Cisco acquires router startup

Rethink IT, Jan, 2005

Cisco has acquired a router startup, BCN Systems, which it had previously funded to bolster its defenses against Juniper in the flat enterprise routing sector

The giant made an investment in BCN, a California company staffed with ex-Cisco and ex-Juniper routing and switching engineers, in October.

"The company has the right, but not the obligation, to acquire the portion of BCN it does not own, with such purchase dependent upon the company's sole determination as to whether certain technical conditions have been met," the document states. "The aggregate total purchase value of BCN could range from approximately $45m to approximately $195m depending upon the achievement of certain milestones, including those that would be determinable only after closing," said Cisco's 10-Q filing with the SEC.

Some analysts believe BCN is developing a new range of edge routers for Cisco.

"We believe BCN is developing next generation enterprise/service provider edge routers to replace the 7600 and/or 10000 series at Cisco," state Nikos Theodosopoulos in a recent bulletin on Juniper's third quarter results. This was mentioned in the Juniper bulletin as an example where Cisco and Juniper are poaching each other's talent to develop competing products.

The founder and CEO of BCN is Michael Beesley, who was the lead engineer on several mid-range routers at Cisco before his departure in 1997. After that, Beesley was also one of the lead engineers on Juniper's M40, the lead engineer on the M20 and "pivotal" in the design and implementation of the company's T640 core router, according to the BCN web site.

Other observers believe some of the Procket Networks intellectual property Cisco acquired for $89m six months ago has found a home at BCN and in the next generation 7600 and 10000 series successors.