Cisco Systems Inc. on Monday said it opened its largest development center outside the U.S. in Chennai, India, to use that country's growing base of software talent to design more networking software.
The center will be staffed with 75 software engineers from HCL Corp., an Indian software company. San Jose-based Cisco will provide the networking equipment.
The decision by the world's top networking equipment maker is a vote of confidence in the burgeoning software industry in India. The country's software presence has grown dramatically in recent years, with both Indian-owned companies and U.S. multinationals selling products made there to international markets.
The partnership will "further propel us and India into the global information technology arena," said HCL Chairman Shiv Nadar.
The Indian software industry is able to draw from a large pool of talented computer programmers and mathematicians, said Noel Lindsay, an analyst at Deutsche Morgan Grenfell.
It's not the first time the networking industry has drawn on that talent, Lindsay said. Cabletron Systems Inc.'s Zeitnet division, acquired last year for $116.7 million, relied on developers in India for the software controlling its ATM, or asynchronous transfer mode, switches for high-speed movement of data across networks.
Microsoft Corp. Chairman Bill Gates said on a visit to India in March that the country's software industry, expanding at the rate of 50% a year since 1991, is set to be a $6-billion business by 2000.
Microsoft last year set up a regional headquarters for the Indian subcontinent in Bangalore, the southern Indian city that is also home to many Indian-owned software companies.
The importance of the Indian software industry is all the more remarkable in light of the relatively low level of computer use, analysts have said. In the U.S., there are 330 computers for every 1,000 people. In India, there is just one computer for every 1,000 people.
Cisco's Chennai center will focus on developing software to manage, test and maintain the reliability of computer networks, Cisco said.
Shares of Cisco fell $1.69 to close at $75.44 in Nasdaq trading.