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President of Russia Vladimir Putin appears to square off against Cisco CEO John Chambers in Skolkovo Project

Last month the Financial Times reported serious criminal graft allegations against Skolkovo. So what's been the financial impact of Cisco's involvement with Skolkovo? Well, perhaps the Cisco Q2'FY13 earnings conference call is insightful as Cisco CEO John Chambers revealed: "Our Europe, Middle East, Africa, and Russia region declined by -6%, a slight improvement from last quarters, decline of -10%."

Hummelstown, PA:   Mon, 3/4/13 - 11:59pm    View comments

Cisco Chairman & CEO John ChambersPresident of Russia, Vladimir PutinOn June 23, 2010 Cisco CEO John Chambers gushed enthusiastically in his press release that Cisco made a firm commitment to invest $1 billion USD in the Russian Skolkovo Project as shown in the below video.

"Through direct innovation-enabling investments and a deepening of its collaborative model...Cisco aims to further stimulate the venture community which enables Russia's innovation agenda.

"Cisco aims to initiate several internal Cisco start-up business units using the Skolkovo innovation platform, and will contribute to transforming Skolkovo into one of the most advanced technology regions in the world."
 


 

Personally, I find the innovation claims made to Russia by Chambers absolutely scandalous!

How so?

Well, under the 18-year long leadership of CEO John Chambers, Cisco has demonstrated a stunning inability to innovate internally, witnessed by its outrageously expensive "spin-in strategy" and consistent need to repetitiously acquire innovative technology companies that come with one giant Cisco shareholder wealth destroying hitch:

Most innovations achieved by a Cisco acquisition appear to have been accomplished PRIOR to being acquired by Cisco.

But hey, don't take my word for it.

For example last year, respected technology pundit Om Malik famously wrote about Cisco:

Cisco memo: We can’t build anything

"I see a company making a tactical admission that it has become so big, so bureaucratic and so broken that it cannot count on internal teams to build any ground breaking products...

"Cisco which has made a fortune from selling routers and switches should be thinking about developing next generation platforms. The fact it can't shows that as a company it has become addicted to the old way of doing things."


 

Fast forward to December 12, 2012 as shown in the below President of Russia document:
 

Vladimir Putin vetoed Federal Law to amend the law on the Skolkovo Innovation Centre
 

The President of Russia, Vladimir Putin, vetoed Federal Law to amend the law on the Skolkovo Innovation Centre, publicly stating:

"The federal law fails to define the criteria and parameters for the assessment of the Skolkovo Innovation Centre's effectiveness in the economic, social and scientific spheres. The law does not fill the existing gaps in the Russian legislation with regard to intellectual property rights regulation and does not address the needs of innovative companies."

Key facts of Cisco's involvement in the Skolkovo Project:

  • One of the areas of focus for Cisco and the Skolkovo project will be for Cisco to play a key role in the design of 'Technopolis Skolkovo', a framework that will be based on the business model behind the Cisco Globalisation Centre East in Bangalore, India.
  • 'Technopolis Skolkovo' will be designed to fully reflect the concepts of Cisco Smart+Connected Communities and will serve as a best practice facility in multiple focus areas such as: Smart Connected Buildings, Smart Grid, Smart Connected Real Estate, Safety and Security, Connected Transportation, Education, and Healthcare.

Technopolis Skolkovo
 

It also appears that President of Russia Vladimir Putin has squared off against Cisco CEO John Chambers and Cisco's involvement with Technopolis Skolkovo, as Putin continued:

"At the same time, the status of the existing science towns is abolished. In addition, the law grants the Skolkovo Innovation Centre management company the right to approve urban planning and design standards and identify the list of necessary planning permits and authorisations and construction phases, which is called into question. In line with Russian legislation, this function is the responsibility of relevant state agencies and local authorities. The President believes that the shortcomings identified in the federal law need to be addressed."

3-months ago, President of Russia Vladimir Putin chaired a meeting of the Agency for Strategic Initiatives to Promote New Projects, which appears to be a direct threat to Cisco's involvement in the Skolkovo Innovation Centre.

Last month the Financial Times reported serious criminal graft allegations against Skolkovo:

Russia’s ‘Silicon Valley’ hit by graft claims

"The first sign that Skolkovo was in trouble was a secret report by the state accounting chamber, published by Moscow newspaper Vedomosti on Wednesday, revealing alleged 'violations' of Rbs1.4bn of funds in the Skolkovo budget. The report was followed by a probe by the Investigative Committee, equivalent to the US FBI, which found that Rbs24m, roughly $800,000, in state funds had been stolen from the budget. Russia's plans to create a new 'Silicon Valley' as a hub for high-tech investment have received a setback after police said they had uncovered embezzlement of funds worth about $800,000 from the project's budget."

Finally an expose of Skolkovo was published in January 2011:

Medvedev’s Fraud at Potemkin Skolkovo

"By the way, when California Governor Arnold Schwarzenegger brought U.S. businesspeople to Skolkovo in October, they were shown two projects, neither of which had any prior connection to the Russian government. Fittingly, when the U.S. delegation flew on to Kazan after Skolkovo, they were shown the same two projects there. Apparently, Russia has such a dire shortage of innovation projects that they have to use the same ones over and over again. Go Russia!"

So what's been the financial impact of Cisco's involvement with Skolkovo?

Well, perhaps the Cisco Q2'FY13 earnings conference call is insightful as Cisco CEO John Chambers revealed:

"Our Europe, Middle East, Africa, and Russia region declined by -6%, a slight improvement from last quarters, decline of -10%."

Related stories:

Putin creates powerful innovation agency; Skolkovo could lose momentum

Cisco letter admits culpability in ripping off State of West Virginia
 


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