Cisco buys companies to bolster voice-over-IP

Cisco entered into agreements Thursday to buy two networking software companies as
part of its move to provide integrated data, voice, and video services over a single IP-
based communications network. The total stock value of the two deals is set at about
$369 million.

Cisco is buying San Francisco-based communications software and network protocol
supplier Vovida Networks and Richardson, Texas-based IPCell Technologies. IPCell
provides software for combining IP (Internet Protocol) services and telephony services
over broadband networks. Cisco already had a minority interest in both Vovida and
IPCell.

Thursday's purchases improve the company's position in call-control technology. This
has become an increasingly important area as formerly circuit-switched services migrate
to the packet-switched network model. The call-control layer sits between the switch
and services networking layers.

"IPCell brings us call-control technology and an outstanding interface to the call-
control layer," said Alec Henderson, manager of marketing operations for Cisco's packet
telephony division in San Jose, Calif. "Vovida brings us software and technology at
several layers of the networking stack, including call-control technology."

Voice-over-IP technology is closely watched by not only telecommunications giants
but also corporate IT heads. It is no longer a "futuristic" technology, said Henderson.

"While there is still a ways to go, it is becoming generally recognized that voice
over IP is happening," he said.

The planned acquisitions are just the latest of a string of similar deals by Cisco.
Last month, the company made its 16th purchase of a networking company this year with
the acquisition of IPmobile for $425 million in stock.

Includes material form IDG News Service.