Cisco Buys BCN Systems

Startup's price tag could climb as high as $122 million if it hits certain milestones

December 10, 2004

2 Min Read
Cisco Buys BCN Systems

Cisco Systems Inc. (Nasdaq: CSCO) announced late Thursday that it is buying routing software startup BCN Systems Inc., the company it backed to develop next-generation routing software (see Cisco to Acquire BCN). It's not clear that BCN had any other corporate or venture capital investors.

BCN has been actively recruiting top routing talent from Juniper Networks Inc. (Nasdaq: JNPR) and other firms, according to sources familiar with the company (see BCN Joins Router Race). Cisco says it is paying $34 million for the part of BCN that it doesn't already own and that the price tag could climb to as much as $122 million if BCN meets certain goals.

BCN Systems is a provider of networking software design that has developed a unique networking software architecture for routing applications, Cisco says in a statement.

The company's interest in BCN was first disclosed in Cisco's September filings with the Securities and Exchange Commission (SEC).

BCN was founded in April 2004 and has 45 employees. It is led by founder and CEO Michael Beesley, a systems software expert who worked on mid-range routers at Cisco, contributing to products such as the 7200. He then moved to Juniper, where he was part of the team building the flagship M40 and also helped out on the high-end T640.

The startup's formation and acquisition is Cisco's third move of late to secure highly sought routing expertise. Recently the company converted routing software expert Tony Li from feared competitor to salaried employee (see Tony Li Returns to Cisco). And, earlier this year, Cisco moved beyond its tradition of not acquiring direct competitors when it nabbed the assets and employees of Procket Networks, the company Li founded (see Cisco to Pay $89M for Procket Assets).

— Phil Harvey, News Editor, Light Reading

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