Cisco Wanna Light Up Data Centers— Intent to Acquire Lightwire

Cisco is planning to acquire Allentown, Pennsylvania-based Company Lightwire Inc. to add optical connectivity in its high-speed networks. The acquisition will allow Cisco to deliver cost-effective, high-speed networks with the next generation of optical connectivity, allowing service provider and data center customers to meet the growing demands of video, data, voice, mobility and cloud services. Cisco agreed to pay $271 million for Lightwire.Cisco to Buy Optical Network Company Lightwire

Apparently, Cisco believes Lightwire’s high-speed yet small silicon chips that can be used to transmit data via pulses of light instead of electric signals will come in useful. “The acquisition of Lightwire will support our data center and service provider customers as they manage the continuing deluge of network traffic alongside tight capital and operating budgets,” said Surya Panditi, senior vice president, Cisco Service Provider Networking Group. “With the combined know-how from Cisco in silicon design and Lightwire in CMOS photonics, we will transform Cisco’s optical connectivity business to an integrated technology platform that supports our customers’ burgeoning need for cost-effective high-speed networks.”

Silicon (CMOS) photonics technology is expected to play a significant role in the enablement of high-speed networks. With expertise in CMOS photonics and packaging design, Lightwire has made innovations in optical interconnects by integrating multiple high speed active and passive optical functions onto a small silicon chip. The smaller size, lower power consumption and scalability of Lightwire’s CMOS-based technology enable switches, routers and optical transport systems to have higher-density optical connectivity at a lower cost, allowing carriers to further reduce their operational and capital costs and offer new revenue-generating services.

 

Building Optical Networking

Cisco picked up CoreOptics, which designed digital signal processing solutions for high-speed optical networking applications, to equip its service provider customers with 100 gigabits per second transmission technology. Cisco has shown fruit from that acquisition as it works to meet traffic growth that it predicts will increase fivefold from 2008 to 2013, with a 40 percent annual growth rate.

“No matter what Cisco says they are today, they are and always will be a networking vendor first. This acquisition demonstrates that,” said Zeus Kerravala, principal analyst at ZK Research.

“When you combine this with the CoreOptics acquisition, you can see that Cisco is focused on the optical space and allowing for higher-speed networks. Once you get past 10 gigabits, you really can’t use copper anymore. So all high-speed connectivity is going to be optically connected. This acquisition makes a lot of sense for Cisco.”

Upon the close of the acquisition, Lightwire employees will be integrated into Cisco’s Transceiver Modules Group Business Unit and Supply Chain Operations Group. The acquisition is subject to various standard closing conditions and is expected to be complete in the third quarter of Cisco’s fiscal year 2012.

 

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