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Cisco Buys Networking Software Maker for $175M
Cisco Buys Networking Software Maker for $175M
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
JUNE
17
2014



On Tuesday Cisco let the world know it plans to acquire a multi-vendor networking software maker that targets both traditional and virtualized networks. The tech titan is grabbing Sweden-based Tail-f Systems for about $175 million.

Tail-f’s products aim to help service providers and enterprise IT implement applications, network services and solutions across networking devices cost-effectively. The foreign firm’s tech also promises to reduce the time-to-market for network equipment vendors building equipment for agile, software-programmable networks.

Hilton Romanski, senior vice president for Cisco Corporate Development, pointed to one driver for the acquisition: a rapidly increasing number of people, devices, and sensors connecting across the Internet of Everything. That rapid increase, in turn, demands service providers adopt new solutions to deliver value-added, cloud-based services and applications.

“Our goal is to help to eliminate the bottleneck caused by operational complexity within the network,” Romanski said. He is convinced the acquisition will extend Cisco’s capabilities in network function virtualization and “help service providers reduce operating costs and the time it takes to deploy new services.” In other words, he’s selling the idea that adding this technology will make “agile service provisioning a reality.”

How T-fail Fits In

Cisco has done study after study showing network traffic volume is surging. Video alone is putting a strain on infrastructures. From the networking giant’s perspective, those volumes, along with sprawling infrastructures, have made managing service provider networks more expensive and complex. Meanwhile, rising competition is pushing service providers to roll out new services at rapid rates. Cisco said its customers are looking for it to provide solutions.

Tail-f is part of the answer. Indeed, the tech buy drives forward Cisco’s cloud virtualization strategy of delivering software that increases value to customers’ applications and services. It’s also in line with Cisco’s commitment to open standards, architectures, and multi-vendor environments.

According to the company, Tail-f’s solutions apply equally to modern network challenges -- such as layer 2 or layer 3 VPN provisioning -- and next-generation networking based on network function virtualization and network programmability. When the acquisition is complete later this year, Tail-f employees will join Cisco’s Cloud and Virtualization Group led by Gee Rittenhouse, vice president and general manager.

Solving Operational Problems

We caught up with Zeus Kerravala, principal analyst at ZK Research, to get his take on Cisco’s latest foreign acquisition. He told us in some ways this buy shows Cisco is admitting the world is going multi-vendor -- and most software defined network (SDN) implementations will lean that direction.

“In a lot of ways the competitive positioning of vendors is going to be based on their ability to automate and orchestrate different SDN components and that’s what Tail-f does,” Kerravala said. As he sees it, the Tail-f buy gives Cisco a means to address the operational problems with SDN within organizations.

“The industry has been focused a lot on cheaper hardware and other things that frankly I’m not sure matter as much as trying to solve operational problems,” Kerravala said. “Provisioning servers in large multi-vendor environments is very difficult. I think Tail-f gives Cisco a great platform to try to solve that problem.”

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