Cisco to invest in NeoPath for file virtualization

Cisco is expected to make a strategic investment in NeoPath Network imminently, continuing the shakeout in the file virtualization market.

Cisco Systems Inc. is expected to announce soon a strategic investment in file virtualization startup, NeoPath Networks Inc. and is also in discussions to OEM the product, according to industry sources. Details of the investment were not available.

The news comes a month after Brocade Communications acquired NuView Inc., and almost eight months after EMC's acquisition of Rainfinity. All three deals highlight the increasing demand by users for better management of enterprise file storage.

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"Cisco will resell NeoPath on a blade … [and] will make a strategic investment in NeoPath, gaining a right of first refusal on the company," according to an insider familiar with the deal who preferred to remain anonymous. A spokeswoman for NeoPath confirmed that the two companies are finanlizing an investment, but said rumors of negoitiations around an OEM deal were not true.

NeoPath's File Director product is an in-band appliance that creates a virtualization layer between a user's clients and file servers, decoupling the file name paths from their physical locations. This means users don't need to know which particular file server holds their data and administrators can more easily manage existing servers. Instead of having unused or underutilized storage trapped in isolated NAS or file server "silos," file storage capacity can be pooled and used efficiently.

An analyst familiar with the deal who declined to be named said a blade will be the eventual form factor for this technology "which Cisco can use on the Catalyst and MDS switches … NeoPath has a lot of attraction to big vendors as it is easy to port to any x86 architecture." However, initially he said the product will most likely be sold as a standalone appliance.

NeoPath has around 40 customers, but only starting selling its product through the channel last summer. Storage reseller SANZ Inc. picked NeoPath over the competition for price reasons, according to CTO George Crump. NeoPath sells the FD-220 for $40,000 for a single-node system and $70,000 for a two-node clustered pair.

The Mountain View, Calif.,-based company announced this month that the application hosting division of software developer Blackboard Inc. bought the NeoPath File Director to manage 100 terabytes of storage across three data centers. "It allows us to transparently move data between file servers and NAS devices without impacting performance levels or disrupting millions of [users]," said Ahmar Abbas vice president, Blackboard ASP.

NeoPath's closest competitor, Acopia Networks Inc, provides more functionality than most file virtualization products, such as snapshots and replication, taking away this capability from the underlying filers. NeoPath meanwhile, is more like a router, directing packets, analysts said.

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