Cisco Systems Inc.
) announced its intention to buy a Denver-based policy management
solutions provider BroadHop Inc., last week. The terms of the
deal were not disclosed.
BroadHop provides policy control and service management
technology for carrier networks worldwide. The company's services
are used by some 90 telecom service providers serving 500 million
subscribers in 40 countries.
Upon the completion of the deal, BroadHop will become a part
of Cisco's Service Provider Mobility Group unit, augmenting
Cisco's offering to service providers. The integration of
BroadHop policy control and network software will add value to
its services by providing more flexibility to control, monetize
and customize the types of service they choose on any
The deal will further Cisco's strategy of increasing its
software-centric solutions to streamline network management. The
BroadHop acquisition will allow the company to expand and
differentiate its offerings with regard to networking
infrastructure. Additionally, the deal supports Cisco's Open
Network Environment (ONE) strategy, also known as Cisco ONE,
which aims to help businesses increase infrastructure agility,
simplify operations and instill greater application visibility
Cisco Systems is a leading provider of IP-based networking and
other products. Although Cisco is taking steps to lower its cost
structure by reducing headcount, it is not ignoring growth
Cisco is on an acquisition spree and as a part of its
expansion strategy it has made quite a few acquisitions this
year. Last month, Cisco acquired Meraki, Cloupia and Cariden for
$1.2 billion, $125 million, and $141million, respectively, as
part of its cloud and networking expansion strategy. The
company's first-quarter earnings of 44 cents beat the Zacks
Consensus Estimate by 3 cents. Reported revenue was up 5.5% from
the year-ago quarter.
We believe that these acquisitions will broaden Cisco's
customer base and network offerings, providing the company with a
significant competitive edge over its peers, namely
Juniper Networks, Inc
F5 Networks, Inc
), which have been picking up market share.
Currently, Cisco has a Zacks #2 Rank (Buy).
CISCO SYSTEMS (CSCO): Free Stock Analysis
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