Cisco Systems Inc.’s (Nasdaq: CSCO) latest acquisition has kicked up controversy at a technology standards body meeting this week in Portland, Oregon.

On Wednesday, the company announced the $150 million acquisition of AuroraNetics Inc. (see Cisco Buys 10-Gig Chip Maker), a 40-person semiconductor company that is developing a chipset for resilient packet rings (RPRs), a technology that allows data packet protocols like IP to work without sacrificing important resiliency and protection features of Sonet (see IEEE Tunes Ethernet for Telcos), a standard technology in most telecom networks.

Competitors expressed alarm that Cisco has scooped up a key supplier in the emerging market for RPR technology, because it may aid the data-networking giant in shaping the future of the standard. RPR technology is considered important because it will help enterprise data-networking technologies, such as Ethernet, be adopted in telecom networks.

“There are a lot of people expressing disappointment,” says Raj Sharma, director of product management for Luminous Networks Inc., a company also working on the RPR standard. “It makes it pretty hard to compromise with them now.”

The acquisition was announced in the middle of the Institute of Electrical and Electronics Engineers Inc. (IEEE) week-long meeting, at which representatives from different companies gathered in an effort to develop a standard for implementing RPR technology.

For over a year, Cisco has lobbied for its implementation of RPR called Spatial Reuse Protocol (SRP), a derivative of its early implementation called Dynamic Packet Transport (DPT), to be the basis for the standard. But companies involved in the working group charge that SRP has serious problems and is too limited in scope to be the foundation of the RPR standard. Cisco has been adamant about its own implementation and hasn’t publicly admitted that SRP has any problems.

AuroraNetics put an interesting twist on things. The semiconductor company has taken a gamble and started developing technology enhancements to SRP before any standards activity had even gotten into full swing. Two of its competitors already license Cisco’s existing SRP/DPT technology: Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC) and Mindspeed Technologies. But others, such as Broadcom Corp. (Nasdaq: BRCM) and Vitesse Semiconductor Corp. (Nasdaq: VTSS), have taken a more conservative approach and seem to be waiting for the standard to get further along (see Cisco's Resilient Ring Gets a Boost and AMCC, Cisco Team on RPR Development).

The AuroraNetics enhancements to SRP had been a welcome change, says Sharma. For one, the company added a third class of service to the protocol, which originally had only two. This is an important improvement, given that IP QOS (quality of service) standards call for a minimum of eight priority classes. While adding only one more class hasn’t completely solved the problem, it's a start.

Cisco’s competitors in the working group hoped that AuroraNetics, an independent third party, could help push Cisco to improve its proposal and put it more in line with what others were working on. Now they worry that Cisco's purchase of the company will slow or stop that progress.

"If AuroraNetics had been left on their own, they would have evolved the technology and made it into a completely different animal,” says Sharma. "They were really the ones pushing Cisco to admit that SRP had problems."

In the past few months, Cisco had agreed to revise SRP. This was a big step for several reasons. For one, the changes to the proposal would make the new protocol incompatible with chipsets Cisco had already implemented in some of its products. Secondly, it was the first time that Cisco admitted SRP had problems. All of this was a good sign to smaller system companies that Cisco was willing to work and compromise for the good of the standard.

Now that Cisco will own the AuroraNetics intellectual property, the rest of the members of the RPR working group feel that Cisco will be less likely to compromise and work to improve the SRP proposal.

Some system vendors were also planning to use the chipsets developed by AuroraNetics, but, as one disgruntled CTO remarked at the meeting: “They are now are going to be forced to license the technology from Cisco."

Those attending the meeting this week are also baffled that Cisco would announce the deal in the middle of the conference. This puts Mike Takefman, a Cisco employee who is chairman of the working group, in a difficult situation.

But some people in the industry say that Cisco conspiracy theories may be overblown. David Newman, president of Network Test Inc., points out that Cisco has always been very active in the standards community and that its actions are often misinterpreted by its competitors.

"No vendor with the exception of IBM Corp. [NYSE: IBM], has been more of an advocate for open standards than Cisco," he says. "Have they tried to forward the Cisco way through standards? Absolutely, yes. But so has every one of its competitors."Cisco had not returned phone calls by press time.

- Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com