Cisco Systems Adds P-Cube for IP Play

Cisco Systems Inc. expanded its presence in the Internet-protocol space with a deal to buy P-Cube Inc., a developer of IP service-control platforms, for $200 million.

P-Cube’s software allows broadband service providers to identify potential subscribers, classify applications, improve service performance and charge for IP services without upgrading infrastructure.

Cisco said the acquisition will allow it to offer service providers additional capabilities for controlling and managing advanced IP services such as voice-over-IP, interactive gaming, video on demand and peer-to-peer applications.

“Intelligence in the network has always been a big strength in edge devices,” said Ben Stanger, senior manager for broadband marketing with Cisco’s cable business unit.

With the advent of telephony and PacketCable Multimedia, cable operators will have more traffic, subscribers and applications to deliver and monitor.

“The ability to manage that goes up substantially,” Stanger said. “Packets have addresses, there is information on headers, etc. This allows operators to better manage subscribers and traffic across the network.”

As operators layer on services and handle outside traffic, “the management process gets more complex,” Stanger said. “How do you identify [VoIP services] Vonage or Skype, and assign quality of service for those packets? The ability to identify traffic and manage premium subscribers and meter subscribers becomes more and more important.”

P-Cube is in trials with several U.S. cable operators, Stanger said. Worldwide, it counts 30 clients, including many DSL providers who face the same traffic-management issues.

P-Cube’s IP service-control platform consists of hardware servers and software packages. At the moment, the hardware will be sold separately, although it’s conceivable IP service-control modules could eventually be built into existing Cisco routers, Stanger said.

Cisco, of course, is a large supplier of cable-modem termination systems and broadband routers. Last year, it bought Linksys Corp., the wireless-router manufacturer. The P-Cube deal is the company’s largest “cable” deal since then.

As the cable industry moves to greater reliance on IP transport, “this hits the sweet spot for Cisco,” Stanger said.

Looking ahead, Stanger said Cisco was heartened by the discussion of wideband Data Over Cable Service Interface Specification and remote physical application layers in discussions of cable’s next-generation architecture. “There is a big concern in driving down the costs of per-stream DOCSIS,” he said.

P-Cube’s staff will report to Pankaj Patel, vice president and general manager of Cisco’s broadband edge and midrange routing business unit.