Mike Volpi on Why Cisco is Investing in a New R&D Center in Tokyo, Japan
December 16, 2004
The announcement that Cisco Systems® is to open an R&D center in Tokyo, Japan, represents a milestone in the development of next-generation Internet technologies.
The facility, scheduled to open in the first half of 2005 with an initial investment of $12 million over five years, will concentrate on IPv6, multicast and mobile wireless technologies, which are attracting world attention.
Cisco plans to focus its expertise on the development of corporate network devices (routers and layer-3 LAN switches) while also continuing to research areas such as security improvement and new quality-of-service technologies.
Tokyo was chosen for this facility because of the successful government-led "e-Japan" program, which enabled Japan to build the most advanced network infrastructure in the world.
The role of information networks, and the range of services using large-volume video and sound data, is expanding further due to the spread of optical fibers, cable television networks, DSL and other high-speed networks in companies and homes.
The Tokyo R&D center will initially employ about 10 engineers for research and development operations and will allow Cisco to take advantage of these unique market conditions for the creation of new routing and software products.
To find out more about this development, News@Cisco spoke to Mike Volpi, senior vice president and general manager for Cisco's routing technology group.
Why Japan for R&D into routing technology?
Mike Volpi: Japan is perhaps the most sophisticated broadband market in the world. Service providers in that country offer broadband services with as much as five times more bandwidth than their U.S. counterparts. If the products coming out of our R&D effort can serve the Japanese market, then we believe they would prove themselves robust enough to handle any other market in the world.
Considering the statistics, locating an R&D center in Japan makes sense. In addition, this project is consistent with our strategy of allocating research and development resources where there is talent and market opportunity.
Has Japan played a part in R&D at Cisco before now?
Mike Volpi: Absolutely. The Cisco CRS-1, the industry-leading carrier routing system launched earlier this year, was developed with direct input from Japanese service providers. Carriers such as SOFTBANK BB, and research networks such as SuperSINET, have been among the first companies to deploy the technology platform.
Is this your only R&D initiative in Japan?
Mike Volpi: No, not by far. We continue to work with leading Japanese academic institutions on various research projects. In addition, as part of our recently announced strategic alliance with Fujitsu, we will be doing joint development based on our IOS-XR operating system.
How is the Japanese market relevant to other regions?
Mike Volpi: In terms of Internet access, Japan is showing us what the future may look like across the world. I believe that many of the new Internet business models will come out of Japan.
In Japan, an estimated 35 percent of households have high-speed connections and data communications traffic has grown 10 times in the last two years. The consumer broadband market around most of the world is still in its infancy, with many residential customers still using a dialup connection to access the Internet.
Japan could be called a "proof-of-concept" market. The momentum they are seeing demonstrates that although revenues from traditional voice services are flat or declining for service providers, broadband opens the door to new kinds of rich media services, such as online gaming and video-on-demand, which translate into new revenue opportunities.
