Cisco acquires Acacia Communication

Network gear maker Cisco Systems Inc. said it would buy optical component maker Acacia Communications Inc. for $2.84 Billion in cash, as it seeks to garner a bigger chunk of 5G spending by telecom companies.

Globally, mobile networks would need higher-capacity optical interfaces to handle a surge of data when high-speed the fifth-generation network comes online in the next few years. The acquisition will bolster Cisco's technology for service providers upgrading to 5G and put its optical portfolio ahead of the shift toward using plug and play devices across various communication segments.

According to Cisco's Visual Networking Index, global internet traffic is projected to more than triple to 13.2 exabytes per day in 2022 from 4.1 exabytes per day in 2017. "Cisco's optical portfolio was mainly for short-range data center connections, and now gains Acacia's skill set in areas such as metro, long-haul, and undersea.

Revenue in Cisco's infrastructure platform business, which includes switches and routers, rose 5% to $7.55 billion in its third quarter. That business is expected to get a boost from 5G communication networks. The deal is Cisco's biggest since its $3.7 billion purchase of business performance monitoring software company AppDynamics in 2017.

Cisco to buy cyber security firm Duo

Cisco systems Inc. will buy Duo Security, a venture capital backed cyber security company for $2.5 Billion in cash, as it seeks to expand its offerings in cloud computing.

The deal is the biggest acquisition for Cisco since its $3.7 billion purchase of business performance monitoring software company AppDynamics last year, and it’s largest in the cyber security sector since its $2.7 billion takeover of Sourcefire in 2013.

Duo’s platform allows users to verify their identity with a two-step authentication and its investors include Index Ventures, Workday, Redpoint Ventures and True Ventures. Cisco, the world’s largest networking gear maker, has been making efforts to transform itself into a software-focused company.

With its traditional business of making switches and routers struggling, Cisco has been focusing on high-growth areas such as security, the Internet of Things and cloud computing.

Cisco to buy AppDynamics

Cisco Systems Inc. has agreed to buy AppDynamics, a US technology firm for $3.7 Billion. AppDynamics was to go public and was expected to be valued at around $1.9 billion, before it was bagged by Cisco at almost double the valuation. 

This makes it one of its largest deals in recent years as Cisco searches for growth beyond its core networking business. This is Cisco's largest acquisition since it bought security company Sourcefire for $2.7 billion in 2013. Legacy technology players like Cisco have been trying to shift their strategy to stay ahead of technology developments, such as the rise of cloud computing, that could otherwise threaten their core businesses.

AppDynamics makes software that manages and analyses applications and it has about 2,000 paying customers, including NASDAQ Inc. Nike Inc. and its new owner, Cisco. AppDynamics, a company that helps organizations monitor applications and find meaning in data, a decade ago. In the nine years since, AppDynamics grew from that initial dream to a successful technology company that today is a strategic software vendor for the world’s largest enterprises. AppDynamics will become part of Cisco's Internet of Things and Applications Unit. Cisco's last large acquisition, Jasper, is also part of that unit.