Earlier this week (on Monday), Cisco (Nasdaq:CSCO) announced the acquisition of Dynamicsoft, one of the pioneers of SIP (the Session Initiation Protocol), which is becoming the next de-facto VoIP signaling protocol, gradually replacing H.323.  Anyone attending a VON show probably has some knowledge about the company, including its CTO, Jonathan Rosenberg, a well respected VoIP guru and SIP enthusiast. 

Under the terms of the transaction, Cisco will pay about $55 million in cash for Dynamicsoft, including assuming the company's debt of $3.8 million.  This was the second deal that Cisco has announced in less than a week, having purchased last Thursday network management company NetSolve for $128.7 million in cash.  Earlier in August, Cisco's acquisition of Israeli startup P-Cube (a developer of IP service control gear) was discussed here.

Dynamicsoft, originally founded in 1998 with VC funding from the likes of Capital, Sun Microsystems, and Piper Jaffray & Company, among others, has 104 employees.  The company was able to capture an impressive list of more than 100 customers, including BT, Deutsche Telekom, Level3, Sprint and Vonage.  Sprint, for instance, uses Dynamicsoft to build its push-to-talk mobile services, which enables cellular phone users to use their handsets as walkie-talkies. 

While Cisco was not an original investor in Dynamicsoft, the company had been one of Cisco's ecosystem partners.  The key goal behind the transaction is to strengthen Cisco's portfolio for the broadband communications market, including voice and data convergence in the wireline and wireless arenas.   Cisco obviously wants to allow it service provider customers to implement "subscriber aware" networks that can deliver next-gen VoIP applications and services.  These subscribers would be able to rely on SIP and presence elements to use real-time applications such as find-me/follow-me and IM.