Cisco Systems plans to invest $12 million to open a research and development center in Tokyo early next year, to focus on Internet routing and software technologies. Cisco wants to take advantage of the Japanese Internet market, where the widespread deployment and adoption of broadband access provides an opportunity to help service providers deliver new high-speed services to consumers and businesses.
Broadband services cost substantially less in Japan than they do in the United States, and broadband access is growing at 500% a year. As a result, Japanese telecom carriers handle traffic loads five times higher than those carried by U.S. service providers, according to Cisco.
The Japanese R&D center will let Cisco develop products that it can then sell in other parts of the world. "Products and technologies produced to meet Japan's demand for intelligent bandwidth will be robust enough to handle any other market in the world," Mike Volpi, senior VP and general manager of Cisco's routing technology group, said in a statement issued Thursday.
The Tokyo center initially will focus on IP version 6, multicast, wireless, security, and quality-of-service technologies. Cisco plans to begin by staffing the center with 10 engineers.
Cisco is no stranger to the Japanese market. Japanese service providers offered input when the company was developing its high-capacity router, the CRS-1, which was released earlier this year.
"In terms of Internet access, Japan is showing us what the future may look like across the world," Volpi said. "In Japan, an estimated 35% of households have high-speed connections, and data communications traffic has grown 10 times in the last two years. I believe that many of the new Internet business models will come out of Japan."