Cisco Systems to Buy Axioss Management Software to Aid in Convergence of Services and Networks

Cisco Systems has announced its first acquisition since revealing its strategy-overhaul plans this Spring. The company is buying AXIOSS from the UK subsidiary of Comptel.  The purpose of this purchase is to help Cisco’s customer base bring technology services, including video, data and cloud services, to market faster. 

The AXIOSS software will provide management capabilities for network services across Cisco’s five company priorities, and it will enhance Cisco Prime, which enables service providers to better manage their networks and network services.  

“As more users, connected mobile Internet devices and bandwidth intensive applications drive the explosive growth in IP-based networks, service providers continue to invest in their infrastructure to support customers’ needs,” said Jesper Andersen, senior vice president and general manager, Network Management Technology Group (NMTG), Cisco.  “With the acquisition of AXIOSS software and talent, we will help enable service providers to generate greater profits using a single management architecture to drive quick monetization and optimization of their Cisco network investments.”

Upon the close of the acquisition, the Axioss team will be integrated into the Cisco’s NMTG (Network Management Technology Group) and its Advanced Services Group. Gareth Senior- Comptel CTO and member of the Executive Board, will join Cisco. The services group “will offer implementation, customization and integration services”, and the new personnel will “bring strong software development and professional services skills,”  a Cisco spokesperson said.

Under the terms of the agreement, Cisco will pay approximately $31 million in cash to Comptel Corp. for the acquisition.  The acquisition is subject to various standard closing conditions and is expected to be completed in the third quarter of calendar year 2011.  Comptel Corp claims to be “the global market leader in convergent mediation and provisioning software solutions.”

AJW Comment:

Cisco was noted for the huge number of acquisitions it made in the mid to late 1990s.  Three of those acquisitions (Kalpana, Crescendo and Grand Junction) enabled the world’s leading router company to enter the Ethernet switch business, which it quickly took over.  Other acquisitions permitted Cisco to enter other networking market segments. The 1995 acquisition of Stratacom enabled Cisco to get into frame relay and ATM in the WAN.  But most other acquisitions failed badly (e.g. DSL, optical switching and transport, etc). 

Cisco’s largest acquisition this decade was in 2006, when it took over Scientific Atlanta.  That enabled Cisco to enter the Cable TV set top box business, which has not produced the expected revenues, profits or synergies with the rest of Cisco’s product line (especially home networking equipment it acquired through the Linksys acquisition).

While this is a much smaller acquisition than those in its glory heydays, this one is nonetheless important for Cisco to execute on its goal of integrating service management and fulfillment capabilities into Cisco Prime.

Addendum:  One day later, another article on this topic: