Cisco Systems sees big potential in Japan.
On Thursday, the company announced it will invest $12 million over the next five years in a new research and development center in Tokyo. The facility, which will focus on new Internet Protocol technologies, is set to open in February.
Initially, Cisco will employ about 10 engineers, who will work on enhancements to its IOS routing software and extensions for its IOS XR software, which was developed for its latest high-end router, the CRS-1. Engineers will also work on other IP router features and new products, as well as Internet Protocol version 6 and wireless technologies, the company said.
Tokyo was chosen as a site for the facility because of Japan's leadership in broadband services, Cisco said. Japan has had great success with its government-led "e-Japan" program, which has provided incentives for rapid broadband deployment throughout the country.
As a result, Japan has one of the most sophisticated broadband markets in the world. Carriers have rolled out new consumer and business services such as nationwide voice over IP and sophisticated game and entertainment applications. Traffic loads on many Japanese service provider networks are five times higher than in the United States.
The Japanese government has also been a big supporter of IPv6. The government has already been investing more than $18 million annually in an IPv6 network that will connect around 100 local governments, corporations and households.
"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," Mike Volpi, senior vice president of Cisco's Routing Technology Group, said in a statement.
Cisco has already begun working closely with Japanese service providers. Earlier this month it announced several contracts for the new CRS-1 from Japanese carriers and research institutions, including Softbank, which operates under the Yahoo name and is one of the larger Internet service providers in Japan, and the National Institute of Informatics in Japan.
Separately, Cisco announced earlier this month that it plans to co-develop advanced IP routing products with Japanese equipment maker Fujitsu.
Japan isn't the only Asian country Cisco has its eye on. In September, the company announced major investments in China and India. Over the next five years, it plans to spend $32 million on a research and development center in Shanghai, China. That facility will focus on developing voice over Internet Protocol (VoIP) technologies for telephone carriers. Cisco has also announced plans to launch a venture capital program in India to scope out investment opportunities in new start-ups.