Cisco invested $70 million in Nuova Systems

By Paula Musich  |  Posted 2008-04-08 Print this article Print

The Nexus 5000 Series switch will provide an aggregate switching capacity of 1.12TB per second, compared to the Nexus 7000's 15TB per second.

The Nexus 5000 offers the potential for a better fit for SAVVIS compared to the Nexus 7000, said Doerr. "We have been looking for good complement to our existing Cisco core (Catalyst 6500) Layer 2 switch in the data center. The Nexus 7000 has a different appeal for a different market. The 5000 because of its integration of management planes is a real advantage," he said.

That advantage is in reducing the amount of knowledge and expertise required to configure and support different network interface technologies. FCOE as supported by the Nexus 5000 allows us to start reducing those by giving us one interface to the server, instead of Fibre Channel and Ethernet out of the server, now we have one interface that support Fibre Channel protocols and Ethernet network I/O protocols," said Doerr.

Cisco had initially invested $70 million in Nuova Systems, but the full payout with the remaining 20 percent acquisition could climb to as much as $678 million over the next several years.

The amount will depend on the success of the product and be paid out over three payment periods. Nuova will operate as an independent subsidiary, with Mazzola, Jain and Cafiero reporting directly to Cisco CEO John Chambers. The acquisition is expected to close in Cisco's fourth fiscal quarter of 2008.

Cisco's strategy in helping to fund Nuova's development follows a similar tack Cisco took in funding a startup that ultimately provided the company with a SAN switch, noted industry analyst Zeus Kerravala at the Yankee Group.

"They create spin off with former Cisco execs with no obligation, no risk. This was no surprise that they acquired the rest of Nuova. It's a forgone conclusion they would acquire them. This product was destined to be a Cisco product from the moment they opened shop," he said.

The Cisco Nexus 5000 Series is due in May and will start at $36,000.



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