Cisco has announced its intent to acquire privately held Tail-f Systems, a developer of multivendor network service orchestration systems for traditional and virtualized networks, and one of the vendors AT&T selected for its Domain 2.0 SDN/NFV project.
Under the terms of the agreement, Cisco will pay $175 million in cash and retention-based incentives in exchange for all shares of Tail-f, which is based in Stockholm.
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With the Tail-f acquisition, Cisco essentially buys its way into AT&T Domain 2.0 initiative, an effort to virtualize the AT&T service network with software-defined networking and network functions virtualization. Tail-f is one of six vendors AT&T has identified publicly as Domain 2.0 suppliers, a list that also includes Ericsson, Metaswitch Networks, startup Affirmed Networks, Juniper Networks and Amdocs.
Domain 2.0 is viewed as a negative for Cisco's Application Centric Infrastructure programmable networking strategy due to AT&T's reported preference for commodity, white box hardware and SDN controllers. VMware's NSX network virtualization platform is also already present in AT&T data centers.
Cisco, though, is expected to retain its incumbency in AT&T's WAN.
Tail-f's products help service providers and enterprise IT organizations implement cloud applications and network services across multivendor networking devices. They also help reduce time-to-market for network equipment vendors building equipment for software-programmable networks, Cisco says.
Tail-f's network service orchestration technology will help Cisco provide products that simplify and automate the provisioning and management of both physical and virtual networks in the cloud. Tail-f's software also addresses provisioning of traditional Layer 2/3 VPNs as well as next-generation networks based on NFV and programmability, Cisco says.
"The acquisition of Tail-f's network services configuration and orchestration technology will extend Cisco's innovation in network function virtualization, helping service providers reduce operating costs and the time it takes to deploy new services, making agile service provisioning a reality," states Hilton Romanski, senior vice president of Cisco Corporate Development.
Upon completion of the acquisition, Tail-f employees will join Cisco's Cloud and Virtualization Group led by Gee Rittenhouse, vice president and general manager. The acquisition of Tail-f is expected to be completed in Cisco's fiscal fourth quarter, which ends in July.
Tail-f has 90 customers, including seven of the top 10 network equipment providers, as well as a number of Tier 1 service providers in addition to AT&T. Deutsche Telekom is also a Tail-f customer.