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Cisco To Buy Qeyton For $800 Million

Light Reading
News Analysis
Light Reading
5/12/2000

Cisco Systems Inc. http://www.cisco.com today announced an agreement to acquire Qeyton Systems AB http://www.qeyton.com, a Swedish startup developing access and metro DWDM equipment, for $800 million in Cisco stock.

The deal makes a lot of sense for Cisco and Qeyton, in that Qeyton has some interesting DWDM gear targeting access and metro core networks, but is playing catch-up with Adva AG Optical Networking http://www.advaoptical.com, a German vendor already shipping equipment in this market segment. Cisco's formidable marketing machine now promises to give Qeyton a big advantage over Adva.

Cisco's acquisition of Qeyton is bad news for Adva on a second front as well, in that Cisco will probably stop reselling Adva equipment, as it has in the past.

Brian L. Protiva, Adva's Chief Strategy Officer, says this may not happen, because Cisco is only selling Adva's enterprise products. It's not selling its access and metro products. But Rob Batchellor, vice president of technical marketing at Qeyton, says his company's products could also be used in enterprise markets.

Now that Qeyton has got Cisco behind it, Adva might be forced to develop stronger ties with a heavyweight partner itself. The obvious candidate is Alcatel SA http://www.alcatel.com, which already resells Adva gear.

Adva is already a public company. Its shares are traded on Neuer Markt of the Frankfurt Stock Exchange, under the ticker symbol of ADV.

Readers of Light Reading got early warning of Cisco's acquisition of Qeyton when we reported rumors to this effect in late March. See Cisco To Buy Qeyton?.

By Peter Heywood, international editor Light Reading, http://www.lightreading.com

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