Cisco snaps up high-end rival Procket

Just weeks after launching its new high-end routing platform, a system that took four years and $500 million to build, Cisco Systems Inc. spent $89 million to acquire a high-end routing competitor, Procket Networks Inc. of Milpitas, Calif.

In a carefully worded statement, San Jose, Calif.-based Cisco said it had agreed to purchase Procket's "intellectual property, a majority of the engineering team and select assets."

Company officials have said that Cisco would only acquire a rival to add talent and that it is committed to its new Carrier Routing System-1.

The CRS-1, launched in May and aimed at carrier-class network deployments, can scale up to 92 terabits per second and comes with 40 gigabit-per-second optical interfaces.

Analysts said Procket's $89 million price tag is a bargain. The company pulled in $300 million in venture funding based in part on its impressive braintrust of ex-Cisco and Sun Microsystems Inc. engineers. In January, Roland Arca, former chief technology office of Cisco's service provider group, was lured away to be Procket's chief executive officer.

Procket's routing technology, which is designed to shuttle network traffic through the high-speed core of the Internet, was well regarded for its performance, scalability and modular approach to router configuration. However, the company's products failed to gain acceptance outside academia and select international deployments.

In March, Procket's Marketing Director Cray Hayward told Washington Technology he was hopeful the Defense Department's decision to buy routers from Juniper Networks Inc., rather than market-leading Cisco, for its Global Information Grid Bandwidth Expansion project meant the government was open to new networking options. But the company never closed a deal with the U.S. government.

Procket's engineers will become part of Cisco's Routing Technology Group under senior vice presidents Prem Jain and Mike Volpi.

"The addition of Procket's engineering team offers a unique opportunity to accelerate development of silicon and software across Cisco's next generation routing portfolio," Volpi said in a statement.

The deal is expected to close in the first quarter of Cisco's fiscal 2005.