Cisco’s storage M&A reboot

Contact: Henry Baltazar, Liam Rogers, Scott Denne

Following an impulsive and failed marriage, Cisco has opted for a long courtship for its second commitment in the storage market. The networking giant has paid $320m for Springpath, a maker of hyperconverged infrastructure (HCI) software and a longtime Cisco partner.

Cisco led Springpath’s $34m series C round in 2015 and the next year launched its HCI appliance, HyperFlex, built with Springpath’s software. A patent infringement lawsuit brought by rival SimpliVity may have delayed the consummation of this deal, as its final status is still unclear. As we wrote in an earlier report, HyperFlex sold well and demonstrated an ability to bring new customers to Cisco. In a 451 Research Voice of the Enterprise survey, 18.3% of IT professionals were using Cisco HyperFlex, behind only converged offerings from VMware and Dell-EMC.

By contrast, its last foray into storage was the $415m purchase of all-flash array vendor WHIPTAIL, which offered a product that was meant to compete with several of Cisco’s then partners and had only gained traction with about one-quarter as many enterprises as Springpath has reached on Cisco’s servers, where it is exclusively sold.

For more real-time information on tech M&A, follow us on Twitter @451TechMnA.