BEIJING, June 17 -- President and CEO of Cisco
Systems John Chambers, 56, speaks very quickly.
Addressing a group of Asian journalists early this
month at the company's headquarters in San Jose, California, even the
simultaneous interpreter often failed to follow his West Virginia accent,
prompting complaints from Chinese journalists for missing points on business
strategies. Chambers claimed he was speaking at his slowest speed.
Chambers' actions speak as fast as his words.
Cisco, the world's largest computer network equipment
maker, finished its 100th acquisition early this month. The deals were done
within 10 years of Chambers' taking over as CEO in 1995. In 2004, Cisco's
revenue increased to US$22 billion from US$1.2 billion in 1995.
"Acquisition is ongoing," Chambers said. "We believe
acquisition is an effective way to grow."
Cisco has been entering new markets through
acquisitions. It will continue to seek new investment opportunities. It will
"get the best company to acquire" and attract the best talents, he said.
Chambers thinks highly of the Asian Pacific region.
"The Asia Pacific region has been our fastest growing
market year on year," he said. A large part of Cisco's manufacturing comes from
Chambers said many of his partners have said his
behaviour and style are somewhat Asian.
At Cisco's headquarters, 60 per cent of the staff
have Asian backgrounds.
In the Asia Pacific region, China, the most populous
country in the world, has a great IT education system, indicating a huge
potential for investment and personnel, Chambers said.
He has a special interest in China, doing business
here for the past two decades. "If I wasn't American, I would be Chinese," he
Cisco's latest moves in China include opening the
Urumqi representative office and expanding the Shanghai research and development
centre this month.
The Shanghai centre, at a cost of US$32 million, is
recruiting around 100 Chinese engineers to work better in the local market and
"Labour is a very challenging issue. Through the
R&D centre in Shanghai, we hope to have a better situation for labour costs
in China," said Mike Volpi, Cisco's senior vice president.
"The most important thing in IT is not technology,
but the people, the process." That is why Cisco has established around 200
networking academies around the country in co-operation with Chinese
universities. These academies provide online and offline programmes which have
trained thousands of Internet professionals.
Cisco entered China 11 years ago. So far, it has
invested in six Chinese companies including the Shanghai-based Shanda
Interactive Entertainment, the biggest Chinese online game operator.
All Cisco's acquisitions in China are made through
the Softbank Asia Infrastructure Fund, set up by Cisco and Japan's Softbank.
"Our investment returns from China are better than
those from America," Chambers said.
Cisco, with routers and switches as its core
products, faces challenges from major Chinese companies like Huawei Technologies
and ZTE Corporation, which are quickly expanding in both domestic and overseas
markets, with cheaper products.
But "we don't have an architecture business
competitor, competition comes from one or two products, and competition varies
by market," Chambers said.
Cisco router has competitors in China like Huawei and
ZTE, but "we don't compete much," said Volpi, who is also the general manager of
Cisco's Routing Technology Group.
Cisco has 70 per cent of the market share in routers
globally, he said.
Volpi also ruled out the possibility of Cisco buying
The company is expected to manufacture 40 per cent of
its products in China in the coming years to cut costs. All Cisco's products are
done through outsourcing.
The Shanghai R&D centre will start from the
telecoms sector and expand to other areas in the future.
"China's economy is developing rapidly, we hope it
will continue to develop, and people will pay more for out products," Volpi
Cisco will aim to educate customers and improve
distribution channels in China, he said.
"We'll continue to work on new services," as Cisco
has expanded, from routing and switching, to six new fields: IP (Internet
protocol) telephony, storage, security, wireless, home networking and optical
"More boxes, more problems; less boxes, less
problems," Volpi said, as to why Cisco is pursuing new technologies and
products. The company is making efforts to put different products in one
"What customers want today? Integrated network," said
Charles Giancarlo, Cisco's senior vice president and chief technology officer.
"(It's) not only cost saving, but also provides services very quickly."
One network combines many uses; the network realizes
the virtualization of resources and services. This is Cisco's blueprint for an
intelligent information network in the coming three to five years.
Cisco also has branches in Beijing, Shanghai,
Guangzhou and Chengdu. It also set up representative offices in Nanjing, Xi'an,
Shenzhen and Urumqi.
(Source: China Daily)