ArrowPoint

Market position

ArrowPoint was described as a leading provider of content switches, competing with Alteon WebSystems and F5 Networks in the web switching market, which the Internet Research Group projected would grow from $260 million in 1999 to $828 million by 2002. Cisco, which previously offered its Local Director device, acquired ArrowPoint to strengthen its web traffic management capabilities; competitors Extreme Networks, 3Com and Cabletron Systems instead partnered with F5.

Its architecture supported a full set of content-aware switching features, including URL- and cookie-based traffic direction, which Cisco cited as providing a feature-rich and flexible content switching platform.

Technology

A combined software and hardware switching architecture supporting content-aware features including URL- and cookie-based switching, enabling traffic to be directed on the basis of the content requested and the frequency of requests. The software capabilities were described as integrable with existing Cisco products and complementary to the Cisco Catalyst multilayer switching family.

Go-to-market

Internet service providers, web hosting companies, e-commerce websites, and emerging categories of application service providers, application infrastructure providers and "dot com" companies.

Geography

Headquartered in Acton, Massachusetts; the acquiring company, Cisco Systems, is based in San Jose, California.

History

Founded in 1997 in Acton, Massachusetts, ArrowPoint held an initial public offering on March 31, 2000 that gave it a market value of roughly $1 billion at its opening price, with shares reaching $140 on the first day of trading before falling to $59.50 two weeks later. According to ArrowPoint president Louis Volpe, Cisco had approached the company about a week before the offering, but ArrowPoint executives wanted the IPO to proceed first. On May 5, 2000, Cisco announced a definitive agreement to acquire the company in a stock exchange valued at about $5.7 billion, and the acquisition closed on June 23, 2000. At the time of the announcement the company had 337 employees, who were to be led by ArrowPoint CEO Cheng Wu within Cisco's Public Carrier IP Group under Senior Vice President Kevin Kennedy.

Risks & controversies

After ArrowPoint's share price rose 27 percent the day before the acquisition was announced, the Securities Exchange Commission opened an investigation into possible insider trading.