ORLANDO, Fla. -- Cisco Systems today officially disclosed its intention to buy the rest of Nuova Systems, the two-year-old subsidiary founded by Cisco veterans to develop Fibre Channel over Ethernet (FCoE) technology . Under terms of an agreement signed in 2006, Cisco will pay up to $678 million for Nuova, depending on how much revenue its products bring in.
Cisco also today unveiled the Nexus 5000 switch, which is part of its next-generation data center platform. Cisco described the switch, which will support FCoE, as a collaboration between Cisco and Nuova, and said it will have a price of $900 per port..
The acquisition of Nuova by Cisco is hardly surprising. Cisco invested $70 million in Nuova in August 2006 to it get up and running, and owned 80 percent of the company with an option to buy the other 20 percent. The Nuova team is led by Mario Mazzola, Luca Cafiero, Prem Jain, and Soni Jiandani – the same group behind Andiamo Systems, the company that developed Cisco's MDS Fibre Channel switches before Cisco acquired it in 2002.
Cisco expects to close the deal by the end of July. The payout will be made over three periods: the first ending late 2009, the second in mid-2010 and the third around the middle of 2011.
At SNW today, Cisco joined storage networking vendors Emulex and QLogic, chipmaker Intel and EMC and NetApp at a press conference to hype FCoE products. Emulex introduced the LightPulse LP21000 platform of converged network adapters that support FcoE; QLogic launched its 8000 series of FCoE-compliant converged network adapters; and Intel said that all its 10-Gigabit Ethernet adapters now support FCoE.
The vendors claim that FcoE will save money in the data center by reducing the number of cables, adapters and switches needed to run Fibre Channel and Ethernet networks. "FCoE is so simple," senior Nuova fellow Silvano Gai said. "One Fibre Channel frame in one Ethernet frame. Nothing else exists."
Ethernet is used in storage architectures through the iSCSI protocol. Although iSCSI is a small piece of the storage market compared to Fibre Channel, use of it has been growing rapidly, and vendors of iSCSI SANs expect to see a further bump in sales from greater availability of 10-GigE connectivity.
But Gai said Fibre Channel was a failure as a storage protocol in the enterprise, and FCoE is the best way to take advantage of 10-GigE. "We observed iSCSI for many many years, but it was not taking off," Gai said. "For huge data centers, people were looking for something different, and that is Fibre Channel over Ethernet.
The connectivity vendors predict FCoE will start showing up in data centers in the coming months. The FCoE standard is expected to be completed this year. Implementation also depends on the development of Enhanced Ethernet (also known as Data Center Ethernet), an emerging standard designed to give Ethernet the performance capabilities to run storage traffic. Enhanced Ethernet probably won't be ratified until 2009 but Intel general manager of LAN access Tom Swinford said he expects customers to go to FCoE this year because storage vendors will have interoperable products.
Gai agreed customers won't wait for Enhanced Ethernet ratification.
"I believe you'll have Fortune 500 companies using FCoE this year," Gai said.
Not everyone is so bullish about the timeframe. NetApp vice president Joe Reich said NetApp will support FCoE but pegged the beginning of FCoE adoption as the first half of 2009, because that's when operating system and server vendors will have FCoE compliant products.