HCL Technologies [Get Quote] and Cisco Systems have announced royalty model of partnership, where Cisco has licensed HCL the intellectual property for one of its network management products, and HCL will be responsible for enhancement of the product.

Addressing a press conference in Chennai on Monday, Shiva Nadar, founder, HCL, said that the team strength at Cisco centre in Chennai had grown to 1100 employees from around 30 in 1996. The centre was rated as high as the product development centres of Cisco in the US.

Over the years, the Cisco offshore development centre in Chennai, which was staffed and operated by HCL, was undertaking software development work for Cisco's network management products. The announcement came as the two companies marked the completion of 10 years of partnership.

Under the new partnership, HCL will be responsible for the engineering of Cisco's network management product and it is expected to realise the revenue through the IP it adds to Cisco's product.

The capability, scalability and knowledge were the key drivers for carrying out product development activities in India by Cisco, though costs were going up by 20 per cent a year, said Nadar. HCL's relationship with Cisco had moved from projects to products to revenue sharing, he added.

Cliff Meltzer, senior vice-president, Cisco, said that it would be a business partnership rather than engineering of product relationship. He added that the relationship was not just subcontracting, but it has much broader scope for product development to improve the quality and customer focus.

The Cisco offshore development centre in Chennai is the largest product engineering site for Cisco outside the US, a company release said.