Earlier today, Cisco Systems, Inc. (NASDAQ:CSCO) announced its intention to acquire Tail-f Systems, a provider of multi-vendor network service orchestration solutions for traditional and virtualized networks, for approximately $175 million in cash. Tail-f will also receive retention-based incentives in exchanges for all of its shares.

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Acquisition accelerates Cisco’s cloud virtual strategy

According to Cisco Systems, Inc. (NASDAQ:CSCO), acquiring Sweden-based Tail-f Systems will accelerate its cloud/virtualization initiatives and its strategy of delivering software that increases value to the applications and services of its customers while supporting its long-standing commitment of the company for open standards, architectures and multi-vendor environments.

The service provider cloud and virtualization portfolio of Cisco Systems, Inc. (NASDAQ:CSCO) simplifies and automates the provisioning and management of both physical and virtual networks. According to the company, the solutions of Tail-f are  applicable to many current network problems, including layer 2 or layer 3 VPN provisioning and next generation networking based network function virtualization (NFV) as well as network programmability.

Eliminating operational complexity bottleneck

Hilton Romanski, senior vice president of corporate development at Cisco Systems, Inc. (NASDAQ:CSCO), said the acquisition of Tail-f’s network services configuration and orchestration technology will extend Cisco’s innovation in network function virtualization. It will also help service providers reduce operating costs and the time needed to deploy services, and make swift service provisioning a reality.

“With a rapidly increasing number of people, devices, and sensors connecting across the Internet of Everything (IoE), service providers require new capabilities to deliver value-added, cloud-based services and applications. Our goal is to help to eliminate the bottleneck caused by operational complexity within the network,” said Romanski.

Tail-f Systems is based in Stockholm, Sweden. Its technology helps network equipment vendors reduce the time-to-market for networks in building equipment for agile, software programmable networks. Its products help service providers and enterprise IT organizations implement applications, network services and solutions across networking devices easily and at a lower price.

Increased competition

Cisco Systems, Inc. (NASDAQ:CSCO) said increased competition drives service providers to launch new services at a faster rate and the increasing volume of network traffic and sprawling infrastructure makes the cost of managing their networks more complex and expensive. According to the company, customers are turning to its cloud technology to find new services with greater agility and less cost.

The company expects to complete the acquisition of Tail-f Systems in the fourth quarter of this year subject to customary closing conditions.