Cisco talks technology

Cisco Systems (CSCO) today said it will buy voice signaling translation technology maker LightSpeed International as part of its strategy to meld voice and multimedia capabilities into existing network infrastructures.

Under the terms of the acquisition, 2.7 and 3.3 million shares of Cisco common stock, worth $160 million, will be exchanged for the outstanding shares and options of Virginia-based LightSpeed International. In connection with the purchase, Cisco expects a one-time charge against after-tax earnings of between $.11 and $.15 cents per share for expenses in the second quarter of fiscal 1998.

The move is the latest in what is expected to be a slew of voice-related strategy announcements over the next several months from networking powerhouses like Bay Networksand Ascend Communications, among others.

Companies are scurrying to provide voice, multimedia, data, and fax services over typical enterprise corporate and service provider network layouts based on technologies like ATM (asynchronous transfer mode) and Frame Relay. The reason is simple: customers want to get as much "bang for the buck" out of their network as possible, given the high-cost of implementing a high-performance infrastructure.

Cisco said LightSpeed's voice signaling technologies will enable the California-based networking systems maker to build packages for both the enterprise and service provider markets as voice traffic shifts from purely circuit switched networks to integrated circuit and packet/cell switched networks. LightSpeed has developed voice protocol conversion and intelligent call control software which enables signaling to be transmitted among diverse sets of voice protocols and applications. The technology allows different phone and communications systems to work together, lowering communication costs for consumers.

Cisco is looking for LightSpeed's technology to provide PBX (private branch exchange) gateway funtions to interconnect systems for large customers and in the future, provide LAN PBX applications.

Cisco's new voice and multimedia intentions build on the announcement of an all-in-one box reported by CNET's NEWS.COM in April.

Cisco said it plans to round out its multimedia strategy over the next three quarters, much of it based on the company's concept of Tag Switching, which purports to add intelligence to the switching of IP packets.