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Cisco to acquire Reactivity for $135 million

One analyst says Cisco will benefit from Reactivity's policy and threat management capabilities.

Cisco Systems Inc. Wednesday announced plans to acquire Redwood City, Calif.-based extensible markup language (XML) gateway provider Reactivity Inc. for $135 million in cash. One analyst said Reactivity's technology will help Cisco add more muscle to its security capabilities.

Reactivity has policy management and threat management capabilities, and I think Cisco is going to benefit from that.
Jason Bloomberg,
senior analystZapThink

"Reactivity has policy management and threat management capabilities, and I think Cisco is going to benefit from that," said Jason Bloomberg, a senior analyst with Baltimore, Md.-based research firm ZapThink. "They don't have a standalone XML firewall product, but they have XML firewall capabilities."

Cisco, the San Jose, Calif.-based networking giant, said the acquisition is an important piece of its Service-Oriented Network Architecture (SONA) effort.

"The acquisition demonstrates Cisco's commitment to the expanding Application Networking Services (ANS) Advanced Technology segment, which is an important part of Cisco's Service-Oriented Network Architecture (SONA) strategy and vision," the company said in a statement. "Cisco ANS provides customers with shared application-aware services to improve the availability, performance, and security of applications delivered from the network platform. Reactivity complements and extends the capability of Cisco's ANS portfolio for these emerging application architectures."

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Reactivity was founded in 1998 and has 56 employees.

Cisco noted that customers and major software providers are evolving their enterprise software architectures from a client-server paradigm to a service-oriented architecture and deploying a variety of Web 2.0 capabilities that are collectively transforming the Internet from a collection of relatively static Web sites to a services-rich computing platform.

"XML- and Simple Object Access Protocol (SOAP)-based Web services are becoming the de facto communications and information exchange standard for this new model of applications," the company said. "Reactivity's industry-leading XML gateways enable customers to efficiently deploy, secure, and accelerate XML and Web services."

Under the terms of the agreement, Cisco will pay approximately $135 million in cash and assumed options of Reactivity. The acquisition is subject to various standard closing conditions, including applicable regulatory approvals, and is expected to close in the third quarter of Cisco's 2007 fiscal year.

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