Cisco bought a lot of companies this year, but the focus was mostly on software for the market leader in switches and routers. The acqusitions, included software players that help improve security of Cisco’s core offerings and also companies that have developed products for the VoIP marketplace. 2004 acqusitions include Protego, BCN Software, Jaki Networks, NetSolve, P-Cube, Dymanicsoft, Perigo, NetSolve, Parc Technologies, Actona Technologies, Twingo Systems, Riverhead Networks, Procket Networks, and Latitude Communications,. Only Procket was a hardware vendor. Perhaps like all hardware vendors, Cisco is realizing that the future is software, not hardware which is becoming increasingly commoditized. Oligopoly Watch writes

It’s possible to see Cisco as an engine for acquisitions, swallowing up nearly all the new relevant ideas that pop up in small start-ups, then integrating those ideas into its product line. Many of the acquisitions have been relatively inexpensive, though over the years that have been several multibillion dollar deals, including those for companies like Cerent and ArrowPoint Communications.

John Chambers’ has given an indepth interview to Computer World in which he talks about the future of Cisco and where his company might go next. Virtualization (which is mostly through software) is high on his priority list.