Cisco Continues Software Acquisition Tear With Tropo Buy

Cisco Systems continued its aggressive software acquisition sprint Thursday, revealing plans to acquire Tropo, a cloud API platform provider.

The privately held Menlo Park, Calif.-based Tropo provides a cloud API platform that will allow Cisco service providers and developers to embed realtime communications within their applications "with minimal development effort," said Hilton Romanski, senior vice president and head of business development at Cisco, in a blog post on Thursday.

Romanski said the acquisition will generate new revenue for the service providers as well as provide a Collaboration Platform-as-a-Service offering to partners so they can create and sell new communication services. Tropo's APIs are currently used by more than 200,000 developers, which will become part of Cisco's Collaboration Technology Group led by Rowan Trollope, senior vice president and general manager.

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"Cisco has been on a mission to make collaboration super-simple," said Romanski in the blog post. "The need for next-generation communications and collaboration platforms with modern, easy-to-use APIs is more important than ever."

Cisco's focus on software acquisitions was a popular topic last week at the 2015 Cisco Partner Summit in Montreal.

"You'll start seeing Cisco getting bolder and bolder in software, not only in buying companies -- the last 9 acquisitions out of 10 are software companies -- but each business unit is innovating more software and coming out with more software solutions that we're going to take to market," said Bruce Klein, senior vice president of Cisco's Worldwide Partner Organization, during a press briefing at the conference.

The Tropo acquisition, which is expected to be complete in Cisco's fourth fiscal quarter, comes on the heels of its purchase of the application-centric networking company Embrane in April. The financial terms for both acquisitions were not disclosed.

"I'm very happy to see that Cisco recognizes there are technologies out there they can acquire and leapfrog their offerings with software that's so much easier to integrate than hardware acquisitions," said Kent MacDonald, vice president of converged infrastructure and network services at Long View Systems, a Cisco Gold partner based in Calgary, Alberta. "[The Tropo] acquisition broadens the feature and functionality of Cisco collaboration offerings, and I think Cisco recognizes there's going to need to be a blend of innovation and acquisitions to continue to take a leadership role."

Michael Greaney, CEO of Force3, a Crofton, Md.- based solution provider and Cisco Gold partner, said Cisco's recent software buying spree makes sense, noting that the networking giant needs to ensure it creates service opportunities for partners out of the acquisitions.

"We need to make sure ... we can provide not only the hardware and software that Cisco brings to the market but the services, because that's where a lot of our special sauce has been -- in services. That's where we can create differentiation," said Greaney. "The whole service arena becomes our swim lane where we can really differentiate, and that's going to be real important for us as a partner."

Partners said the acquisition also has a strong mobility play.

Many partners have been pushing Cisco to go after more software acquisitions to boost its software portfolio at a faster pace. Likewise, Cisco is starting to pressure partners to begin building software practices into their business models.

"For Cisco, it makes a lot of sense, what they're trying to do with these acquisitions. Some of this is about looking ahead several years where they can make the biggest impact in their business, and I think a lot of it lends itself to software rather than disrupt a technology," said Greaney. "Cisco's not going to sit still."

At Partner Summit last week, the company ramped up its software push with a new Software Partner Program that gives rewards and benefits tied to solution providers' software investments. The program will open at the beginning of 2016. Cisco also unveiled a new version of its Cloud and Managed Service Program that adds Cisco's Intercloud into the mix of new roles and allows partners additional choices of cloud architectures. Specifics on CMSP 2.0 will be unveiled in the first quarter of 2016.

PUBLISHED MAY 7, 2015