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Cisco buys Springpath, brings HCI software in-house

Cisco re-confirmed its hyper-converged infrastructure strategy today by acquiring its HCI software partner Springpath for $320 million.

The Cisco HyperFlex HCI appliance consists of Springpath software bundled on Cisco UCS servers. Cisco became an investor in Springpath and signed an OEM deal with the startup in 2015, and launched Cisco HyperFlex in 2016. Cisco claims more than 1,800 HyperFlex customers.

Springpath sells software that powers hyper-convergence and competes with HCI software stacks from VMware (vSAN) and Nutanix.

The Cisco-Springpath deal should put an end to rumors that Cisco will buy market leader Nutanix, which would cost billions of dollars.

While disclosing the Springpath deal, Cisco identified hyper-convergence as the fastest growing data center market. It is also highly competitive. Cisco HCI rivals include Nutanix and the other major server players, Dell Technologies, Hewlett Packard Enterprise and Lenovo. Dell has the greatest HCI presence of server vendors. It owns VMware, sells vSAN-based Dell EMC VxRail appliances and also sells Dell EMC XC appliances running Nutanix software through an OEM deal. Lenovo has a similar OEM deal with Nutanix and resells other HCI software on its servers, and HPE acquired SimpliVity for $650 million last January for its ProLiant-based HCI platform.

Cisco expects the Springpath to close by the end of October. The Springpath team will become part of Cisco’s Computing Systems Product Group.

Liz Centonti, SVP and GM of the Computing Systems Product Group, addressed the acquisition in a blog today.

“The acquisition of Springpath is strategic to our data center portfolio as we transition to delivering software-centric solutions to our customers,” she wrote. ‘‘As one team, I am excited for the synergistic possibilities ahead to redefine hyper-convergence further and deliver seamless multi-cloud experiences for our customers.”

Given Cisco’s relationship with Springpath, the acquisition is not surprising. Still, Springpath has not been Cisco’s exclusive HCI software partner. Cisco sells vSAN-based Ready Node appliances and also resold SimpliVity software before HPE’s acquisition. And before Nutanix became a public company, there were rumors that Cisco would acquire the HCI pioneer.

The Cisco-Springpath deal may affect VMware and Nutanix in the HCI market. Now that Cisco owns its entire HCI stack, it has more incentive to sell HyperFlex instead of UCS with vSAN software. Nutanix has partnerships with Cisco resellers to package its software on UCS boxes. That arrangement does not directly involve Cisco, but Nutanix CEO Dheeraj Pandey would like to to persuade Cisco to work more closely with his company. The Springpath deal doesn’t kill that possibility, but certainly doesn’t help it.

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