The $7.4 billion acquisition of Cerent Corp. of Petaluma, Calif., and Monterey Networks Inc. of Richardson, Texas, signals the entry of the San Jose, Calif.-based Cisco Systems Inc. into the multimedia-network ring. Cisco, which controls about 85 percent of the global market in computer network routers and switches, has claimed a share of the optical network market with the deal.

Cerent produces the Cerent 454, an optical transport platform for cable, phone and Internet providers that moderates communication between copper and fiber optic networks. It has reported only $10 million in sales and has not operated with a profit in the 2 1/2 years it has been in business. Its clients include Quest Communications and Frontier Corp.

Monterey developed the Monterey 20000 Series Wavelength Router, which provisions and restores end-to-end paths of long-haul optical pipes. The company also offers software for the engineering and management of network traffic that reduces the need for intermediate switches.