News Release

Cisco Systems to Acquire Precept Software Inc.

Expands Offerings for Integration of Voice, Data and Video Solutions
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Mar 11, 1998

SAN JOSE, Calif. -- March 11, 1998 -- Cisco Systems, Inc. today announced it has signed a definitive agreement to acquire privately-held Precept Software, Inc. of Palo Alto, California. Precept is a leading multimedia networking software company.

Based upon Ciscos March 11 closing price of $62.63 the stock exchanged would have a value of approximately $84 million. Under the terms of the acquisition, between 1.15 and 1.35 million shares of Cisco common stock will be exchanged for all outstanding shares and options of Precept Software. The transaction will be accounted for as a pooling of interests. Cisco has held a minority equity interest in Precept since April 1996. The acquisition has been approved by the board of directors of each company and is expected to be completed by April subject to various closing conditions.

Cisco Increases Leadership in Multimedia Networking

The acquisition complements Ciscos strategy of developing networking solutions that integrate voice, data and video traffic. Precepts IP/TV product is a client/server application that sends live or pre-recorded digital video and audio to a large number of users over any IP-based local- or wide-area network.

Precepts technology will be incorporated into Cisco offerings for both the enterprise and service provider markets. Cisco will continue to sell Precepts IP/TV product, delivering video solutions to enterprise networks for use in such applications as training and distance learning. Additionally, Cisco will build on Precepts IP/TV technology to enable service providers to create a network infrastructure that will support integrated voice, video and data solutions and help enable deployment of network multimedia applications.

This acquisition will enable Cisco to integrate multicast, quality of service, streaming video and network management technologies to create a network platform for delivering high-quality video over IP. Precepts technology will complement Ciscos work with the Networked Multimedia Connection, a joint program announced in 1997 with Intel Corporation and Microsoft.

Precept was founded in 1995. The 50 employees will become part of Ciscos IOS technology group and sales organization. Precepts products will be distributed through Ciscos sales force.Simultaneously today, Cisco also announced the appointment of Precepts president and CEO, Judith Estrin, to senior vice president and chief technology officer.

About Cisco Systems

Cisco Systems, Inc. (NASDAQ:CSCO) is theworldwide leader in networking for the Internet. News and information areavailable at http://www.cisco.com.

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This release may contain forward-looking statements that involve risks and uncertainties. These statements 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 potential fluctuations in quarterly results, dependence on new product development, rapid technological and market change, acquisition strategy, manufacturing risks, risks associated with the Internet infrastructure, volatility of stock price, financial risk management and future growth subject to risks.