Cisco's Linksys snaps up VoIP developer

By Steve Malone

Posted on 27 Apr 2005 at 12:35

Linksys, a subsidiary of telecoms giant Cisco Systems, has bought up Sipura Technology a specialist in VoIP telephony. Linksys will pay the owners of the privately held Sipura around $68 million in cash and share options for the company.

A supplier of wireless networking gear for homes and small businesses, Linksys already has strong links with Sipura who provides it with key technologies for the company's VoIP networking devices.

Cisco says it bought Sipura, partly for its technology and customer base. Among the products that Sipura has developed is technology built into leading VoIP adapters including some integrated into home routers and gateways, and a multi-line IP phone for the consumer and small business markets.

Mostly though, Cisco wants to use the company's expertise as the launch pad for Linksys's own R&D efforts in voice and video.

Cisco sees VoIP as a market where it needs to be a major player. 'VoIP is a strategic segment for innovation and growth for Cisco and Linksys. The acquisition of Sipura will augment Linksys' leading position in the rapidly growing VoIP market and is an example of Linksys' strategy to increase internal R&D capabilities in specific product categories,' commented Charles Giancarlo, Cisco CTO and Cisco-Linksys president.

This is the third acquisition this year for Cisco. The company has already bought Airespace and Topspin in deals worth $700 million. Cisco is well known for propelling growth through acquisition and this latest one is no exception.

Cisco sees huge potential in providing the VoIP infrastructure. The company quotes the Synergy Group research that estimates that there are some eight million home users of VoIP world wide. Other research quotes one million in the US alone. Growth in broadband connections means that by 2009 this figure will have grown to 58.9 million.