Cisco, KPMG merger may spawn local tech centre

Speculation is mounting that Cisco will locate in Australia one of the technology centres being developed with accounting firm KPMG.

As part of the investment of $US1 billion in KPMG's US operation, the accounting and consulting firm will set up six technology centres, where some 4000 Internet consultants will develop Net-based data, voice and video services for Cisco customers. For its part, Cisco will provide the hardware to develop these products and services, and will use its sales force of 6000 people to market them.

While it is known that four of the centres will be in the US, there is speculation that of the other two, one will be slated for Europe and one for the Asia/Pacific region -- possibly Australia, according to a reliable source close to Cisco.

The joint venture between Cisco and KPMG will be known as KPMG Consulting. For its $1 billion, Cisco is taking a share of slightly less than 20 per cent in the new venture, with KPMG taking the remainder. Although US-based, the company will serve customers worldwide.

The companies have signed a letter of intent, and KPMG's board of directors has approved the move.

KPMG is the US member firm of KPMG International, which advises companies on tax, accounting and business issues.

KPMG has served as a consultant to Cisco on developing its Internet strategy, the companies said.

KPMG in the US already has a long-standing alliance with Cisco. One part of that alliance is the Cisco Resource Network, which offers mid-sized businesses access to Internet-based applications.

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