Cisco has taken another step away from its old hardware-first model towards software-defined networking (SDN) with the acquisition of Springpath, a developer of distributed file-systems for hyperconvergence and an existing technology partner of Cisco’s.
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The two firms have previously worked together to launch one of the industry’s first fully integrated hyperconverged infrastructure (HCI) systems, HyperFlex, and have already aligned their product and go-to-market strategies. Cisco also led Springpath’s series C funding round through its investments arm.
Cisco now wants to acquire the business outright as it continues to grow its compute business and push its customers towards software-defined infrastructure and next-generation datacentre systems.
“This acquisition is a meaningful addition to our datacentre portfolio and aligns with our overall transition to providing more software-centric solutions,” said Rob Salvagno, Cisco vice-president of corporate business development.
“Springpath’s file system technology was built specifically for hyperconvergence, which we believe will deliver sustainable differentiation in this fast-growing segment.”
Cisco claimed it had already picked up around 1,800 customers for Hyperflex during the past year, as it eyes up a slice of the hyperconverged infrastructure space, which could be worth up to $6bn by 2020, according to IDC.
The supplier has forked out $320m in cash and assumed equity for Springpath, and expects to close the acquisition during the current quarter, at which point it will be folded into Cisco’s Computing Systems Product Group under Liz Centoni.
Cisco’s pivot away from networking hardware, which has been its bread and butter for more than two decades, has gathered a head of steam since current CEO Chuck Robbins took over from his long-standing predecessor, John Chambers, in 2015.
Up to that point Cisco often found itself accused of missing the transition to SDN, and remaining too focused on traditional networks as customers began to pull compute, networking and storage out of their previously distinct silos. This was in spite of it having launched its datacentre SDN line, ACI, in the summer of 2014.
Nevertheless, Robbins’ drive towards SDN and hyperconvergence is taking a while to sink in, and Cisco has suffered through several straight quarters of declining revenues as its switching lines drop off.
In its most recent set of results, its quarterly revenues dropped by 4% year-on-year to $12.1bn, and its full-year revenues were down 2% to $48bn.