Cisco Systems, already the runaway global leader in routers and routing software, has confirmed that it is to buy routing software start-up BCN Systems for an initial $34 million (£17.6 million).

In the week it turned 20, the networking giant announced it will pay around $34 million in cash for all outstanding equity in BCN – a move that should help expand its new IOS-XR network operating system. It already had a $15 million (£7.8 million) stake in BCN.

Ned Hooper, vice president of business development at Cisco explained this figure could increase to as much as $122 million (£63.3 million): “Because it is still in the architecture, part of the value will be determined on the success of that as it is rolled into products.”

According to Cisco, BCN’s software will complement Cisco’s existing operating software, and critically industry analysts expect BCN technology to freshen up the networking giant’s ageing 7600 and 10000 edge router platforms.

The BNC acquisition is expected to play an important role in Cisco’s development of voice over Internet Protocol (VoIP) products.