Cisco Systems Inc. (Nasdaq: CSCO) is buying hyperconvergence software developer Springpath Inc. for $230 million in cash. Hyperconverged technology combines storage and networks into a pre-configured system that is managed by "user-friendly" software and usually doesn’t require a lot of IT support.
Springpath, based Sunnyvale, California, provides storage and data management software for enterprise companies. The target offers storage services and software that runs on a variety of standard servers. Springpath Inc. was formerly known as Storvisor Inc., and changed its name to Springpath Inc. February 2015.
"This acquisition is a meaningful addition to our data center portfolio and aligns with our overall transition to providing more software-centric solutions," states 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."
The deal for Springpath comes after the two companies have built a strategic business partnership since 2016. Cisco led the target’s $34 million series C funding round in 2015 and even worked to coproduce Cisco’s HyperFlex system. Cisco, headquartered in San Jose, California, is one the world’s biggest manufacturers of networking technology. The transaction is expected to close in the first quarter of fiscal year 2018.
While Cisco has been quite active lately, businesses turning to SaaS (software-as-a-service) has been one of the key drivers in tech M&A. Recent acquisitions by Cisco include: the buying of Viptela Inc, a software-defined wide area network company; the purchase of AppDynamics, a software provider for fine-tuning business systems, for $3.7 billion; the acquisition of ContainerX, a developer of data management technology; and the deal for Jasper Technologies Inc. for $1.4 billion.