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By | Ashlee Vance 14th April 2005 16:18

Cisco eyes the server with $250m Topspin buy

Deep data center invasion

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Cisco Systems has stretched even deeper into the data center by agreeing to acquire once high-flying server startup Topspin Communications.

Cisco will shell out close to $250m in cash and options for Topspin with the deal expected to close by July, pending standard approvals. The buy fits in with Cisco's core networking strategy in that the Topspin gear works as a type of intelligent switch sitting between many server and storage systems. Cisco, however, appears to be sending a message to rivals and partners that it's looking to handle more of the server and storage management functions than those dealt with by its current networking gear.

"The widespread adoption of server architectures such as blades, grid computing, and clustered applications is driving an emerging market opportunity within the data center," said Luca Cafiero, a SVP at Cisco. "As our customers build out these new computing environments, it is important that we deliver server networking technologies to fit their needs."

It's no secret that storage switch makers like Cisco, Brocade and McData have been looking to play a more major role in the data center. They're all coming out with "intelligent" networking products loaded with sophisticated software. This gear can perform some of the management functions typically done by a server or storage box.

With Topspin, Cisco kicks the play up to a whole new level.

The startup gained a lot of attention about two years ago when it jumped on the virtualization craze. Topspin's products could sit in a rack and look out over numerous servers. The hardware creates the fabled "pool" of server resources and connects that pool to storage systems. Basically, Topspin let administrators manage lots of hardware from a single, abstracted point.

Companies such as IBM, Dell, HP and Sun Microsystems have all shown interest in Topspin and partnered with the startup on projects. However, we've never run into too many Topspin customers. And the start-up has lost some of its luster in the last couple of years.

Cisco will now be able to complement its Ethernet and Fibre Channel switches with a pretty damn smart box. It's not hard to see Cisco building out more and more management software over time and trying to control the virtualization rush from a networking angle. ®

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