CSCO: Cisco Announces Agreement to Acquire Reactivity

Cisco Systems, Inc., (NASDAQ: CSCO) today announced a definitive agreement to acquire privately-held Reactivity, Inc., of Redwood City, California. Reactivity is a leading XML (eXtensible Markup Language) gateway provider for organizations ranging from commercial enterprises to the Global 500.

Customers and major software providers are evolving their enterprise software architectures from a client-server paradigm to a service-oriented architecture. In addition, customers are deploying a variety of Web 2.0 capabilities that are collectively transforming the World Wide Web from a collection of relatively static web sites to a services rich computing platform. XML- and Simple Object Access Protocol (SOAP)-based web services are becoming the de facto communications and information exchange standard for this new model of applications. Reactivity's industry leading XML gateways enable customers to efficiently deploy, secure, and accelerate XML and web services.

The acquisition demonstrates Cisco's commitment to the expanding Application Networking Services (ANS) Advanced Technology segment, which is an important part of Cisco's Service-Oriented Network Architecture (SONA) strategy and vision. Cisco ANS provides customers with shared application-aware services to improve the availability, performance, and security of applications delivered from the network platform. Reactivity complements and extends the capability of Cisco's ANS portfolio for these emerging application architectures.

"Customers continue to validate our on-going strategy of building more application services on the network platform," said Jayshree Ullal, Senior Vice President, Datacenter Switching and Security Technology Group (DSSTG). "Reactivity together with our Application Control Engine (ACE) provides a highly capable solution for customers' application delivery needs in the data center."

Under the terms of this agreement, Cisco will pay approximately $135 million in cash and assumed options of Reactivity. The acquisition is subject to various standard closing conditions, including applicable regulatory approvals, and is expected to close in the third quarter of Cisco's fiscal year 2007, ending April 28, 2007.

Reactivity was founded in 1998 and has 56 employees in Redwood City, Calif.

Upon close of the transaction, the Reactivity team and products will be integrated into DSSTG reporting up into Ullal.