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Packet inspection/traffic management

SAIC Buys DPI Specialist

Science Applications International Corp. (SAIC) , the North American government services specialist best known in the telecom sector for being the former parent of Telcordia Technologies Inc. , has acquired deep packet inspection (DPI) specialist CloudShield Technologies Inc. for an undisclosed sum.

Cloudshield developed a high capacity data traffic management platform that it sells to telecom operators and governments worldwide. Its customers include KT Corp. , while its partners include Alcatel-Lucent (NYSE: ALU) and IBM Corp. (NYSE: IBM). (See Cloudshield Supports 10GigE, IBM Tempts Telcos, Secures BladeCenter, IP Traffic Smarts Hit Berlin, and AlcaLu, Cloudshield Partner.)

SAIC, which aims to complete the acquisition by mid-February, says the deal will enhance its "cybersecurity offering, and help the company bring to market DPI solutions for high speed networks, enabling it to meet emerging customer requirements in U.S. federal government and commercial markets."

Cloudshield raised about $70 million in backing, with its most recent round, of $15 million, led by Tektronix Inc. in September 2007. Other investors included ComVentures , TPG Growth, Foundation Capital , and Paladin Capital Group . (See Tektronix Helps Fund CloudShield .)

DPI is one of the hottest, and most contentious, sectors of the communications technology industry at present, but despite the sector's growth and importance, its specialist vendors are not yet generating significant revenues or profits. (See Sandvine Reports Full Year, DPI Vendors Eye Integration, Allot Reports Q3, Net Neutrality: Not Neutered, DPI Goes Mobile, NSN Denies Selling DPI to Iran, and Allot Intros DPI to Monetize Video.)

— Ray Le Maistre, International Managing Editor, Light Reading

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