Cisco to buy Procket assets

Cisco is acquiring certain assets and intellectual property from router start-up Procket Networks for about $80 million, sources say.

Cisco was an initial investor in five-year-old Procket, which prides itself on its silicon design and modular software. The company unveiled two carrier-class routers a year ago and planned to port its technology to other platforms -- blade servers and low-end routers -- through licensing arrangements.

Procket garnered 2%, or $5 million, of the 10G bit/sec core router market in the first quarter of 2004, according to Dell'Oro Group.

Procket has raised close to $300 million since it founding in 1999.

Cisco will use the Procket technology to refresh a range of edge, mid-range and high-end router platforms between its 7200 series systems and the CRS-1 core router unveiled three weeks ago, sources say. Cisco may announce the deal as early as Monday, they say.

Cisco declined to comment on "rumor and speculation."

If it happens, the Procket deal casts into question the longevity of the programmable processor and modular software technology Cisco unveiled with the CRS-1. At that announcement on May 25, Cisco made a lot of pronouncements about how the $500 million, four-year investment in CRS-1 development heralded a new era for Cisco as a technology innovator vs. acquirer.

But $80 million for a company that raised almost $300 million through its silicon and software innovation is too good to pass up, sources speculated about Cisco's rationale for the purchase.

A Procket spokesman wouldn't comment, saying, "We have a policy that we do not comment on rumors."

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