Cisco to Buy Springpath for $320 Million

By Maria Armental and Rachael King

Cisco Systems Inc. said Monday it plans to buy Springpath Inc., an early partner in the so-called hyperconverged-systems market, as part of a shift to selling software and services to help turn around the struggling company.

Hyperconvereged systems, a fast-growing segment within the otherwise struggling server market, combine data storage and computing in a single box, allowing companies to reduce costs in operating data centers.

The Springpath deal, which will cost Cisco $320 million in cash and assumed equity awards, is expected to close later this year. The acquisition follows Hewlett Packard Enterprise Co.'s announcement in January it would spend $650 million to buy data-storage startup SimpliVity Corp. Another Springpath competitor, Nutanix Inc., went public last September, the same month that Dell Technologies Inc. acquired EMC Corp., whose products include hyperconverged technologies.

Springpath, formerly known as Storvisor and founded in 2012 by VMware Inc. veterans, has been working with Cisco for several years on its data-center technologies.

Springpath's software turns standard servers into a pool of compute and storage resources, eliminating the need for hardware dedicated to each purpose. The software lets companies use hardware more efficiently in their data centers.

In collaboration with Springpath, Cisco last year launched its HyperFlex platform for data-center customers.

"As one team, I am excited for the synergistic possibilities ahead to redefine hyperconvergence further and deliver seamless multicloud experiences," wrote Liz Centony in a Cisco blog post. Ms. Centony leads the computing systems product group that would feature Springpath.

Springpath co-founders Mallik Mahalingam and Krishna Yadappanavar are expected to remain with Cisco after the deal closes.

Write to Maria Armental at maria.armental@wsj.com and Rachael King at rachael.king@wsj.com

(END) Dow Jones Newswires

August 21, 2017 16:27 ET (20:27 GMT)

Cisco Systems (NASDAQ:CSCO)
Historical Stock Chart
From Mar 2024 to Apr 2024