Cisco to acquire P-Cube for US$200 million

Cisco Systems Inc. said Monday it has agreed to acquire Sunnyvale, Calif., software developer P-Cube Inc. in a cash-and-options deal Cisco valued at US$200 million.

P-Cube makes software to help service providers analyze and control network traffic. Cisco, in San Jose, plans to continue selling P-Cube’s software as stand-alone products for the foreseeable future. It will also work on incorporating the technology into its own hardware and software, according to Pankaj Patel, general manager of Cisco’s broadband edge and midrange routing business unit.

Patel estimates it will be at least nine months before Cisco completes its software integration, and a year before it has its hardware integrated with P-Cube’s technology. In the meantime, Cisco will immediately add the software to its sales portfolio and begin developing service packages around it, Patel said. Cisco hopes to use the technology to encourage providers to offer more advanced services, such as voice over IP (VoIP), gaming, video on demand and peer-to-peer offerings. Such services can be monitored and metered with P-Cube’s software.

Five-year-old P-Cube has 118 employees, the majority of whom will be offered positions at Cisco, according to a Cisco spokesperson. The acquisition is expected to close during the first quarter of Cisco’s 2005 fiscal year, which ends Oct. 31.

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