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Cisco Buys Pirelli Optical Systems

Cisco Systems Inc. furthered its stake in the dense wave division multiplexing (DWDM) market today with their acquisition of the optical systems business of Pirelli SpA of Italy. With this acquisition, Cisco is keeping pace with DWDM market rivals Lucent Technologies and Nortel Networks.

Pirelli is not the first DWDM provider to be acquired by Cisco (www.cisco.com). Recent months have seen Cisco acquire Cerent Corp., Monterey Networks Inc., and Pipelinks. The acquisition of Pirelli Optical Systems (www.pirelli.com) lets Cisco offer an optical networking solution for service providers. Pirelli's optical products will be integrated with optical products and technology that Cisco acquired from its previous purchases and will help Cisco corner the market in DWDM.

Cisco is not the first networking giant to envelop smaller companies in its DWDM market positioning efforts. Last week, Nortel Networks (www.nortel.com) acquired Qtera Corp. (www.qtera.com), a company that produces ultra-long-reach optical networking systems. Lucent (www.lucent.com) has also been active in the DWDM arena.

Analyst Chris Nicoll, with Current Analysis (www.currentanalysis.com), says Cisco added the final building block in its Optical WAN solution with the Pirelli DWDM products. “Cisco now owns the complete solution end-to-end, and is better positioned to compete against Nortel and Lucent for IP/ATM-based optical network solutions."

DWDM is an emerging networking technology that uses color light waves instead of electronic pulses to transmit data. The result of this technology is an exponential increase in the capacity of broadband networks carrying a combination of phone, Internet, and video traffic. Optical networking is manageable bandwidth, meaning that IT managers can assign higher or lower priority to segments of bandwidth as deemed necessary. -- Isaac Slepner

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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