Cisco to acquire service control company P-Cube

Cisco Systems will add approximately $200 million worth of service intelligence capabilities to its service provider efforts through the acquisition of Sunnyvale, Calif.-based P-Cube, which the companies announced this week.

The cash and options deal is expected to close in Cisco’s first fiscal quarter of 2005. Upon closing, P-Cube will become part of Cisco’s Broadband Edge and Midrange Routing Business, led by Pankaj Patel, vice president and general manager of the group.

It is unclear how many of P-Cube’s 118 employees will be retained. A company spokeswoman said, "The Cisco acquisition strategy includes not only obtaining advanced technology and solutions, but acquiring talent as well--management, engineering and marketing."

P-Cube is the third company that co-founder, president and CEO Yuval Shahar has had a hand in developing and then selling to Cisco. He co-founded Pentacom, a pioneer in dynamic packet transport products and also led the creation of Infogear, which developed some of the industry's first Web appliances. Yuval also served as vice president of research and development at VocalTec, a pioneering company in VoIP.

"The P-Cube acquisition compliments a number of ongoing initiatives within Cisco targeted at growing service providers’ ability to increase revenue per subscriber and lower overall operational expenses," said the Cisco spokeswoman.

Cisco will use P-Cube technology to target DSL and cable operators looking to manage the rollout of advanced broadband services, such as VoIP and gaming. The P-Cube Service Control Platform helps service providers analyze, control and meter applications and content-based services by creating an intelligent overlay for IP networks that can differentiate between services such as video-on-demand, Web browsing, e-mail, music streaming, voice-over-IP and P2P traffic.

Cisco has no plans to make P-Cube’s service control platform part of its IOS software solutions. It will continue to sell and support the product on its own.

"A critical part of the Cisco service convergence strategy is to ensure that P-Cube technology is leveraged across a variety of Cisco platforms and markets. The strategy for how this integration will take place is still being defined," said the spokeswoman.