Cisco to Shell Out $2.6 Billion for Supplier Acacia Communications

Cisco is buying Acacia Communications, an Cisco supplier that develops, manufactures and sells high-speed coherent optical interconnect products, for about $2.6 billion.

As Cisco and Acacia come together, Cisco plans to support Acacia’s existing and new customers that want optics, digital signal processing/photonic integrated circuit modules, and transceivers for use in networking products and data centers. The acquisition is expected to be final during the first half of next year.

Nirav Sheth, Cisco’s vice president of worldwide sales and systems engineering, tells us for his company’s partners, “we believe this all comes down to capitalizing on the industry shift to intent-based networks.”

“While there’s been a strong focus on the impact of software, world-class hardware will always be critical for networking,” he said. “Cisco is investing across silicon, optics and software to create a unique foundation for network transformation. This foundation allows us to transform every domain of the network with our intent-based architectures. While the initial opportunities for our partners with coherent optics will be with data center operators and service providers, the reality is that the optics, silicon and software are the building blocks for our intent-based architectures.”

As network architectures evolve, it will create an opportunity for Cisco and its partners to lead the transition, Sheth said.

Cisco’s David Goeckeler

Upon completion of this transaction, Acacia employees will join Cisco’s optical systems and optics business within its networking and security business. Both are publicly traded companies.

“By innovating across software, silicon and optics, Cisco is reinventing every domain of the network with our intent-based architectures,” said David Goeckeler, executive vice president and general manager of Cisco’s networking and security business. “With the explosion of bandwidth in the multicloud era, optical interconnect technologies are becoming increasingly strategic. The acquisition of Acacia will allow us to build on the strength of our switching, routing and optical networking portfolio to address our customers’ most demanding requirements.”

Cisco offers a portfolio of optical systems to support webscale, service provider, enterprise and public sector customer segments. These optical systems address performance, power and cost requirements. Cisco said Acacia’s technology will enhance this portfolio.

“Coherent technology has been a game-changer for optical networking and continues to evolve with the deployment of pluggable coherent optics,” said Raj Shanmugaraj, Acacia‘s president and CEO. “Upon close, Cisco and Acacia will continue to serve and support existing Acacia customers. By integrating Acacia technology into Cisco’s networking portfolio, we believe we can accelerate the trend toward coherent technology and pluggable solutions while accommodating a larger footprint of customers worldwide.”