Cisco Systems Inc. (Nasdaq: CSCO) leapt into the policy management market with both feet today by striking an OEM deal to rebadge technology from policy control specialist Tazz Networks Inc. (See Cisco Rebadges Tazz.)

The arrangement won't cause any major shocks, as the two companies already have a close working relationship, most notably at BT Group plc (NYSE: BT; London: BTA), where Tazz is one of Cisco's partners in the metro nodes of the carrier's next-generation network, the 21CN. (See BT's 21CN: Metro Partners Under Wraps .)

But the deal is significant for two reasons. It gives Cisco a position in one of the hottest emerging technology areas, policy management, which will become increasingly vital to service providers seeking to effectively, and profitably, manage the delivery of multiple IP services to broadband customers. (See Policy Control Heats Up.)

Cisco is calling its product the Broadband Policy Manager, or Cisco BPM.

The move gives the IP equipment giant an instant policy management story, something that some of its key rivals such as Alcatel (NYSE: ALA; Paris: CGEP:PA) and Redback Networks Inc. , but particularly Juniper Networks Inc. (NYSE: JNPR) with its SDX-300 (a Unisphere product), already have in their marketing arsenals. (See Alcatel Launches Service Manager, Redback Intros Policy Manager, and Juniper Boosts IPTV.)

Cisco says only that Tazz's technology is "a component of the Cisco Broadband Policy Manager" that is "designed to enable deployment of advanced applications over IP Next Generation Networks." In an email response to a request for comment, Cisco added: "Tazz is one of many Cisco OEM partners contributing to the development of the Cisco IP Next Generation Network Architecture."

The arrangement also gives Tazz, a small specialist that has been developing systems in this field for some years, a major foot in carriers' doors, market credibility, and, reckons the company, the potential for greater insight into operators' plans.

"For Tazz, this will open a lot of Tier 1 doors we couldn't have opened ourselves, and we expect to see customers and revenues from this relationship very soon," says Tazz VP of marketing Chad Dunn. "It'll also give us visibility into the carriers' roadmaps and the way they see certain standards and strategies, and allows us to adjust our future product development accordingly."

That upswing in business opportunities also means Tazz will need to raise further working capital: Dunn says the company, which has been growing fast recently, will "be going out to raise more money later this quarter." Its most recent funding round was in May 2005. (See Tazz Pockets Another $6M, Tazz Adds VPs, and Tazz Goes to Scotland.)

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