Cisco enters data storage business with Whiptail acquisition

Cisco Systems Inc, the world's biggest telecom networking company, yesterday entered the data storage business by paying $415 million to acquire privately held flash storage system maker Whiptail.

Under the terms of the agreement, Cisco will pay around $415 million in cash and retention-based incentives. 

Founded in 2008 and based New Jersey, privately-held Whiptail makes storage systems based on flash memory chips.

Whiptail designed the use of NAND flash memory as a replacement for the traditional disk drive storage systems and allows large volume of data to move fast through servers.

''We are focused on providing a converged infrastructure including compute, network and high performance solid state that will help address our customers' requirements for next-generation computing environments," said Paul Perez, vice president and general manager, Cisco Computing Systems Product Group. 

"As we continue to innovate our unified platform, Whiptail will help realise our vision of scalable persistent memory which is integrated into the server, available as a fabric resource and managed as a globally shared pool," he added.

With this acquisition, Cisco will enter the $50 billion enterprise storage industry, but it hamper its existing partnerships with data storage equipment companies EMC and NetApp, both of whom make storage systems based on flash memory chips.

Post completion of the deal, Whiptail employees will be integrated into the Computing Systems Product Group of Cisco led by Perez.

California-based Cisco, one of the most acquisitive companies in the technology industry, has spent more than $4 billion this year on 12 acquisitions and more than $18 billion on around 70 acquisitions since the past five years.