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PRESS RELEASE

Cisco Invests US $12 Million in Japanese R&D Center

Tokyo R&D Center to Focus on Internet Software and Routing Technology, Drawing on Japan's Leadership in the Broadband Market

SAN JOSE, Calif., and TOKYO, Japan, December 16, 2004 - Cisco Systems®, Inc. (NASDAQ: CSCO), today announced its intent to open research and development center in Tokyo, Japan. The facility will open in February, 2005, and will represent an initial $12 million investment over the next five years, focusing on the development of Internet Protocol-based networking technologies, including routers and Cisco IOS® and IOS XR software, the most broadly deployed and advanced software platform powering the Internet.

The Tokyo R&D center will focus on advanced Internet technologies such as IPv6, multicast, and wireless, in addition to improving existing security and quality-of-service (QoS) technologies.

The Tokyo R&D center will initially employ 10 engineers and will allow Cisco to take advantage of unique Japanese market conditions for the creation of new routing and software products.

Tokyo was chosen for this facility because of Japan's leadership in broadband services. The success of the government-led "e-Japan" program has provided the country with one of the most sophisticated broadband markets in the world.

With Japanese enjoying broadband at rates costing about a thirtieth of what they are in the US, service providers continue to roll out new consumer and business applications and services, such as nation-wide voice-over-IP and rich media gaming and entertainment services. Japanese service provider networks carry loads that are five times higher than in the US and broadband access is growing at more than 500 percent a year.

"Products and technologies produced to meet Japan's demand for intelligent bandwidth will be robust enough to handle any other market in the world," said Mike Volpi, Senior Vice President and General Manager, Routing Technology Group, Cisco Systems. "Japan has been an innovator in broadband services and building an R&D center in Japan is a continuation of our stated strategy of allocating research and development resources where there is talent and market opportunity."

The Cisco Carrier Routing System (CRS-1), Cisco's recent routing innovation announced earlier this year, was developed with direct input from Japanese service providers and these have been among the first companies to deploy the technology platform. A new variant of IOS, IOS XR, was specially developed to handle the requirements for availability and scalability posed by the CRS-1.

About Cisco Systems

Cisco Systems, Inc. (NASDAQ: CSCO), the worldwide leader in networking for the Internet, this year celebrates 20 years of commitment to technology innovation, industry leadership and corporate social responsibility. Information on Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

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Cisco, Cisco Systems, and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. and/or its affiliates in the U.S. and certain other countries. All other trademarks mentioned in this document are the property of their respective owners.

 
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