EMC Opens Wallet to Expand R&D Efforts in India
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EMC said today it will invest at least $1.5 billion in India over the next five years to ramp up its research and development program and consolidate its customer service operations.
The data storage equipment and software maker said the cash infusion, which augments the $500 million it has already spent in the past five years, will go a long way toward bolstering the company's global services capabilities in Asia and add more technologists and customer support personnel.
"India offers tremendous opportunities in innovation and market potential," EMC (NYSE: EMC) CFO David Goulden said in a statement announcing the investment. "In these economic times, leaders get stronger by their ability to make smart investments."
"EMC's commitment of $1.5 billion over the next five years illustrates the important role India will play in the company's global growth plans," he said.
The company itself is feeling the pain of the global economic downturn. In January, EMC announced it would cut 2,400 jobs, a move it says will save the company more than $350 million this year and another $500 million in 2010.
EMC isn't the only top-tier software company loosening its purse strings in the hopes of tapping into the expansive small- and mid-sized business market in India. SAP, IBM, Microsoft and Salesforce.com have all ramped up their financial commitments to India in the past two years.
Company officials said it will consolidate its local R&D, global services and various technical groups into a new 495,000 square-foot facility opening this week in Bangalore. The new India Centre of Excellence customer service and R&D hub will employ 3,500 workers.
"This investment is an important milestone in our journey to having world-class R&D and services organizations located in India," Sarv Saravanan, vice president and the Centre's managing director, said in a statement. "The new campus provides a state-of-the-art facility that will help us attract quality talent to drive innovation and growth out of India."
EMC shares moved up 22 cents to $16.53 in early-afternoon trading Wednesday. The stock was trading below $12 a share when it announced the layoffs in January.