Cisco Systems Inc.
) recently completed its acquisition of data-virtualization
start-up Composite Software for $180 million and retention-based
incentives. The deal is expected to close toward the end of the
first quarter of fiscal 2014.
San Mateo, Calif.-based Composite Software is a privately-held
data virtualization software company. It was founded in 2001 by
Michael R. Abbott. Composite's software brings together data from
traditional and new sources such as cloud and big data, offering
a consolidated view. This allows organizations to make better
decisions in real time.
Upon the completion of the deal, Composite will become part of
Cisco's Smart Services portfolio, augmenting Cisco's offerings to
service providers. Data virtualization is gaining importance as
it allows organizations to grow, take timely decisions to deploy
resources in a more optimal way and hence improve productivity.
Thus, the acquisition will provide Cisco the required leverage to
boost its data virtualization solutions.
Cisco Systems is a leading provider of IP-based networking
services and other products. As a part of its acquisition
strategy, Cisco bought 11 companies in 2012. In January, Cisco
spent $475 million to purchase Intucell, a company that develops
advanced self-optimizing network (SON) software to enable mobile
carriers to plan, configure, manage and optimize cellular
Further, it acquired cloud services management business
SolveDirect for an undisclosed amount. SolveDirect offers
cloud-based solutions for enterprises and service providers,
which help to streamline data and workflows across unified
We believe that these acquisitions will broaden Cisco's
customer base and network offerings, providing the company with a
significant competitive edge.
Cisco's revenues in the second quarter of fiscal 2013
increased 1.7% sequentially and 5.2% year over year to $12.1
billion. Products (78.0% of total revenue) were up 3.3% year over
year to $9.4 billion. Services (22.0% of total revenue) jumped
12.5% year over year to $2.7 billion.
Cisco carries a Zacks Rank #3 (Hold). Other companies in the
sector that also look attractive include
). While Infera Corp. and Silicom carry a Zacks Rank #2 (Buy),
Juniper carries a Zacks Rank #3 (Hold).
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