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Today Cisco Systems said it plans to spend $120 million to buy Seattle-based Pure Networks, a company that makes software to manage home networks. Pure’s network management software and underlying protocols, which make a connected device visible to a network, are becoming more important now that devices beyond computers and their peripherals are networked in the home.

Cisco has already tried to address this trend by using Pure’s technology in its Linksys Easy Link Advisor program, which was introduced on Linksys routers in April and is aimed at making it easier to manage multiple PCs and equipment. Today’s acquisition was driven, in part, by vendor and consumer satisfaction with those routers. It’s also because Cisco is trying to drive its vision of an intelligent network as the hub of the connected digital home. Pure’s software and HNAP protocol, which works with any IP network, from Wi-Fi to Ethernet, will underlie that intelligent network.

In contrast with Intel, which views the home network as a group of devices centered around a PC, Cisco’s Chris Dobrec, director of worldwide strategy for Linksys, says networked devices can and should have the level of intelligence built into them to recognize and talk to one another without using the PC as an intermediary. That’s a common enough vision, one that would allow you to take a photo with a digital camera and easily send it to your friend’s camera without ever using a PC. The days of standing there for 8 minutes at a family reunion while 10 people pass along their cameras to snag a shot would be over.

The problem with that scenario is that intelligence in devices doesn’t come cheap. In addition to a networking chip, certain protocols require a lot of CPU power or memory in order to identify and disclose themselves to a network. Dobrec says the HNAP protocol is light enough that it doesn’t need additional chips and could easily be embedded on existing hardware. Cisco plans to push the HNAP protocol as a standard and get device makers on board.

Eliminating the PC as a middleman won’t be easy with Intel pushing its own consumer networking technology, Cliffside, which uses Wi-Fi to connect devices and is scheduled to be introduced next year. The capability is already built into Intel’s Centrino chips, and will be activated with a software update in about eight months. Both HNPA and Intel’s Cliffside project will network Internet-connected devices as well as those that aren’t connected to the Internet.

In a mobile world, the conversation opener is less likely to be, “How are you?” and more likely to be, “Where are you?” Since the goal of social networking technology seems to be to get us to speak less and look at screens more (all hail the mighty text ad), Nokia’s purchase of Plazes makes all the sense in the world. In fact by buying the social mapping service, the handset maker is merely continuing efforts that began with its $8.1 billion NavTeq acquisition, which should close soon.

Nokia’s efforts, along with the iPhone’s new GPS chip, are a sign that location-based services are becoming a reality after years of hype. Previously a dearth of true Internet access paired with high-priced GPS plans made LBS more of a wish than reality, but the iPhone and unlimited pricing plans are changing that. Aside from picking up a cool LBS tool, the Plazes purchase drives home the message that Nokia is spreading its attention across multiple devices, something it signaled a serious interest in when it offered to buy TrollTech.

Plazes had only been available on the PC and Mac until earlier this year (with SMS texting tools too), when it launched an iPhone application. The crossing of the PC-to-mobile chasm may have been what triggered Nokia’s interest, as the handset maker has been busy thinking across all screens. As carriers lose their ability to control Internet access on phones and users have the true Internet available, companies who can offers people seamless applications on PCs and mobiles will thrive. Nokia is pretty close to carriers despite the grumblings over its latest handset offerings, so I look at this deal as validation for both LBS and a true-Internet experience on mobiles.

Strands, a Corvallis, Ore.-based startup that has shown success in the music social recommendation space, is relaunching Strands.com into a private beta online activity aggregation service. The company hopes to take the lifestreaming features offered by Web 2.0 darling FriendFeed a step further by adding the ability to build a “taste profile” based on your social media usage patterns.

Through the taste profile, Strands intends to battle the information overload from services such as Twitter and FriendFeed by using your online social circle to filter out relevant content you will find pertinent. “Hot Posts” will show you which online media items, such as news stories and videos, are currently popular among your friends to help you discover new things.

The company recently raised $55 million in capital and reports sales of $12 million in 2007. When I asked Jason Herskowitz, Strands’ VP of Social Media, how the company plans to monetize its new offering, he said Strands is merely looking for eyeballs to drive sales of its other offerings, such as Strands Social Player and Strands Business Solution.

I’m skeptical about how successful the new Strands.com service will be — it’s yet another service to sign up for and adopt. However, if implemented correctly, the service stands to bring the signal-to-noise ratio of lifestreams down to a tolerable level.

Today, telco gear maker Dilithium Networks launched a software product for carriers, content publishers and content delivery networks that can handle all of the transcoding necessary to take content formatted for one screen and move it to another in real time. The Dilithium Content Adapter is the first software product from the seven-year-old telecommunications gear maker. The company has focused on 3G video since its inception, and Dilithium says the product is already deployed with some operators and CDNs.

But Dilthium’s not alone in its focus on delivering faster video to mobile devices. In a few months, Limelight Networks will launch a mobile CDN product for its customers, and Dave Hatfield, an SVP of marketing sales at Limelight, says customers are testing such a product now. While it’s not a huge focus at Limelight right now, he says phones like the iPhone have changed the potential size of the market by making it easier for consumers to get mobile video — and that could spur market growth.

After the launch of of the iPhone, which opened the Internet to mobile users in ways that were previously cost prohibitive or downright impossible, mobile video may be inching closer to reality. I’m even inclined to shed my doubts about mobile video (although not mobile TV). As such, operators may have to worry about delivering everything from video ringtones to YouTube content on devices. And that could mean a new market for content delivery networks.

Delivering images and video over the Internet to a PC via a CDN is an established fact of doing business for content publishers, but adding mobile screens to the mix have a few gear and service providers seeing green. Such vendors are trying to capitalize on three opportunities in the mobile infrastructure to sell products.

First is some sort of transcoding service, through which content formatted for TVs or PCs is encoded and decoded in real time, or encoded in a variety of formats and stored for delivery to the appropriate device. The second is a sizing service that fits the content to the mobile screen on one of more than 5,000 different mobile devices out there. Finally, the third is any sort of tweak that can reduce the amount of space and time to deliver mobile video on a wireless network.

There are skeptics. Barrett Lyon, CTO of BitGravity, a P2P CDN, scoffs at the notion that any sort of specialized services need to be offered for delivering content to a mobile phone. He points out that CDNs are already delivering ringtones and other content to mobile devices. He may be right, which means Limelight may not find a huge market for its services.

However, I tend to believe that real-time transcoding and other ways of rendering content delivery across multiple devices seamlessly will propel sales of gear or software in the years ahead. Especially if mobile Interent devices take off like chip makers hope.

Earlier this week Om wrote about Dropbox, which he liked so much that we at GigaOM are trying it out for our file-sharing and backup needs. Also this week, FolderShare, another remote file access program, launched its first version since being acquired by Microsoft two-and-half years ago. So I decided to try them out, too.

After playing around with both, I’m torn. The essential differences between the two stem from the fact that Dropbox is all about sending your data to the cloud and accessing it there, whereas FolderShare links two computers that are already online. So for remote access of your files, FolderShare is the clear winner, while Dropbox takes the cake for backup and collaborative work.

I used both programs to link my MacBook with my ancient Toshiba laptop, which runs Windows XP. I’m using Firefox as my browser, and it was nice to see that Microsoft’s FolderShare program respected that and didn’t seek to open in Explorer instead. Both took just a few minutes to install and were easy to get running. Dropbox didn’t install cleanly into the applications portion of my Mac’s hard drive, but I moved it over.

With the install over, it was time to play. I created a shared folder in Dropbox and had the option of either saving files into my Dropbox located on the desktop or going to the Dropbox web site and uploading them. This feature would be nice if I were working on some else’s computer and didn’t want to install the Dropbox client. Could you use this to upload proprietary corporate data even if it was protected from transfer to a USB drive?

To access a shared folder, you send out invites. With Dropbox currently in private beta, it’s a nice way to spread your Dropbox love to friends who might appreciate the site. Another fun things about Dropbox is that you can share your photos with non-Dropbox members via a URL, but that will show all the photos in your Dropbox photo file, so be careful who sees it.

Frankly, because I don’t collaborate with anyone using offline files like Word or Excel, and work from the same laptop all the time, I’m not sure how useful I find Dropbox. FolderShare, on the other hand, is appealing to me in the way it lets me access the random files I have stored on my personal laptop, such as contact data from Outlook and notes taken on my personal PC. I can also use it to grab photos and music fairly easily, although I do wish I could see thumbnails for my images in the display. That would require too much information to be stored on the Microsoft servers, though.

Another caveat is that for FolderShare to work, both computers have to be online. So hibernating computers need to be awakened from their slumber. Bottom line, you could use FolderShare for easy access to your files on various computers and Dropbox for backup and collaborative work. As a word of caution, both services were running pretty slowly while I was playing around with them.

WiredReach, maker of peer-to-peer file-sharing application BoxCloud, has built a new service built around sharing media easily and quickly. CEO Ash Maurya says CloudFire is similar to services such as WeBot, but and doesn’t require a client on the end user’s computer. It does, however, require your host PC to be on.

CloudFire is integrated into iTunes, so anyone using iTunes for music and video and iPhoto for photos can easily share their files after downloading some software. Maurya classifies the service as peer-to-web, since the recipient of the files can view them through any browser, even on a mobile phone.

WiredReach has plans for an iPhone interface as well. Other than the obvious benefit of grabbing content from your PC while on the go, CloudFire can be used to share family videos and photos with distant relatives and for other, similar uses.

The service will be ad-supported for people who use their own computers as servers to host their content, but eventually CloudFire will have a premium caching service using Amazon’s S3 storage so people can offload large files for sharing. WiredReach already has a similar premium service used by its BoxCloud clients.

The site will open up for a private beta in a few weeks, and Maurya has promised to give GigaOM some invites, so check back for a chance to check out the service.

The hybrid P2P-CDN business model is becoming increasingly popular with content distributors, largely due to rapid growth in the demand for online video.

Even pure-play P2P companies like Pando have started dabbling with P2P CDNs. Content Delivery Networks (CDN) have become a highly competitive market, and existing players are trying to find ways to differentiate their offerings and stay above the commoditization fray.

This hasn’t gone unnoticed by investors. Grid Networks, a Seattle, Wash.-based company we first wrote about last fall, has raised $9.5 million in Series A Funding from Panorama Capital (see related disclosure at the end of the story).

The company, which was started by executives with rich experience in building Internet infrastructure, has developed its own unique P2P protocol, and a player that allows it to deliver HD-quality video as part of its GridCasting (managed Internet TV delivery) service. The company was co-founded by Jeff Payne (now CTO) who built the Real Broadcast Network for RealNetworks (RNWK) — arguably one of the first content delivery networks — and Noel Edmond.

Tony Naughtin, the recently appointed president and CEO of Grid, says the company is focusing on network operators and large content companies. They plan to embed their technology into network devices, set-top boxes and even consumer devices.

Grid wants to become a key P2P component of the cable networks. It uses CDN infrastructure to seed the video files, which can either be downloaded or streamed across the network. It isn’t, however, going to be easy for them — they’ll be competing with players such as BitTorrent, which has adopted a device-centric approach as well.

Elsewhere, Akamai (AKAM) is making a big push into the P2P-CDN business; VeriSign (VRSN) is looking to make a splash as well. Other players, such as Cachelogic, have been working with carriers and are already hawking their P2P-CDN offerings. CacheLogic, for instance, today announced that it is working with Babelgum, to deliver video over its Velocix Network, a P2P-CDN service that Cachelogic claims will radically change the economics of content delivery.

Disclosure: Grid Networks is funded by Panorama Capital partner Allan Leinwand, who is a guest columnist for GigaOM. Panorama has also backed Federated Media, which is our sales partner.

With great joy, we report sightings of new funding in the otherwise barren optical landscape. French DWDM vendor Ekinops raised $20 million; Acton, Mass.-based 40 Gbps gear maker Mintera Networks raised $19 million (and snagged a partnership with JDSU) from the likes of Polaris Ventures; and lastly Bangalore-based Tejas Networks raised $24 million from Goldman Sachs.

So finally, the news has been PR-sanitized. British Telecom (BT) has made it official that it is investing in Spanish Wi-Fi sharing service, FON, and will also make an investment in the company. I had reported this back in March, so am not quite surprised by the news. FON is having a big party in London to celebrate, and I am going to be there, if only to ask Martin Varsavsky the question: Is he really paying $8-to-$10 per BT customer who turns on the FON client? Now that is one way to spend the VC dollars and get a bigger footprint!

Martin’s blog post details the news. Also, some expanded thoughts from Connected Internet, which asks the relevant questions but gets no answers from BT. For instance:

• What will be the coverage targets be for BT FON?
• How much bandwidth will each BT FON customer be asked to share?

I will add one of my own: How does a BT-FON combo overcome the footprint issues? I have tried the FON routers and the usage experience… ahem!

Update: Varsavsky denies that BT is paying for FON client installs…and Om is doing some additional reporting and will update the post again shortly.

Large funding rounds for startups dabbling in optical technologies were a regular affair back in the late 1990s, but lately they’ve become about as common as a Bigfoot sighting.

Today, Mountain View, Calif.-based Matisse Networks announced that it has raised $45 million in fresh capital from Merrill Lynch PCG ($35 million) and existing investors Menlo Ventures, Walden Intl., Woodside Fund and Monitor Ventures. The latest round brings the company’s total funding to date to $80 million.

Matisse is targeting the metro networks with what it calls “optical burst switching” technology. It’s a combination of two boxes: one is a photonic switch, the other, an Ethernet switch (with packet smarts) that maps packets to wavelengths. Based on where the traffic is going and the quality of service associated with the packets, the system assigns a wavelength in less than 50 nanoseconds.

Sam Mathan (who in his past life started and sold Amber Networks to Nokia (NOK) for $421 million in July 2001), told us in an interview that Matisse’s products are ideal for those who are looking to replace SONET and other legacy technologies.

Large telecom carriers, thanks to the growing demand for bandwidth (driven in part by video), are showing an increasing interest in optical Ethernet technologies, prompting equipment vendors to build what analysts refer to as “optical networking platforms.” With the consolidation in the carrier market, the equipment vendors find themselves on the back foot these days, often making deals that defy logic.

Still, Matisse counts Alcatel-Lucent (ALU), Fujitsu (FJTSY) and Ciena (CIEN) among its competitors, and as such is going to have to its work cut out for it in trying to convince carriers to do business with a startup.

Related: * Cuban’s Theory & The Internet Infrastructure Questions. * Divergent fortunes for optical hardware makers.

First Fon, then Whisher and now WeFi - the start-ups focused on sharing of Wi-Fi connections keep on coming. Of course, each one has their own twist. FON does this through their own hardware (or by partnering with carriers), Whisher is a software only play. The latest entrant is WeFi, a LondonMountain View, Calif.-based company that has released a new software that allows you to find, and log into wireless networks. (Download it from here. Use this key: 07ApM81D3. The software is causing weird issues for some readers, so please be careful.)

The idea is that you will sign-up for the service, and become part of a large community of those willing to share your spots. If not, then just use the software for finding and logging into open wireless networks that are around you. You get to see the signal strength of the networks, and can also help you skip over the closed (secure) networks.

The other little twist is a map, which shows you where you can find a lot of free wifi connectivity. (Maps are somewhat of an advantage for WeFi, compared to Whisher who downloadable software has made improvements in recent months, and is available for Linux, Mac and Windows computers.) I like this feature, and it is only going to become more useful as more people start adding their spots. There is a friends-feature, adding a social networking twist to the software, but that is a bit too much, and frankly, I have some privacy concerns as well.

The simple, and eye pleasing interface (that mimics and IM client) makes this software worth having, especially if you are using Windows XP based computers that, to be honest are troublesome when it comes to finding-and-connecting to WiFi networks. (No surprise, the software currently works on Windows XP machines only.)

It is a good product, yet it seems WeFi is doing too much. Keeping it simple, and avoiding the social networking features, it can become a handy utility (and must visit destination) for digital nomads. It is worth trying out.

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