On 13 October 2009, Cisco Systems announced that it intends to acquire the IP-based mobile infrastructure solution vendor Starent Networks for $2.9 billion in cash and equity. The companies expect the deal to close during the first half of calendar year 2010, after which Starent will become Cisco's Mobile Internet Technology group.

With this acquisition, Cisco is betting on the strong trends for mobile data. According to Cisco’s “Visual Networking Index" — a report in which Cisco seeks to forecast the growth and use of IP worldwide — global mobile data traffic will more than double every year through 2013 (see http://www.cisco.com/en/US/netsol/ns827/networking_solutions_sub_solution.html). Starent is a mobile packet core specialist whose technology Gartner has rated as good to excellent. Its key offering, the ST40, is a purpose-built Evolved Packet Core (EPC). Cisco’s EPC is not a complete solution, as it is based on the 7600 router as the platform for the public data network (PDN) and serving gateways. The Starent technology will extend Cisco’s core routing business, enabling it to offer an end-to-end solution in the core, which enhances its competitiveness against Alcatel-Lucent, Ericsson, Nokia-Siemens, Juniper Networks and Huawei. Such solutions appeal to accounts like AT&T that prefer working with larger vendors with comprehensive offerings.

Cisco will also benefit from Starent's technology leadership in code-division-multiple-access-based mobile data switching with its packet data serving node (PDSN) solutions. In addition, Cisco can leverage Starent’s software expertise within newer functions, such as the IP Multimedia Subsystem (IMS) Call Session Control Function (CSCF), ASN gateways for Wi-Max, PDSN/Gateway GPRS Support Node (GGSN) and long-term evolution (LTE) EPC. Eventually, Cisco could port these solutions on top of the Cisco ASR 9000.

The companies face the usual challenges inherent in merging organizations with different development centers and cultures and overlapping customer bases. But access to Cisco's resources could help convert Starent's LTE trials with Verizon Wireless and Sprint into lasting deals. The acquisition would also give Starent an entry into Cisco's customer base and its status as a preferred vendor on many Tier 1 accounts.

Cisco and Starent customers:

• Ask for a road map for Starent and Cisco products and services, and a support plan for Starent products. Inquire after any plans for converged offerings on the ASR 9000 platform.
• Shortlist Cisco for upgrades and replacements of Cisco's 7600-based products if you are able to leverage an installed Cisco infrastructure.
• If evaluating Starent solutions for "greenfield" accounts, factor in the risk if the deal does not go through.

• "Vendor Rating: Cisco” — Gartner has given Cisco a "positive" rating, in part because it continues to expand its capabilities beyond networking into applications, services, the data center and the home. By Ken Dulaney and others
• "Dataquest Insight: Scorecard for Vendors of Long-Term Evolution Network Infrastructure"— Gartner offers LTE vendors and mobile network operators guidance on this key technology for enterprise wireless broadband. By Silvain Fabre and others

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