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Optical/IP

Cisco to Buy VOIP Apps Firms

Cisco Systems Inc. (Nasdaq: CSCO) is beefing up its VOIP applications development capabilities with the acquisition of two specialist firms for a combined $47.8 million. (See Cisco Buys Metreos, Audium.)

The IP giant has agreed to pay $28 million for Austin, Texas-based Metreos Corp. and $19.8 million for New York City-based Audium Corp. Cisco expects the deals to close by the end of its financial year (July 29).

Founded in 2001, Metreos has developed a number of VOIP applications, such as click-to-talk and speech recognition, and a VOIP applications development platform that enables developers to create and manage their own IP telephony applications. Its technology is already used by the likes of systems integrator BearingPoint Inc. (NYSE: BE) , mobile phone maker Sony Ericsson Mobile Communications , and finance giant Lehman Brothers .

Metreos, which has 19 on staff, is an existing Cisco partner and raised $3.8 million in its Series A funding round back in November 2004.

Audium, founded in 1999, has developed VoiceXML-based interactive voice response (IVR) systems that are used in customer contact centers. Like Metreos it provides a drag-and-drop development and integration platform as well as ready-to-use applications. Its customers include AT&T Inc. (NYSE: T), Convergys Corp. (NYSE: CVG), eBay Inc. (Nasdaq: EBAY), and Vodafone Group plc (NYSE: VOD).

The company's funding history is unclear, though at one time it received a loan and equity investment from Fonix Corp. . Audium has 26 employees.

Cisco says both companies will become part of its Voice Technology group and strengthen its Unified Communications system, which aims to help companies integrate their communications applications, including voice and video, with their networks. The Unified Communications system is a key part of Cisco's Service Oriented Network Architecture (SONA) strategy announced last December. (See Cisco Everywhere: Meet SONA.)

The ability to help enterprises integrate their applications and infrastructure is set to become a major battlefield as companies and their service providers shift towards converged IP networks, with the likes of Cisco, Microsoft Corp. (Nasdaq: MSFT), IBM Corp. (NYSE: IBM), and traditional telecom voice equipment suppliers, such as Alcatel (NYSE: ALA; Paris: CGEP:PA), Nortel Networks Ltd. , and Siemens Communications Group , vying for corporate customers' business. (See Can VOIP Unify the Enterprise?)

— Ray Le Maistre, International News Editor, Light Reading

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