Cisco Agrees To Buy Vovida Networks, IPCell Technologies

Cisco Systems has long dreamed of a single, Internet Protocol-based communications network that will open the door to new developments in network applications, saving money for service providers and giving options to businesses. The networking giant plans to spend $369 million to expedite that vision as it agrees to buy Vovida Networks Inc. and IPCell Technologies Inc. Both privately held companies make technologies to combine data, voice, and video services over packet networks.

Vovida makes communications software used by service providers and carriers for voice, video, and data over IP, using an open-source system. IPCell brings to the table broadband network-access software that combines IP and telephony services, which helps move voice and data services over either IP or asynchronous transfer mode networks.

"This is fairly significant because it shows Cisco's commitment not just to building a next-generation IP infrastructure, but also building a voice-over IP network protocol," says Christin Flynn, a program manager with the Yankee Group. Flynn says that IPCell has an applications feature server that focuses on voice over IP for business, while Vovida brings the pure software component of next-generation protocols. Vovida also makes its software stacks available to developers so they can integrate the software into their own products. "It will give an enterprise user who's looking at packetized voice a whole new set of options," Flynn says.

Cisco had held a 21% stake in Vovida and a 17% stake in IPCell. The company expects the buy to be reported as a purchase in its second fiscal quarter of 2001, with an expected one-time charge of 2 cents per share.