Today, the Internet is changing the way we work, live, learn, and play. As a pioneer of the Internet, Cisco Systems has become one of the worldwide leaders in networking for the Internet. Over 80 percent of the information on the Internet runs on Cisco products. Despite of the stagnation of the world Internet industry, Cisco Systems has achieved significant business growth worldwide, especially in China's market. In today's Market Analysis section, we will take you to Cisco (China) to examine how it is adding value to China's information economy at the same time as developing its own businesses in China.
Rated one of the 100 Best companies to work for in 2002 by Fortune magazine, and one of the most admired companies in 2002 by Global Finance magazine. What company deserves those honors? Cisco Systems.
Cisco Systems was founded in Stanford University in 1984. And the founders were an American couple. Innovation is one of the most significant traits of Cisco. In 2002, Cisco spent more than 3.3 billion US dollars, 30 percent of its operating expenses on R&D (research and development).
Du Jiabin, CEO of Cisco Systems (China): The tradition of innovation in our corporate culture includes two parts: continuous improvement and no technology religions. This culture can be interpreted that Cisco doesn't insist today's technologies are the best and Cisco continues to improve them.
As a very young company, Cisco ventured into China's market in 1994. The tradition of innovation has also continued in China. In 1999, millions of US dollars were invested to build the 24-hour a day/7-day a week Beijing Technology Support Center and R&D labs. Last year, Cisco poured over 10 million US dollars into running the lab.
Du Jiabin: This lab is more focused on design than research. While Cisco's clients are developing and they are striving to meet their clients' needs, Cisco should work and grow together with our clients. That's why we invest heavily in R&D labs.
Cisco has been taking an active role in the development of China's network architecture, especially in the banking sector. Cisco started cooperation with Chinese banks in 1995. Cisco has brought to Chinese banks the world's more advanced network technologies and infrastructure and its extensive experience in leading applications.
Bruce Sun, general manager of China Construction Bank: We started to build intranet for the bank in year 2000. I happened in charge of that program. We had a very close cooperation with Cisco. I think most parts of the equipment and solutions were provided by Cisco. The project turned out to be a very successful one, properly the most advanced in domestic banks. We will achieve quite a bit and we see the significant contributions from that network.
Cisco Grows with China's Financial Sector
May, 2002 Transfer of trading data from the Exchange to the backup data center, adopted by Shanghai Stock Exchange
January, 2002 Upgrading the network of Jiangxi Province Industrial and Commercial Bank of China
September, 2001 Building a centralized database and converged service system for China's MinSheng Bank
1997 and 1999 Winning two tenders to provide equipment for the State Financial Data Communication Project
Cisco isn't just limited to being a network equipment provider of Chinese banks. More importantly, it is bringing the world best practices of the banking industry to Chinese banks. On January 10th to 12th, over 100 executive and financial experts from home and abroad attended the Cisco Financial Industry Executive Forum in Xiamen. The theme of the forum is to share experiences on adopting multi-channel strategies in retail banking service.
Zhong XiangQun, department director of the Bank of China: Cisco not only provides Chinese banks with equipment and network technologies. Meanwhile, it is bringing many new concepts and methods to be proven in China's market, especially foreign banks' cases. Currently, the Chinese banking industry is integrating its resources and building large-scale databases. We need support from IT companies with new ideas like Cisco.
Liu Weiming: A lot of our customers treat Cisco as their reliable and stable partner, particularly in networking area. I can see this relationship is changing and transforming. The customers are expecting something more than just a vendor for themselves. They are expecting to share with more on how other financial institutions better utilize the network. Or they would like to know how Cisco really uses the network and gives them some insight, so that they can use in their own industry.
Aside from China's banking sector, Cisco also works closely with China's telecom industry. Cisco supplies cutting-edge networking solutions to China's telecommunications industry and has supported almost all the major telecom projects. Cisco is maintaining a good relationship with Chinese telecom operators. More importantly, it has committed to Chinese telecommunications partners to improve their competitiveness and efficiency.
Du Jiabing: When China's telecom industry operates according to the market needs, different telecom companies then start to compete with each other. Based on this situation, whichever telecom company can better utilize the networks and lower the operating costs, this company will become more competitive in the market. Right now, Cisco is using networking to cooperate with China's telecom operators.
In addition to contributions made by Cisco in financial and telecom industries, Cisco has also had a hand in the training and development of China's Internet talents. In 1998, Cisco established the first Cisco Networking Academy in China in partnership with Shanghai's Fudan University. The Cisco Networking Academy Program is a comprehensive e-learning program that provides students with the Internet technology skills which are essential in the global economy.
Han Jiang, manager of the Cisco Networking Academy Program, Cisco Systems (China): The Cisco Academy Program not only provides students with networking knowledge from books, but also the opportunity to get familiar with the major parts of a network such as routers by hands-on practices. Therefore, they can build a real network. It also builds students' confidence in obtaining relevant jobs after finishing the program.
Up till now, the Cisco Academy Program has cooperated with more than 170 Chinese universities. Twelve thousand students have graduated from this program. The hands-on approach is fast gaining recognition for the program.
Chen Hui, participant of the Cisco Networking Academy: You must have a target before you start to learn anything. Our company has many technical personnel. I consulted them before taking up this program. They recommended me this program, because this program is highly representative and well recognized.
As one of the major players in China's information industry, Cisco's own business in China is developing steadily. Take 2002 as an example, its business grew 9% in China's market. In contrast, Cisco's 10 major competitors in the Chinese market saw their businesses fall by 44%.
Du Jiabing We are pleased that fortunately Cisco operates in the Chinese market. The world Internet industry developed very slowly in the year 2002. What's even worse, some related industries declined. However, we see increasing demand for networking in each of China's industries. So despite that China's telecom industry is slowly developing post-restructuring, our business is booming, because enterprises, governments and the whole society have increased their network usage demand.
Currently, China is the fifth largest market of Cisco Systems. That means there are definitely some other opportunities waiting to be seized by Cisco in China, one of the most promising markets in the world. At the same time, it is achieving its business goals surely and steadily. Cisco is speeding up the progress of China's information economy.
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