For quite some time, the challenge for data engineers and scientists in the field was to design technology that would allow for more data to be stored by companies, and subsequently consumers. I remember when a 256mb flash drive, about one-fourth of a gigabyte, cost $40 at every office supply store, but this would soon change. Nowadays, the amount of data stored on global networks and $40 flash drives is increasing at an aggressive rate. In terms of storage, we’re way past the point of storing data gigabyte by gigabyte, we’ve ascended to needing to support petabytes (1000^5 bytes) and exabytes (1000^6 bytes). With all this data flying around, the question is no longer can we store the information, but rather can our network equipment transmit the data we use over distances, and who can engineer devices that expedite this process? 

If I’ve already lost you amid the sea of tech jargon, bare with me. When you send an email containing a file (photo, excel spreadsheet, document), it usually takes longer the more data you try to send off, because the computer is compressing all that data into a format that will fit on the email. Presently, network equipment manufacturers are trying to increase data transmission speeds to get your email, chock full of large files and data, where it needs to go in as seamless a process as possible. This need for faster data transmission via network solutions has grown into a sub-sect of the tech industry that investors in the space have shifted their much of their attention towards, leading companies in the space to look into acquisitions to make themselves more competitive in the market. 

Already a leader in the networking equipment department of the tech sector, Cisco (CSCO), over the last several months, has explored several options for finding a solution for the world’s growing data networking issues, ultimately deciding that an acquisition would be the best course of action. On Tuesday, Cisco (CSCO) announced its intent to acquire Luxtera, Inc for $660 million in an all-cash deal.  

“Our customers are looking to address the unrelenting demand for more bandwidth driven by an emerging class of distributed cloud, mobility, and IoT applications. That’s why today we announced our intent to acquire Luxtera, Inc., a privately held semiconductor company that uses silicon photonics technology to build integrated optics capabilities for web-scale and enterprise data centers, service provider market segments, and other customers. Luxtera’s technology, design, and manufacturing innovation significantly improves performance and scale while lowering costs.” 

Rob Salvagno, Vice President for Corporate Business Development, Cisco 

Simply put, photonics use light to move large chunks of information (data) at faster speeds over further distances through the use of fiber optic cables. Even more simply put, Cisco (CSCO) acquired Luxtera because their photonics technology will help Cisco (CSCO) and its customers efficiently transmit large amounts of data. Typically other equipment is needed to turn light (photons) from fiber optics cables into the electronic signals needed to run computers, but Luxtera told several media sources that designing and manufacturing a high volume of chips that can accomplish this task will be fairly simple. 

Cisco (CSCO) has been struggling recently to stay relevant in the tech sector as the industrywide trend towards open-source software and technologies have become the new normal. As one of the leading manufacturers of physical hardware for networking, Cisco’s (CSCO) investment into Luxtera will hopefully give the company a competitive edge in a market which is hot for sleek, efficient, and cheap data transmission solutions. 

“While much of the recent focus has been on our software transition, it goes without saying that world-class hardware, it goes without saying  that world-class hardware, coupled with our investment in silicon and optics, is at the hear of our Intent-Based Networking strategy…”

Rob Salvagno, Vice President for Corporate Business Development, Cisco 

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