Cisco/Procket Deal Imminent

Sources say Cisco will announce its intent to acquire Procket tonight

June 16, 2004

2 Min Read
Cisco/Procket Deal Imminent

Today's the big day for news on whether Procket will be acquired, say several sources.

Two sources close to Procket Networks Inc. have told Light Reading that the company's fate will be made today. As ever, there's intrigue here because only one of the two sources would name the acquiring party -- and that source says its Cisco Systems Inc. (Nasdaq: CSCO). Foundry Networks Inc. (Nasdaq: FDRY) has also been mentioned as a suitor, but that now appears less likely -- and Cisco certainly has the deeper wallet to make the deal happen.

The deal, reportedly worth $80 million, has been expected this week since a flurry of reports detailing a potential deal dropped last week (see Cisco May Pocket Procket).

Cisco has since put forth that, while it would never buy a competing product, it doesn't mind acquiring the talent that built the competing product. "I'm not going to buy another router company for a router," Chambers told a Bear Stearns investment conference yesterday, according to reports by Reuters and The Wall Street Journal. "I could not be more comfortable with our routing strategy...

"Fifty really sharp engineers can bring a product to market quicker than 500 can, so if ever there is a talent acquisition that makes sense to me in the market, I don't hesitate," Chambers added, according the Reuters report.

However it's sliced, Cisco is about to purchase one of the routing upstarts that, if nothing else, provided a catalyst for Cisco to get its own next-generation core router, the CRS-1, built and released after several years of fits and starts (see Cisco Unveils the HFR).

While it will be interesting to see what Cisco will do with the technology, it will be more interesting to watch the marketing story unfold. Never before has a routing market leader announced its own next-generation product, then purchased a competitor solely for staffing reasons.

Calls to Cisco were not returned in time for this article.

— Phil Harvey, News Editor, Light Reading

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like