cisco's funding pool for the country is larger than US$200
million.
"If there is any good technology opportunities we can leverage, we will
invest. We are not specifically targeting one area of China. We will look at
companies."
Cisco's investment would be largely focused on network-based technologies
associated with the company's business.
So far it has invested a total of US$300 million in China.
In addition to Internet and software development companies, Cisco also makes
strategic investments in a network academy programme in which career-seeking
young people are trained in Internet technologies.
The programme started with Shanghai Fudan University in 1998 and has expanded
to 226 academies around the country.
To highlight the importance of the China market, the company launched one of
its five global research and development (R&D) centres in Shanghai last
October with an investment of US$32 million over five years.
The other four R&D centres include two in the United States, one in India
and one in Israel.
Since its establishment, the number of employees in the centre almost tripled
to reach 250, he said.
Richardson, who was in Shanghai to attend the company's annual conference
with 562 Asia-Pacific channel partners, said close co-operation with local
partners and the provision of purpose-built products for the local market are
the key to Cisco's success in China.
With several thousand partners in China, Cisco has been expanding its
products and services in the country. Next month, the company will launch a
localized voice product based on unified communications technology, he said.
(China Daily 06/24/2006 page5)
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