The agreement allows Cisco to diversify away from its stagnating switches and routers business by giving it a stronger foothold in selling unified communications software to big telecommunications firms.
If deal negotiations are completed successfully, Cisco’s agreement to buy BroadSoft could be announced as early as today.
With its traditional business of making switches and routers seeing revenue declines, Cisco, like other legacy technology firms, has been focusing on high-growth areas such as security, the Internet of Things and cloud computing.
The BroadSoft deal would be Cisco’s second major acquisition this year following the $3.7 billion acquisition of privately-held AppDynamics Inc in March.
BroadSoft provides software and services that enable mobile, fixed-line and cable service providers to offer unified communications over their internet protocol networks.
BroadSoft has historically sold its products to large telecommunications companies such as Verizon and AT&T, which then resell the software to their business customers.