Parks Associates Blog

Wednesday, July 23, 2008

Cisco Aquires Pure Networks

First, Cisco acquired Ashley-Laurent to strengthen its residential gateway management software capabilities. Then, they acquired WebEx, and are using some of its features for remote customer support applications. Today, the company announced that it was acquiring Seattle-based Pure Networks, a company that has developed home networking management and software tools. It looks like Cisco is playing its cards to develop a complete end-to-end digital home support portfolio. I wonder who's next - maybe a remote management systems provider or another company in the OSS/BSS arena?

Pure Networks and Cisco were no strangers to each other. Pure Networks' software was already a key element in the Linksys Easy Link Advisor (LELA) solution aimed at simplifying the setup and management of wireless networks

It's interesting to see the valuations placed on the home IT support/remote management acquisitions that have been made recently. Cisco acquired Pure for $120 million. In Q3 2006, Microsoft purchased Gteko for $60 million. In Last month, Alcatel-Lucent aquired Motive, a provider or remote management systems for telecom operators, and that deal was for $68 million. to put this in perspective, compare these deals to one that got more column inches devoted to it - the Blockbuster acquisition of the online movie rental and download service provider Movielink in August 2007. That deal was for $6.6 million.

This digital home customer support market may largely fly under the radar, but there is some significant activity brewing. I've been having some interesting discussions with a number of the companies providing both software and support services in recent weeks - among them Best Buy's Geek Squad, Circuit City's Firedog, Large Software (they make software called PC Tune-Up), Avanquest (they make the System Suite software for enhancing PC security and performance), iYogi (remote support services), and Clean Machine. And, our recent CONNECTIONS 2008 event in Santa Clara featured sponsors and speakers from Affinegy, BSecure, Enure Networks, HiWired, Peak8 Solutions, PlumChoice, Radialpoint, SingleClick Solutions,, and TeliaSonera.

When you look at home IT support services, including home networking management software, remote support, and PC installation and configuration, we're anticipating about a $1.2 billion market for the U.S. by 2012. This does not include the kind of installation work that Best Buy, Circuit City, and others are doing for consumer electronics products, so that's obviously another significant revenue stream. As we start adding in additional support elements and value-added features, you're looking at a very significant market opportunity.


Anonymous Anonymous said...

This is very nice networks.

3:58 AM  

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