Cisco Is Paying $610 Million For This Networking Startup

The second acquisition of Cisco in the new year is another great.

The giant network said on Monday it expects to pay $ 610 million to start Viptela, which sells a network technology that allows companies to connect their branch offices to corporate data centers.

Viptela, founded in 2012 by ex-Cisco engineers (CSCO) has invested nearly 110 million dollars of investment. The start of the $ 75 million financing cycle in May 2016 earned him a pre-financing assessment of $ 825 million, according to the Pitchbook investment tracking site.

The latest Cisco transaction following the acquisition of $ 3.7 billion AppDynamics senior corporate software company that closed in March.

A Cisco spokesman said the company expects "most Vitpela employees" to join Cisco and "share more details in the coming weeks." Viptela has about 120 employees, according to Pitchbook.

In January, Praveen Akkiraju, a former Cisco fighter 19, senior vice president of its business networking group, became the new CEO of Viptela.

The acquisition is the fact that Cisco's core switching and routing activities gradually declined as new companies refuse to buy data center equipment and at the same time buy IT resources at the request of giants like Amazon web services (AMZN) and Microsoft (MSFT). To offset declines, Cisco has invested heavily in software through major acquisitions such as AppDynamics and the purchase of $ 635 million in OpenDNS 2015 security.

The acquisition of Cisco gives a vendor who sells much of its technology through AWS, which could help gain more customers using cloud services instead of buying data center equipment. Nearly 90% of Viptela customers use a version of their network technology provided by AWS, according to an article published in January in the specialized SDX central publication.

Competitors include other Viptela companies such as CloudGenix and Network Networks.

It is not clear if Cisco will keep the Viptela name. Cisco spokesman said "it is too early to make that decision."

The agreement must be completed in the second half of 2017.