Through TheFLY's Eyes: Cisco Systems

from Joseph Lazzaro of Theflyonthewall.com











Cisco Looks To The East

Network giant and technology bellwether Cisco (NYSE: CSCO) Wednesday re-affirmed that it will invest $1.1B in India over the next three years, and also announced that the country would become a globalization center for its operations.

Further, Cisco said it expects India to account for 50% of the company's future headcount growth and 5% of the company’s total revenue in 2-3 years, adding that it sees its India business growing by 20%-40% per year. The company plans to triple its India workforce in five years to about 6,000 employees. Cisco’s shares increased 5c to $27.09 on the news on Wednesday in early afternoon trading.

Cisco’s reaffirmation underscores both the globalization trend, in general, and India’s attractiveness, in specific, as the digital age progresses. More multinational corporations with the flexibility to do so are relocating jobs to lower-cost centers around the globe – often in regions that were not viable options before the Internet’s birth.

Further, India with its talented/educated workforce, steady growth in skilled workforce entrants, and equally significant, substantially lower labor costs, has positioned itself as the information technology center of the eastern hemisphere. Cisco’s announcement mirrors decisions by such industry giants as IBM (IBM), Intel (INTC), Dell (DELL), and Hewlett Packard (HPQ) to recognize India’s IT competitive advantage and expand operations there.