Cisco Scoops Up Self-Optimizing Network Vendor Intucell

Cisco Systems (NASDAQ: CSCO) will plunk down nearly a half-billion dollars–$475 million to be precise–for Intucell, a four-year-old Israeli developer of self-optimizing network (SON) software that enables mobile carriers to configure, manage and heal cellular networks automatically in real time.

It’s no overstatement to say that the Cisco deal is a windfall for Intucell, which landed $6 million in venture funding from Bessemer Venture Partners early in 2011. The company’s software tracks the network’s health and levels of congestion, monitoring the transmission power of each cell to optimize coverage and capacity. For mobile carriers, the result is fewer dropped calls and–the big kahuna—operators can glean more capacity from less infrastructure.

In February 2012, Intucell landed a tipping-point deal for its SON technology with AT&T (NYSE: T) that reportedly has helped ease the carrier’s data crunch problems, evidently nudging the Israeli developer into the limelight enough for Cisco to notice. The networking vendor reasons that with greater network traffic and complexity, the need to optimize bandwidth, usage and services is increasing—making the Intucell technology all the more appealing because it examines and adapts the network to meet demand.

With the acquisition, Cisco believes it is supplying service providers with a cutting-edge tool to manage operational costs and make better use of infrastructure investments.

“The mobile network of the future must be able to scale intelligently to address growing and often unpredictable traffic patterns, while also enabling carriers to generate incremental revenue streams,” said Kelly Ahuja, Cisco Service Provider Mobility Group senior vice president and general manager. “Through the addition of Intucell’s industry-leading SON technology, Cisco’s service provider mobility portfolio provides operators with unparalleled network intelligence and the unique ability to not only accommodate exploding network traffic, but to profit from it.”

The deal is expected to close in Cisco’s fiscal Q3 2013 or by the end of April. Intucell will be folded into Cisco’s Service Provider Mobility Group, reporting to Shailesh Shukla, Software and Applications Group vice president and general manager.