Cisco’s CEO John Chambers made it clear this week that the company is banking on developing countries for future growth. The company launched its Globalization Center in Bangalore, intended to be a second headquarters and a hub for emerging-market business growth, rather than just a local design center. The company’s investment backs up the claim. In recent interviews, Chambers says he plans to triple headcount in India over the next few years, base more senior executives in developing countries, and double their venture capital investment in Indian companies (to $200 million). Cisco also announced a long-term expansion plan for China worth $16 billion - twice the company’s investment over the past five years. Cisco has good reason to believe these investments will pay off; their revenues in developing countries are already climbing 30-50% a year.
In fact, according to one Cisco executive, the company no longer includes India or China in the category of “emerging markets.” For Cisco, these countries have “emerged.” Certainly, the company deserves credit for its forethought, early investment and tenacity in the face of hiccups like one encountered in Brazil last week. But, early entry by infrastructure companies is also part of a natural progression. Companies like Cisco, Ericsson, IBM and others take the lead in new technology markets, laying the foundation for other technologies to operate.
In the context of emerging markets, IT and telecommunications firms can benefit from the trailblazing of infrastructure companies. As global players like Cisco accelerate expansion, they lay a path for broad economic and market growth. Their initial investments and early growth provide strategic indicators for subsequent market opportunities for their industry counterparts. Tracking the activities of infrastructure technology firms can help global software and device manufacturers avoid pitfalls and see farther ahead in markets that may be less transparent than developed countries.
Also in the News:
- OLPC becomes a marketing machine
- Everex launches low-cost PC
- Google to enter mobile phone industry with software
No comments:
Post a Comment