Cisco makes another optical acquisition

Network giant plans to purchase, CoreOptics, a designer of digital signal processing technology for optical networking applications, for $US99 million in cash.

Cisco announced plans to acquire privately held CoreOptics, a designer of digital signal processing technology for optical networking applications, for $US99 million in cash.

The acquisition of CoreOptics is Cisco's second this week. Earlier, Cisco said it will acquire privately held Moto Development Group, a consumer product design and development consultancy, for an undisclosed sum.

CoreOptics will bring to Cisco expertise in digital ASIC design, advanced modulation formats, as well as optical systems, applications and network architecture. Cisco says CoreOptics will enable it to provide "highly advanced" 100Gbps transmission technology to service providers for supporting IP-based video, mobility and cloud services.

Citing its own research, Cisco believes global IP traffic will increase fivefold from 2008 to 2013 with a 40% compound annual growth rate.

Cisco says the next phase of optical networking innovation will be sophisticated modulation formats and advanced DSP technologies to enable efficient transmission of large amounts of data over existing fiber optics. This will allow service providers to manage capital expenditures by accommodating growth in network traffic over existing infrastructure, the company says.

CoreOptics is based in San Jose, but a majority of its employees are in Nuremberg and Gerlingen, Germany. Upon completion of the acquisition, CoreOptics employees will become part of the Cisco Service Provider Technology Group and work with Cisco's existing optical engineering teams in Monza, Italy; Bangalore, India; and Richardson, Texas.

In addition to the $99 million in cash, Cisco will pay retention-based incentives in exchange for all shares of CoreOptics. The acquisition is expected to close in the second half of calendar year 2010.

Cisco's track record in acquiring optical networking companies is spotty. In 1999, the company paid $7.4 billion for Cerent, a maker of metropolitan networking transmission gear, and Monterey Networks, a maker of optical switches. Cisco killed the Monterey product in 2001 and has steadily lost share and expertise in optical multiservice SONET/SDH provisioning platforms (MSPP), a $6 billion market where the Cerent platform competes.

Cisco also acquired Pirelli Systems in 1999 for long haul and extended long haul dense wavelength division multiplexing transport. That product line -- the ONS 15808 -- is still offered, according to a Cisco spokesperson.

While stating that its intent with most acquisitions is to capture a market in transition and attain a No. 1 or 2 share position, Cisco is No. 10 in the MSPP market, according to Dell'Oro Group. However, Infonetics Research notes that Cisco and Fujitsu posted large first quarter market share gains in the packet-optical market segment, presumably the area the CoreOptics technology will address.

Tags NetworkingciscoMergers and acquisitions

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jim Duffy

Network World

Comments

Comments are now closed.

Most Popular Reviews

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest News Articles

Resources

Best Deals on GoodGearGuide

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?