Cisco to buy VoIP software vendor

Cisco Systems Inc. this week announced plans to acquire Dynamicsoft Inc., a maker of carrier VoIP software based on Session Initiation Protocol.

Cisco will pay $55 million in cash for the Parsippany, N.J.-based Dynamicsoft, assuming the vendor's $3.8 million in debt, according to a statement from Cisco. The acquisition fills out Cisco's software portfolio for carriers interested in providing converged applications to subscribers, such as presence management and unified messaging.

With its acquisition, Cisco is targeting broadband service providers looking to deploy converged voice/data services to consumers and businesses. Cisco says its carrier VoIP products, such as its SIP-based BTS 10200 Softswitch, will be integrated with software products from Dynamicsoft to help carriers deploy converged applications more quickly.

Dynamicsoft's main carrier software products include its Presence Engine, which provides a presence management platform for wireless phone subscribers, and AppEngine, an application server for developing and hosting SIP-based convergence services, such as presence, find-me-follow-me, instant messaging and conferencing.

The addition of Dynamicsoft's technology to Cisco's carrier VoIP offerings could give Cisco a badly needed boost in that market. While Cisco is a dominant provider of Internet routing hardware to vendors, it is less of a factor in the emerging carrier VoIP market.

According to telecom analyst firm Dittberner Associates Inc., Cisco did not crack the top five softswitch vendors in the first quarter of 2004. Huawei Technologies Co. Ltd. led the $427 million market, with over 31 percent of carrier VoIP port shipments, followed by Nortel with 19 percent. Other vendors included Telefonaktiebolaget LM Ericsson, UTStarcom Inc. and Sonus Networks Inc.

Dynamicsoft was founded in 1998 and has 104 employees. The firm's staff and technology will fall under the control of Don Proctor, vice president and general manager of Cisco's voice technology group.