Week of January 24, 2000
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Oh, Cisco (Systems)!
New Boston Campus Will House 5,000 Employees

Labor and high-tech infrastructure apparently the driving forces in the recent decision by Cisco Systems (www.cisco.com) to set up a massive 1.8 million-sq.-ft. (162,000-sq.-m.) corporate campus outside Boston that will house 5,000 employees. The San Jose, Calif.-based world leader in Internet networking has been growing so rapidly - averaging 2,500 new employees every quarter -- that it feared it was going drying up the high end of the Silicon Valley labor pool.

"With growth that fast, you have to question whether you're going to get the high quality employees you need by just recruiting in Silicon Valley," said Don Executive Vice President Cisco Listwin.

"This announcement demonstrates our commitment to the growth of high technology in New England", Listwin continued. "New England continues to be a source of great talent for Cisco. Our five-year history in Massachusetts has been very productive and by working with government leaders such as Gov. Paul Cellucci and the local communities, we are taking responsible steps now to prepare for our future growth."

Ellen Jamason, Cisco director of worldwide real estate, agreed that the Boston metro had all the essential ingredients to accommodate such a major high-tech complex.

''The New England area is attractive to us in part because of the region's start-up and technology-related venture capital activity," Jamason said. "We're also particularly attracted to the area's education centers. Those factors make it one of the highly fruitful areas for us for in terms of talent and acquisitions.''

Cisco's New England Acquisitions
Valued at $3 Billion Speed Expansion

Cisco five years ago established its initial presence in New England. But the company has only lately become particularly aggressive in expanding in the region. Part of that aggressiveness rests in the eight acquisitions of New England-based companies that Cisco had made, with the combined price tag for those purchases totaling US$3.06 billion.

One of those acquisitions was Cambridge-based Akamai Technologies. Cisco invested $49 million in Akamai before the firm went public last year. With Akamai's current market capitalization, Cisco's stake in the company is now worth more than $1 billion. Cisco's other major New England acquisitions include GeoTel Communications and WebLine Communications.

Before the announcement of the new campus, which will span 580 acres (232 ha.), Cisco had already expanded to 1,500 New England employees based at five primary sites: Chelmsford, Burlington, Lexington and Lowell, Mass.; and Manchester, N.H. As of this writing, Cisco officials hadn't decided whether to transfer those employees to the new Boston-metro campus or to continue the leases at those five locations.

The newly announced Boston campus is part of Cisco's rapid expansion in several areas, including its service provider business line (the company's fastest-growing sector), its broadband networking equipment, its solutions support for DSL (digital subscriber lines) and its routers that aggregate network traffic.

The Boston area has long been known as a major high-tech cluster with a deep pool of high-skill labor. Recent years, however, have seen the area enjoying notable success in landing large-scale high-tech location commitments. In addition to Cisco, Sun Microsystems, for example, a year opened a $124 million, 158-acre (63.2-ha.), 1,800-employees campus in Burlington, where Sun plans to ultimately ramp up employment to 4,000. Oracle and Lucent Technologies have also recently bulked up their operations in the Bay State.

Gov. Paul Cellucci alluded to the state's success in landing big high-tech fish while welcoming Cisco's huge commitment.

"Cisco is a well-known global leader in the high-technology world, and I am pleased with their decision to continue their growth in our state," Cellucci said. "This is a clear indicator, not only of the strength of our economy but of Cisco's recognition that Massachusetts is a good source of high-technology talent."

Three Sites Purchased For New Complex

Cisco's new campus, which will be known as the New England Development Center, will be centrally located midway between Route 3 to the north and the Massachusetts Turnpike (Interstate 90) to the south. Cisco purchased three sites that will make up the company's new campus.

Site I consists of an existing 277,000-sq.-ft. building (24,930-sq.-m.) on 140 acres (56 ha.) of land, which will be renovated to Cisco's specifications. Cisco bought the land and the existing facility from Japanese computer maker NEC Technology. Site I is located at 1414 Massachusetts Avenue, in the town of Boxborough, just south of Route 495.

Purchased from the Towermarc Business Park, site II consists of some 350 acres (140 ha.) of undeveloped land, which will be developed to accommodate seven buildings with a total space of 900,000 sq. ft. (81,000 sq. m.). The site is predominantly located in Boxborough, although 46 acres (18.4 ha.) are located in the city of Harvard.

Purchased from Houston-based Hines Interests Limited Partnerships, site III in the town of Littleton consists of 90 acres (36 ha.) of undeveloped land, which will be developed to accommodate five buildings with a total space of 640,000 sq. ft. (57,600 sq. m.) Developing the three sites will require a capital expenditure of around $250 million, Cisco officials estimated.

Cisco to Manufacture in Boston And Expand in Texas?

The new Boston complex may also house a manufacturing plant, officials added. Should that come to pass, it would mark the first time that Cisco has sited a manufacturing operation outside of California.

Once works begins, development of the three sites will take some 18 months, Cisco officials explained. How quickly the site staffs up to 5,000 employees depends on Cisco's growth in New England over the next several years, they add.

Listwin hinted that Cisco may soon also expand into other areas. The most likely expansion locale, he said, is Texas, where three of Cisco's latest acquisitions are based.

©2000 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.