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Cisco Acquires Starent; No Movement on "Motion"

Cisco announced a definitive agreement to acquire Starent Networks, a supplier of IP-based mobile infrastructure solutions for mobile carriers. Under the terms of the agreement, Cisco will pay $35 per share in cash in exchange for each share of Starent Networks, roughly a 20% premium over the closing price yesterday. They will also assume outstanding equity awards for an aggregate purchase price of approximately $2.9 billion. The acquisition has been approved by the boards of directors of both companies and should close in the first half of 2010.Starent will become part of Cisco's Service Provider Business, so don't look for much direct impact on enterprise customers. In short, unlike the acquisition of video teleconferencing manufacturer Tandberg last week, this transaction will not have much to do with us.

We have been waiting for Cisco to make some significant announcement in the wireless area, and we're still waiting. Mid-last year Cisco announced a new architecture for wireless they called Cisco Motion. That announcement promised a new and more functional architecture with APIs allowing access to functions housed in a new server (i.e. the Mobility Services Engine) within a Cisco WLAN network. Since then, the architecture has been devalued to "marketecture" as they have failed to deliver anything of substance.

Evidencing a lack of leading edge enterprise wireless capabilities, Cisco declined our invitation to participate in our Integrating Mobility and UC vendor panel at the upcoming VoiceCon San Francisco next month. Maybe Mitel and ShoreTel do have more to say on the mobility front than Cisco?

Cisco has been grinding away at their WLAN infrastructure products, and like everyone else, is now showcasing their 802.11n capabilities. Back in January they announced their Aironet 1140 n-access points, but since then there's been little substantive news in wireless. There had been speculation that Cisco might acquire dual mode FMC supplier Agito Networks (who would have been way cheaper than either Tandberg or Starent), but that doesn't appear to be in the cards.

Watching Cisco, you get the feeling that they have so many things going on that nothing is getting done. Certainly we don't see much meaningful collaboration between the WLAN and UC groups, and outside of rah-rah talks from Mr. Chambers, wireless is a disconnect.