Cisco's Investment In Local Tech Nears $100M
EILEEN KENNEDY
Brian Cole, technology demonstrator for Cisco, discusses the company's products at its Boxborough headquarters.
While San Jose, Calif.-based Cisco may be known for its computer hardware products, it is less well-known for its investment strategy in local companies.
But in fact Cisco, which has its New England Development Center in Boxborough, has invested $97.9 million directly in 17 Massachusetts companies, according to Paul Bosco, Cisco's site executive for the Boxborough facilities.
The company's corporate development division oversees acquisitions, investments and partnerships. It also determines if certain technologies are good fit with Cisco's plans for the future and its own technology.
The direct investment is on top of the $11 billion Cisco has spent on acquiring Massachusetts-based companies.
Feeding The Pipeline
While Cisco typically invests in mid-stage companies, the company has begun to worry about early-stage companies and whether they'll get proper funding in a down economy.
"It's very important to make sure that the pipeline of companies that are developing new technologies remains full," Bosco said.
Cisco built its Boxborough R&D center in 2003 mainly to house the dozen or so Massachusetts companies it had acquired over the years. It will soon integrate yet another - Pure Digital Technologies, which was acquired in March for $590 million.
While based in San Francisco, Pure Digital, which makes handheld digital recorders under the brand name Flip, has operations in Burlington.
Pure Digital's high-tech cameras will fit in with a lot of the other research and development work that goes on in Boxborough: web collaboration, video networking, computer security, virtualization and broadband. It is also central to Cisco's move from being a strictly hardware company to a consumer technology company.
The Boxborough campus includes four buildings totaling 676,227 square feet. Three of the buildings are built together on Beaver Brook Road and the fourth is down the street on Massachusetts Avenue. The site on Beaver Brook Road is permitted for 10 buildings, allowing for expansion beyond the three existing facilities. The extra space could house 5,000 workers.
While Cisco's headcount in Boxborough stands at 1,755, it is down from previous years when it was as high as 2,000. During the last recession in 2001, the company began cost cutting in a number of areas.
"There's been ongoing restructuring all along and a big emphasis on a company-wide initiative to reduce expenses by $1 billion. The goal has been to save as many workers as possible by reducing travel and a number of other areas," said Rich Power, a Cisco spokesman.
In early February, Cisco said it would lay off between 1,500 and 2,000 workers company-wide, and estimated that fewer than 40 of them would be in Boxborough.
Beyond investing in local tech firms, Cisco is part of a larger group working to raise the IT industry's profile in the state. Bosco is co-chair (along with Donna Cupelo, regional president for Verizon) of a group called the IT Collaborative, which is made up of more than 60 IT companies and academic institutions with operations in the state. Other companies in the group include Hopkinton's EMC and Microsoft.
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