Cisco Buys BroadHop for Network Policy Management

The deal is aimed at carrier networks, and fits in with Cisco CEO John Chambers' promise of a more aggressive acquisition strategy.

Cisco Systems is bolstering its offerings for carrier networks with the acquisition of BroadHop, which offers policy control and service management technology.

Cisco officials announced the deal Dec. 18, less than a month after buying network traffic management vendor Cariden Technologies for $141 million and less than two weeks after CEO John Chambers told financial analysts in New York that Cisco would continue its aggressive acquisition strategy to help build out its technology portfolio.

The company did not offer financial details about the deal for BroadHop, a 9-year-old company that has been a WiFi partner of Cisco's for several years. BroadHop's technology and employees will be brought under Cisco's Service Provider Networking Group and will report to Shailesh Shukla, vice president and general manager of the company's Software and Applications Group.

BroadHop offers a host of products under its Quantum Network Suite, including the Quantum Policy Server, which links services to the network; Quantum Policy Builder, a rich interface based on Eclipse; Quantum Subscriber Manager, which provisions subscribers, their services and network profiles; and Quantum Subscriber Analytics, which gives service providers deep visibility into what their subscribers are doing, including behavior and the amount of time they're using the service.

With BroadHop's technology, Cisco will be able to offer carrier networks a better and more flexible way to control, customize and monetize the services they offer, a win for both the service providers and users, according to Hilton Romanski, vice president and head of Cisco's Corporate Business Development office.

"A service provider can integrate BroadHop technology to enable end-users to purchase customized premium service packages," Romanski wrote in a Dec. 18 post on Cisco's blog. "For example, if a consumer desires premium on-demand streaming, BroadHop technology allows the service provider to add value to and monetize this particular service. In return, the user is granted a high level of service and premium bandwidth to ensure the best possible experience."

This is particularly important as the global IP traffic is expected to continue, he wrote. According to Cisco figures, global Internet network traffic grew at least eightfold over the past five years, and is projected to grow another three times over the next five years. By 2016, there will be 3.4 billion Internet users and almost 18.9 billion network connections, according to numbers in Cisco's latest Visual Networking Index Forecast.

The acquisition of BroadHop also will be a key part of Cisco's Open Network Environment (ONE) strategy, which is designed to improve network programmability, Romanksi said. Being able to more easily and cost effectively configure, program and scale networks is a key driver behind the current software-defined networking (SDN) push that promises to be a significant focus of networking vendors—including Cisco—going into 2013.

During the meeting with analysts, Chambers reportedly said the company had pulled back on acquisitions during its restructuring last year, but that the pace would pick up as Cisco looks to build out its capabilities. Still, Cisco has kept a steady stream of acquisitions going, from expensive ones—$5 billion for NDS Group for video software and security, and $1.2 billion for Meraki for mobile device management—to less costly deals for Cariden, Cloupia and, now, BroadHop.

"Acquisitions and investments are a key part of Cisco's build, buy and partner innovation framework and supports one of Cisco's five foundational priorities to lead the market in networking across all customer segments," Romanski wrote. "The BroadHop acquisition is well-aligned to Cisco's goals of developing and delivering innovative network and software technologies, while also cultivating top talent."