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Cisco to Acquire Reactivity for $135 Million
[February 21, 2007]

Cisco to Acquire Reactivity for $135 Million

TMCnet Contributing Editor
Cisco Systems (News - Alert) Inc., a leading supplier of Internet network equipment, has announced its intention to acquire Reactivity Inc., a provider of gateway solutions that simplify web services management. The agreement, which is subject to the standard closing conditions, states that Cisco will pay $135 million and assumed options of Reactivity.

Reactivity XML gateway products assist companies in dealing with the increasing web services and XML traffic. Telecommunication companies have acknowledged the importance of XML processing in boosting their network performance by implementing more XML and web services in their service infrastructure.

Cisco aims to better meet the needs of its Application Networking Services customers through this acquisition. Reactivity’s products will enable Cisco customers to efficiently secure, deploy and accelerate their XML and web services. Reactivity’s capability to deliver emerging application architectures fits well with Cisco’s commitment to improve its shared application-aware services, in terms of performance, availability and security.

“Customers continue to validate our on-going strategy of building more application services on the network platform,” said Jayshree Ullal, senior vice president of Cisco’s Datacenter Switching and Security Technology Group (DSSTG), in a press release. “Reactivity, together with our Application Control Engine (ACE), provides a highly capable solution for customers’ application delivery needs in the data center.”

As of late, Cisco has been acquiring companies to advance its position in the telecommunication industry. In 2003 it acquired Linksys (News - Alert), a global leader in wireless and Ethernet networking for SOHO users. Last year Cisco closed a $6.9 billion deal to acquire Scientific-Atlanta (News - Alert), a PVR manufacturer. The company also bought Kiss Technology, a leading technology provider for networked entertainment devices, for $61 million. These acquisitions have brought Cisco sophisticated communications equipment which enables phone and cable companies to deliver new services.

Chris Stevens, vice president and general manager for Cisco’s Linksys home networking division, is excited about the recent acquisitions.

“If you want to figure out where we are going, just look at the building blocks we are already assembling,” he said. “The elements we already have in the portfolio provide us key capabilities that fit into an end-to-end solution.”

The deal is expected to close in the third quarter of Cisco’s fiscal year 2007, ending April 28, 2007

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Beverly Maniago is a contributing editor for TMCnet. To see more of her articles, please visit her columnist page.

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