Cisco Announces Next Stage of Corporate Strategy for China

Cisco announced the next phase of its corporate strategy for China, marked by new public-private collaborative programs within the country that deliver upon its $16 billion multi-year innovation and sustainability initiative first announced in November 2007, while expanding its organizational and leadership focus for the country.

Cisco's multi-year innovation and sustainability initiative in China includes research and development, education, procurement, investment and training. Announced by Cisco chairman and CEO John Chambers at a press conference in Beijing, key updates to this program and to Cisco's broad corporate strategy for China include: Expansion of Innovation and Education Commitments

-- Memorandum of Understanding (MOU) with China's National Development and Reform Commission (NDRC) with a focus on next-generation Internet and green research and development (R&D) programs, leadership training, best practice sharing and business development investments

-- MOU with China's Ministry of Commerce (MOFCOM), aimed at furthering Cisco's commitment to technology innovation and providing assistance to Chinese businesses in the development of Information Technology (IT) and business process outsource capabilities within the country

-- Strategic Cooperation with Peking University to create the 'Guanghua Cisco Leadership Institute' for leadership development (see separate announcement)

Broadened Focus on Corporate Strategy

-- The establishment of the 'Cisco China Strategy Board', a cross-functional executive board of senior leaders across Cisco's global business, to evolve and drive the vision and strategy for Cisco in China

-- The appointment of Jim Sherriff, Cisco senior vice president of global operations, to a newly formed position of chairman, Cisco China

"The next stage of our strategy for China reflects the country's importance to Cisco's global growth strategy and to our long-term business model, built upon next-generation innovation in collaboration and Web 2.0 technologies," said Cisco chairman and chief executive officer John Chambers. "Cisco's public-private collaboration within China not only helps accelerate these business efforts, but also helps the 1.3 billion people and growing number of entrepreneurs within the country gain access to social and economic opportunities afforded by the Internet."

Public-Private Collaboration for Economic and Societal Development

Public-private collaboration is a significant part of Cisco's innovation and sustainability initiative in China, in alignment with the country's long-term economic, societal and environmental goals. As part of Chambers' visit to the country this week, Cisco is also signing memoranda of understanding with China's National Development and Reform Commission (NDRC) and China's Ministry of Commerce (MOFCOM).

The memorandum between Cisco and NDRC aims to broaden and deepen cooperation in the areas of manufacturing and service outsourcing, next-generation Internet, venture investment, training and development, as well as environmentally focused research and development including energy efficiency, emission reduction and network-based green urban development.

Under the memorandum between Cisco and MOFCOM, Cisco will work with the ministry to help implement the Thousand-Hundred-Ten Project for China's business process operations industry. Through this program, Cisco will provide training to improve the skills of employees of China's business process operations companies. By helping to build a strong talent pool, Cisco is contributing to a critical step in the development of this industry, with the goal of transitioning portions of Cisco's global business process services to the country over the next three to five years.

Cisco and Peking University -- Investing in Students and Future Leaders

Cisco is cooperating with Peking University to create the 'Guanghua Cisco Leadership Institute' to develop talent in China to meet the needs of government and global enterprise leaders, including the NDRC. The institute focuses on creating research and executive development programs based on a curriculum of teamwork, collaboration and Web 2.0 technologies, thus fostering leadership for the Chinese globalization experience.

Representing a $20 million investment from Cisco over the next three to five years, the Institute of Leadership will focus on research, executive training and action learning, seminars and forums as well as the implementation of information and communications technologies, unified communications, Web 2.0 and Cisco TelePresence technologies.

Cisco China Strategy Board -- Chairman, Cisco China

Formally launched in early 2008 and overseen by Chambers, Cisco China Strategy Board is a cross-functional executive board of senior leaders across the company's global business aligning to drive Cisco's long-term corporate initiatives within the country. This includes oversight of the multi-year initiative in China, exploring further opportunities in public-private collaboration for social and economic development, Cisco's China business operations strategy, as well as small to medium-sized business and consumer IT market development programs.

In his newly appointed role as chairman, Cisco China, senior vice president of Global Operations Jim Sherriff is responsible for implementing the company's vision and strategy for China and representing Cisco's global business operations through direct engagement within the country. Sherriff and executive vice president of Global Operations Randy Pond will co-chair the Cisco China Strategy Board, which also includes Owen Chan, president of Cisco Asia Pacific and Thomas Lam, president of Cisco China.

"One of the key drivers of Cisco's differentiated strategy is our ability to capture market transitions. China is very clearly a market in a dynamic state of transition. As we continue to evolve our innovation, education and sustainability programs within China, we are also focused on our goal of making China one of the company's top three world markets in the next five years," continued Chambers.

Cisco first established operations in China in 1994 and now employs more than 3,000 staff in sales, customer support and service, research and development, business process outsourcing, IT outsourcing, Cisco Capital programs, and manufacturing. The company has 12 offices in China, a major R&D facility in Shanghai, Scientific Atlanta R&D and manufacturing facilities and several development centers supporting WebEx, which Cisco acquired in March 2007.