Cisco Buys Acacia: A $2.6 Billion Investment In Optical Coherent Tech


July 25, 2019 by Siobhan Climer

Cisco announced on July 9, 2019 it would be acquiring optical component developer Acacia Communications for $2.6 billion.

This isn’t Cisco’s first foray into optical technology; in December of 2018 Cisco announced its $660 million purchase of Luxtera, an optical component maker. And while optics may seem far-flung from routers and switches, optical coherent technology underpins intent-based networking, multicloud deployments, and higher bandwidth optical networking.


How Does Optical Tech Impact The Data Center?


Optical coherent technology is “a fancy term that means the ability to send optical signals over long distances”, says SVP Bill Gartner of Cisco’s Optical Systems and Optics business.

Acacia’s digital signal processing combined with Luxtera’s optical semiconductors puts Cisco strategically positioned at the forefront of data centers ops of the future.

Raj Shanmugaraj, president and chief executive officer of Acacia, sees this as an opportunity for innovation. “Coherent technology has been a game-changer for optical networking and continues to evolve with the deployment of pluggable coherent optics.” By integrating Acacia’s portfolio with Cisco’s, Shanmugaraj sees an acceleration toward the trend of these technologies across larger market segments.

Inside Cisco DNA Center: Intent-Based Networking Overview


Cisco Buys Acacia: Impact On The Industry


While Acacia and Cisco already had a robust partnership, there is interest in the industry as to how the acquisition will impact Acacia’s other clientele; namely, Huawei, ZTE, and Nokia Oyj.

The scalability and growth enabled by Acacia’s technology will – if executed properly – drastically impact various sectors such as webscale companies, service providers, and both enterprise and public sector data center operators.

This drives home a growing shift from chassis-based solutions to pluggable, high-speed modules inside routers and switches. These changes will reduce network costs and simplify network architecture.


Working With Cisco


Learn more about intent-based networking and how you can gain real-time benefits in your data center today with Cisco’s forward-facing technology. Mindsight is a Cisco Gold partner with over 15 years’ experience designing and implementing Cisco-based solutions.

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About The Author

Siobhan Climer, Science and Technology Writer for Mindsight, writes about technology trends in education, healthcare, and business. She previously taught STEM programs in elementary classrooms and museums, and writes extensively about cybersecurity, disaster recovery, cloud services, backups, data storage, network infrastructure, and the contact center. When she’s not writing tech, she’s writing fantasy, gardening, and exploring the world with her twin daughters. Find her on twitter @techtalksio.

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