RealTime IT News

Cisco Spends $47.8 Million on Comm Startups

Cisco Systems agreed to acquire application development startups Metreos Corp. and Audium Corp. in separate deals for a total of $47.8 million in cash.

The purchase bids are intended to add drag-and-drop application development environments to Cisco's Unified Communications system, which allows business customers to combine their communications systems with their IT infrastructure.

Cisco said in a statement it will pay $28 million for Austin, Texas-based Metreos, which makes IP communication application development and management environments.

The purchase will help Cisco's technology partners, systems integrators, resellers and customers build applications on Cisco's Unified Communications system.

The networking giant will pay $19.8 million for New York's Audium, which develops VoiceXML speech self-service application development and management environments.

Audium's software helps companies build automated voice response applications that are integrated with their converged IP networks and SOA.

Upon close of the transaction, Metreos and Audium products and staff will be integrated into the Voice Technology Group, reporting to Don Proctor, senior vice president of Cisco's Voice Technology Group, according to the statement.

Based on Cisco's service-oriented network architecture (SONA) for integrating network infrastructure services, interactive services, and applications across a business, the Cisco Unified Communications system is essentially the embodiment of the IP Multimedia Subsystem (IMS).

IMS , a kind of service-oriented architecture (SOA) for the communications world, is an increasingly popular approach for making voice, video data and wireless products and applications interoperate and work with any device on a computer network.

Communications experts believe IMS will be a multi-billion-dollar market for years to come as corporations scramble to meld their communications gear with IT infrastructure.

Embracing IMS is another way for Cisco to broaden its portfolio to stave off stagnant, traditional networking gear sales and pace the competition.

Rivals Nortel, Alcatel and Juniper Networks are all building or acquiring their own IMS portfolios.

The proposed deals come a day after Cisco CEO John Chambers was tabbed to succeed John P. Morgridge as chairman at the company's annual shareholder meeting on Nov. 15, 2006.

The appointment is a reward for growing the company from $1.2 billion in annual sales from when he joined the company in 1991 to some $24.8 billion in 2005, with market cap growth from $10.4 billion in 1995 to its current $121 billion.

Chambers will remain CEO after taking the chair.