Cisco Fills XML Processing Gap With Reactivity

Taking a step to boost its application network services, Cisco Systems  today agreed to purchase Reactivity, Inc., for $135 million in cash and assumed options.

Reactivity makes appliances that speed the way XML is processed on a network, a valuable tool at a time when an increasing amount of Web services , such as RSS feeds, wikis and other services leverage XML for more dynamic functionality.

Reactivity’s XML Gateways also keep XML data secure from enterprising attackers, performing deep XML message inspection, policy-based access control, encryption and threat defense.

Jayshree Ullal, senior vice president of Cisco’s Datacenter Switching and Security Technology Group (DSSTG), said in a statement the Reactivity appliances will be plugged into Cisco’s Application Networking Services (ANS) segment, where they will be paired with Cisco’s Application Control Engine (ACE).

ANS, which aims to provide customers more intelligent, “application-aware services” from the network platform, is part of the Service-Oriented Network Architecture (SONA) strategy the networking giant embarked on in June 2005.

ZapThink analyst Ronald Schmelzer said Reactivity would give Cisco robust security and policy management capabilities to the Cisco platform where it was sorely lacking.

“It seems that the AON platform movement hasn’t yet resulted in as much market traction as originally supposed, and so it’s possible that this acquisition can give Cisco the kick in the pants it needs to effectively take advantage of a growing opportunity for management of XML and Web services traffic,” Schmelzer said.

Should the transaction close in the third quarter as planned, Reactivity’s 56 employees and products will be integrated into DSSTG, reporting to Ullal.

Industry experts believe the ability to rapidly process and secure XML will be a key competitive differentiator for IT vendors who want to help business customers keep up with Web 2.0 services.

Market consolidation points to the trend.

Intel  bought Sarvega in August 2005 and Conformative Systems in February of last year. IBM , too, helped validate the XML processing market by purchasing DataPower.

“The addition of Reactivity to Cisco’s offerings goes a long way to signaling that we’re in the era of incumbents increasingly dominating the space once pioneered by the startups,” Schmelzer said.

The analyst said startups like Layer 7 Technologies, Forum Systems and companies such as Xambala and Tarari are “still making waves in the market” and could be an attractive addition to vendors contemplating a move into XML processing.