Cisco forks out $400M for Springpath in hyper-convergence push

Cisco forks out $400M for Springpath in hyper-convergence push

The deal represents a culmination of a long-standing strategic relationship between Cisco and Springpath

Cisco is set to pay just over $403 million (US$320 million) to acquire hyper-convergence software provider, Springpath.

The networking vendor revealed its intent to acquire California-based Springpath on 21 August, with the proposed deal representing a culmination of a long-standing strategic relationship between Cisco and Springpath.

The companies have worked together since early 2016, launching HyperFlex, a fully integrated hyper-converged infrastructure system. Since then, they have aligned on product development and go-to-market strategies.

Indeed, Cisco’s relationship with Springpath began back in 2012, according to Cisco corporate business development vice president, Rob Salvagno, when the Cisco team first met Springpath founder and CTO, Mallik Mahalingam, shortly after he had started the company.

“Mallik…had a great vision on how Springpath was going to revolutionise the data centre through its innovative Springpath data platform,” Salvagno said in a blog post.

“We stayed connected with the team as they executed on this vision and in 2015 decided that Cisco Investments would lead Springpath’s Series C financing round, coupled with a joint go-to-market agreement.”

According to Cisco, Springpath’s distributed file system is purpose-built for hyperconvergence, enabling server-based storage systems. It is hoped that the acquisition will allow Cisco to continue delivering next-generation data centre innovation.

"Springpath's file system technology was built specifically for hyper-convergence, which we believe will deliver sustainable differentiation in this fast-growing segment. I'm excited to be able to provide our customers and partners with the simplicity and agility they need in data centre innovation,” Salvagno said.

“This acquisition is one more example of Cisco’s shift towards providing more software-centric solutions. The Springpath team will join the Computing Systems Product Group led by Liz Centoni," he said.

"We expect the acquisition to be completed in the first quarter of fiscal year 2018."

Cisco will acquire Springpath for US$320 million in cash and assumed equity awards, plus additional retention-based incentives.

The acquisition is expected to close in Cisco's first quarter of fiscal year 2018, following customary closing conditions and regulatory review.

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