By Joshua Jamerson
Cisco Systems Inc. (CSCO) agreed to buy the privately held
Tail-f Systems for $175 million, a move meant to broaden Cisco's
cloud-services offerings.
The purchase price comprises cash and retention-based
incentives.
Cisco hopes the acquisition will help it harness a growing
consumer base that wants to use cloud technology with greater
agility and lower costs, the company said in a statement.
Tail-f, a Swedish network-services company, focuses on reducing
information-technology costs and replacing slower IT models with
faster ones.
Cisco sees the deal closing in the fourth quarter of the fiscal
year.
Hilton Romanski, senior vice president of Cisco Corporate
Development, said service providers need new capabilities in a
world with more people, devices and sensors connecting to the
Internet.
"Our goal is to help to eliminate the bottleneck caused by
operational complexity within the network," Mr. Romanski said. He
said the Tail-f acquisition will help improve Cisco's
network-function virtualization, as well as help service providers
cut costs and speed up deployment of new services.
Upon completion of the acquisition, Tail-f employees will join
Cisco's cloud and virtualization group.
Cisco, the Silicon Valley giant known for supplying routers and
switching gear that funnels traffic on corporate campuses and over
the Internet, is seen as a bellwether in corporate-technology
spending. It has recently built up a new, fast-growing set of
servers. But it has also signaled it expected its business to slow
and said last year it planned to trim about 4,000 jobs, or 5% of
its workforce.
Write to Joshua Jamerson at Joshua.Jamerson@dowjones.com
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