Cisco recently announced that it is acquiring the privately-held CoreOptics Inc., which designs digital signal processing (DSP) solutions for high-speed optical networking applications.　
According to the announcement from Cisco, CoreOptics will enable the company to equip service provider customers with highly-advanced, 100 Gigabits per second (Gbps) transmission technology to scale their networks to meet the demands of rapidly growing Internet Protocol traffic driven by video, mobility and cloud services.　
According to Cisco’s Visual Networking Index research, global IP traffic will increase fivefold from 2008 to 2013, with a 40 percent compound annual growth rate.
“With this acquisition, Cisco reinforces its commitment to continue to invest in its core networking business and to deliver IP next-generation networks at 100 Gbps and beyond,” said Surya Panditi, vice president and general manager of Cisco’s Service Provider Access and Transport Technology Group.　
Cisco says the next phase of innovation in optical networking will be driven by sophisticated modulation formats and advanced DSP technologies. These new capabilities enable the efficient transmission of large amounts of data over existing fiber optic installations.　By enabling high speeds across an existing infrastructure, Cisco and CoreOptics will address the challenge facing service providers of accommodating the growth in network traffic while managing tight capital expenditure budgets.
Under terms of the agreement, Cisco will pay approximately $99 million in cash and retention-based incentives in exchange for all shares of CoreOptics. The acquisition is expected to close in the second half of this calendar year.