Cisco Tries to Cache In By Buying Software Start-Up Tasmania Networks

  • Written By: R. Krause
  • Published: November 3 1999

Event Summary

Cisco Systems said it has agreed to buy start-up Tasmania Network Systems in a stock deal worth $25 million. Cisco said it will integrate Tasmania's content network caching software into its current Cache Engine 500 product line. Network caching speeds up content delivery and overall network performance by storing frequently accessed information, like Web pages, closer to the end user, which decreases download times. The acquisition marks Cisco's latest buy after the company announced plans to accelerate its buying spree and make more than 20 purchases in the next year.

Under the terms of the agreement, Cisco said it will exchange its common stock worth $25 million for all outstanding shares, warrants, and options of Tasmania.

Market Impact

Although Cisco has already had a web caching product (the Cache Engine 500) on the market for over a year, it has been conspicuously absent from various web caching tests (Data Communications magazine's "Web Polygraph", IRCache BakeOff,) over the past year. In contrast, Tasmania Network's NetHawk software caching product yielded the best price/performance figures in the "Web Polygraph" testing ( at $15.37/rps1 (lower is better), also measured as 65 rps/K$ (higher is better). We believe the combination of the two products will result in a better offering than either presently has.

Naturally, this will lead to modest consolidation, as NetHawk functionality is folded into the Cache Engine product. In addition, Cisco has stated that they expect to acquire some 20 companies over the next year, continuing their buying spree. We expect Cisco to increase their presence in the caching market over the next 12-24 months

User Recommendations

In addition to the expected benefits of NetHawk on a Cisco platform, users will benefit from having a stable vendor (Cisco) from whom they can buy high performance caching software. This product will generally be of more interest to clients with larger bandwidth demands and considerations, such as ISP and large corporate environments where network bandwidth is at a premium.

1rps: Requests Per Second

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