TOKYO, July 26, 1994 -- Cisco Systems has formed an alliance with 13leading Japanese technology companies in a joint venture designed todevelop and expand the emerging internetworking market in Japan. Thisalliance includes all of the leading Japanese mainframe, PC,telecommunication switch and semiconductor manufacturers. This is the firstjoint venture of its kind to bring together such a broad and diverse groupof investors.
The joint venture has been formed as a result of the 13 Japanese firmstogether committing to invest approximately $40 million in Cisco'stwo-year-old Japanese subsidiary. The sum represents slightly over 25percent ownership in the venture, the remainder to be owned by Cisco. Inaddition to the capital investment, joint development efforts between Ciscoand its investors, as well as a group project on multimedia internetworkingwill be part of the relationship.
Japanese participants in the joint venture are electronics vendorsFujitsu, Hitachi, Mitsubishi Electric, NEC, OKI, Toshiba and Compaq K.K.;system integrators CSK (parent of Sega) and NTT Data; content provider SegaEnterprises; and distributors C. Itoh Techno-Science, NetOneSystems, and Softbank.
Letters of intent for the financing have been signed, and capitalinvestment is expected by early October. The joint venture will be headedby General Manager Takatoshi Matsumoto, who joined Cisco in June 1992 to head the company'snewly formed Japanese subsidiary.
John Chambers, Cisco executive vice president, said, "This jointventure is perfectly timed to take advantage of the still embryonicJapanese internetworking market. Public networks are just now beingcreated in Japan, and large companies are just now installing privatenetworks. A major goal of the joint venture companies is to work together tosee that standards are in place to ensure interoperability as the markettakes off and as many different vendors bring out new products.
"While Cisco has been successful on its own in the Japanese market todate," he added, "the real opportunity to ride the coming wave of growth isto partner with companies that know this market intimately -- whether interms of developing products, integrating them or distributing them. With13 Japanese members, the joint venture is a truly Japanese entity thatgives many companies the opportunity to share in the fruits of the dramaticmarket expansion we anticipate."
The formation of the joint venture effectively turns Cisco's Japanesesubsidiary, established in1992 to offer local support and marketingprograms, into a full-fledged buying and selling entity. In addition toCisco's existing reseller channels in Japan, investors in this venture willalso have the ability to resell Cisco products in Japan.
Specific joint-development products will be established on anindividual basis between each investor and Cisco Systems, Inc. It isexpected that these projects will cover a variety of different technologiessuch as router cards, ATM, mainframe connectivity, software routers, networkadapter cards, etc. As these products come to market, Cisco Systems willexamine the possibility of distributing them in other parts of the world.
The group multimedia project "will draw on all our investors'strengths, from hardware and software development to systems integrationand installation, to provide a testbed for solving many of the problemsthat face the commercialization of multimedia in the future," Matsumotosaid.
In the future, Cisco, Nihon Cisco and its joint venture investors willexplore cooperation in related areas where there is an opportunity formutual benefit. Such areas will include the potential distribution byCisco of selected investor products or integration of selected investortechnology and components into Cisco products.
Cisco Systems, Inc., is the leading worldwide supplier ofhigh-performance, multimedia and multiprotocol internetworking products,including routers, bridges, workgroup systems for 10-Mbps/100-Mbps datatransmission, ATM switches, communication servers, software routers androuter management software. Cisco technology is used to buildenterprise-wide networks linking an unlimited number of geographicallydispersed LANs, WANs and IBM SNA networks. In the United States, Cisco istraded over the counter under the NASDAQ symbol CSCO.
Posted: Jul 26 08:19:45 1994
