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Summary:

It has been a few years since Cisco Systems (CSCO) outlined a vision for what the San Jose based company calls Applications-Oriented Networking or AON. Think of it as Cisco-twist on Services Oriented Architecture! Like optical, high performance routing, storage and consumer, AON has been identified […]

It has been a few years since Cisco Systems (CSCO) outlined a vision for what the San Jose based company calls Applications-Oriented Networking or AON. Think of it as Cisco-twist on Services Oriented Architecture! Like optical, high performance routing, storage and consumer, AON has been identified by CEO John Chambers as an area of strategic importance and future growth.

Chambers & Company have argued that the applications and network infrastructure have to be highly enmeshed to deliver performance needed by the future enterprise. It is hard to tell how much money this initiative is bringing in, but it is clear the company is pretty serious, and seems to buy start-ups to bolster this business.

Today, the router maker announced that it is buying Redwood City, Calif.-based XML gateway maker Reactivity for $135 million.


The deal is a setback for F5 Networks, which has been a strong partner for Reactivity. No such problems for Reactivity’s backers like Accel Partners and Diamondhead Ventures – they are laughing all the way to the bank.

This is the third company Cisco has acquired in 2007. It acquired Ironport Systems, a messaging-security company for $830 million in January, and more recently picked up Five Across, a CMS maker for a rumored $30 million. (That’s a billion dollar buying binge already and we are not even out of February. VCs, investment bankers and law firms rejoice, Cisco has a check book wide open.)

“Reactivity together with our Application Control Engine (ACE) provides a highly capable solution for customers’ application delivery needs in the data center,” said Jayshree Ullal, Senior Vice President, Datacenter Switching and Security Technology Group (DSSTG), about the Reactivity acquisition. Though not as recent, the May 2005 acquisition of FineGround Networks, an application acceleration device maker can be lumped in the AON related deals.

The big question is if this deal is going to lead to more XML/SOA related M&As in the near future. Who else could get bought or who could go on a prowl? Thoughts?

  1. Smart move from CISCO, but they are a little late to the game. Intel snaped up Sarvega ages ago, and IBM bought Datapower which it has now bundled into the Websphere name.

    Layer 7 seem to be available, but then they just build on Tarari supplied hardware, so perhapse they would be a better buy for someone looking to get into the SOA hardware business.

    What IBM have done is very interesting, buy/build all the components from hardware through middleware and to management/development software for the whole end-to-end SOA system. I would look to AmberPoint being involved in a big M&A soon, although I couldn’t think from which side :)

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  2. Congratulations to Reactivity…

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  3. Smart move by Cisco! There are all indications that the market for such devices will really open up – especially as more and more organizations embrace the SOA wave and SOA/ESB infrastructure gets built out, one service at a time. SOA practitioners would be more than happy to hand off some of those XML crunching to the boxes rather than write software for it. As a poster observed earlier, IBM is quite strong in this space – but Cisco has enormous clout amongst the “infratrsucture heads” which alone should make it a strong competitor.

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  4. Wonder how Cisco will position it’s AON product with this reactivity announcement. AS AON was supposed to lead Cisco into the Application Oriented Networking world.
    Possibly hedging it’s bets..

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  5. Then They Were Fewer…

    The market seems to have realized that XML security is important. Intel bought Sarvega, then IBM got its Data Power and now TMC reported Cisco Systems Inc., a leading supplier of Internet network equipment, has announced its intention to acquire Reacti…

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  6. Forum Systems is still out there, but the rumor mill says it may be snatched up by someone else in the XML space.

    Cisco’s AON is rumored to be dead. I suspect that either Reactivity will eventually replace Cisco’s homegrown AON in its SONA initiative or that like it’s ArrowPoint acquisition back in the day that Reactivity will stand side-by-side with AON and confuse the heck out of Cisco’s customers.

    Local Director? CSM? ACE? Three lines, three feature sets, three products, one market. Cisco needs to consolidate internally instead of trying to play IBM. It can pretend its a software company all it wants, and can message that to the press, but its a hardware company and I don’t believe that fragmentation is good for itself, its customers or the market in general.

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