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Cisco Systems to Acquire Altiga Networks and Compatible Systems

Extends VPN Product Portfolio for Enterprise and Service Provider Customers

SAN JOSE, Calif. - Jan. 19, 2000 - Cisco Systems, Inc. today announced definitive agreements to acquire privately-held Altiga Networks of Franklin, MA and Compatible Systems of Boulder, CO. Both acquisitions enhance Cisco's New World VPN (Virtual Private Networks) offering by providing enterprise and service provider customers with industry-leading remote access and extranet solutions.

Under the terms of the agreement, Cisco common stock worth an aggregate value of approximately $567 million will be exchanged for all outstanding shares, warrants and options of Altiga and Compatible. These acquisitions will be accounted for as pooling of interests and are expected to close in the third quarter of Cisco's fiscal year 2000. Both acquisitions have been approved by the board of directors of each company and are subject to various closing conditions. In the New World of communications, VPNs provide secure network connectivity on a public infrastructure, extending geographic connectivity to telecommuters, mobile users and remote offices, as well as customers, suppliers and partners. VPNs are fundamental for enterprises seeking to achieve global reach, ubiquitous access and enable new business applications. VPNs provide several benefits to enterprise customers including lower total cost of ownership and infrastructure investments as well as simplified wide area network (WAN) operations. For service providers, VPNs represent an opportunity to differentiate their business, increase revenues and reach new customers.

Altiga is a market leader in integrated VPN solutions for remote access applications. Its product suite will complement Cisco's existing family of VPN routers and security appliances. Altiga's integrated VPN client, remote access gateway and management solutions will extend Cisco's broad VPN portfolio, providing enhanced VPN scalability, manageability and performance for enterprise edge applications including service provider-managed remote access.

Compatible is a leading developer of standards-based, reliable and scalable VPN solutions for service provider networks. Its industry-leading platform enables service providers to deploy robust, IPSec architectures for VPN services.

Altiga was founded in 1998. The 76 employees will be led by Altiga CEO Mark Freitas and will become part of the Enterprise Line of Business.

Compatible was founded in 1988. The 68 employees will be led by Compatible CEO Matt McConnell and will become part of the Service Provider Line of Business.

Cisco Systems

Cisco Systems, Inc. (NASDAQ:CSCO) is the worldwide leader in networking for the Internet.

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This release may contain projections or other forward-looking statements regarding future events or the future financial performance of the Company that involve risks and uncertainties. Readers are cautioned that these statements are only predictions and may differ materially from actual future events or results. Readers are referred to the documents filed by Cisco with the SEC, specifically the most recent reports on Form 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including risks associated with acquisition strategy, dependence on new product offerings, competition, patents, intellectual property and licensing, future growth, rapid technological and market change, manufacturing and sourcing risks, Internet infrastructure and regulation, international operations, volatility of stock price, financial risk management and potential volatility in operating results, among others.

Cisco, Cisco IOS, Cisco Systems, Catalyst, and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. in the U.S. and certain other countries. All other trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any of its resellers. (9907R)

Contact Information:
Third Party Contact(s)
Jeanette Gibson Cisco Systems, Inc. 408 525-8965 jegibson@cisco.com

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