Cisco pumps up data center business with $320m Springpath acquisition

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Cisco has announced its intention to acquire hyperconvergence software vendor Springpath for $320 million in cash.

Springpath has developed a distributed file system purpose-built for hyperconvergence that enables server-based storage systems. Cisco and Springpath have been working together since early 2016 to launch HyperFlex, billed as the industry’s first fully integrated hyperconverged infrastructure system. Since then, they have fully aligned on product development and go-to-market strategies.

Cisco says the acquisition will allow it to continue to grow its computing business, enabling more customers to realize the benefits of simple and economic software-defined infrastructure.

“This acquisition is a meaningful addition to our data center portfolio and aligns with our overall transition to providing more software-centric solutions,” said Rob Salvagno, Cisco’s 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.”

Salvagno noted in a blog post that hyperconverged infrastructure is projected to be a $6 billion business by 2020, according to IDC, and is the fastest growing segment in the data center space. He added that Cisco has generated significant momentum with Hyperflex over the last year, garnering more than 1,800 customers. 

In addition to the $320 million cash transaction, the deal includes assumed equity awards, plus additional retention-based incentives.

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

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