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EMC Investing US$1.5 Billion in India

EMC plans to invest US$1.5 billion in India over the next five years, to expand its research and development (R&D) and services delivery from the country, a company executive said on Wednesday.

The investment is the largest committed by the company outside the U.S., and is in addition to $500 million that the company has already invested in India so far, David Goulden, EMC's executive vice president and chief financial officer, told reporters in Bangalore.

The company announced in January that it was cutting 2,400 jobs, a move that would reduce annual spending by about $350 million during this year, with savings increasing to about $500 million in 2010.

EMC will continue to control costs in the current difficult economic situation, but will also invest in new opportunities, Goulden said.

The company opened a 495,000 square-foot facility in Bangalore on Wednesday. It will house an R&D center and will deliver customer support services and services for EMC's own internal IT organization.

The R&D facility is three times larger than the previous one, and can house up to 3,500 employees, Goulden said. It will provide an opportunity for EMC's sales staff in India to work more closely with product development teams in the country, to develop products for India and related markets, he said.

The facility will also work with Cisco's R&D facility in Bangalore on joint product development, Goulden added. He did not however discuss a report (http://online.wsj.com/article/SB125191829119980601.html) in The Wall Street Journal that Cisco was planning a joint venture with EMC for technology services.

Services are an important part of EMC's revenue but the company's focus in the area of services is on helping customers get more value from EMC's products, Goulden said. The company will not get into general systems integration and services as a business like IBM and Hewlett-Packard, he added.

EMC currently employs about 2,000 staff in India. It has another 2,000 staff with outsourcers providing services to the company on a variety of projects, Goulden said. The company did not disclose how many more staff it is adding in the country as a result of the new investment.

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