Cisco snaffles P-Cube

$200m in cash and options

By Tony Lock, 27th August 2004

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Summer used to be the time of year when business slowed down from its usual frenetic pace and a degree of calm settled over organisations. This year has been somewhat different and a few days ago Cisco, one of the most widely recognised IT suppliers, agreed to splash out some $200m to acquire P-Cube.

P-Cube Inc. is a privately held company based in Sunnyvale, California that has developed a range of IP service control platforms. The agreement will see Cisco pay some $200m in cash and options for P-Cube and, subject to the usual closing conditions, the acquisition is expected to close during the first quarter of Cisco’s fiscal year 2005. At that time it has been announced that the P-Cube employees, currently numbering 118, will report to Pankaj Patel, vice president and general manager of Cisco's Broadband Edge and Midrange Routing Business Unit.

P-Cube’s solutions are designed to provide advanced traffic control and bandwidth shaping functionality. The company’s Service Engine family of purpose built network devices utilise ASIC components and RISC processors to perform stateful, bi-directional inspection of IP traffic flows. The system’s subscriber awareness allows the IP traffic flows to be mapped to user ownership thereby supplying detailed information on network usage in real time. If so desired, this information may then be used to control the traffic based on configurable rules.

The Service Engine performs layer 7-3 stateful wire-speed packet inspection and classification to currently support over 600 protocol/applications, including Streaming and Multimedia protocols such as RTSP, SIP, HTTP-STREAMING and RTP/RTCP. The engine has transparent network and BSS/OSS integration into existing networks.

P-Cube currently offers two major solutions, Engage and Encharge on top of its Service Engine technologies. Engage provides Cable and DSL service providers with capabilities such as P2P Detection and Control, Specialised Service Delivery, Content Based Billing and Application Differentiated Traffic Shaping (Tiered Services). For Mobile service providers Engage enables detailed Service Delivery Control and Service Differentiation. Encharge allows mobile service operators to enable Post- and Pre-paid Service Control along with User and Service Quota Enforcement.

In effect, P-Cube begins to make it possible for service providers to differentiate between services like Voice-over-IP, web browsing, music downloads, video streaming or P2P traffic thereby making it possible to control the quality of individual services or to charge for them at different rates without necessitating costly network infrastructure upgrades. Bandwidth need no longer be the only payment model in town.

The move is certain to enhance Cisco’s standing within the Telco community, an industry with which it is keen to expand its business. Cisco has already started working on deep packet inspection and the acquisition of P-Cube may prove to be very shrewd. Indeed, as organizations look more and more closely at the services they run, the costs associated with said services and the business value of those services it is likely that the capabilities available in P-Cube’s technologies could bring benefits to organizations in many verticals, not just the large Telco service providers.