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April 17, 2005

Cisco buys InfiniBand specialist Topspin for $250m

Networking equipment giant Cisco Systems has agreed to pony up around $250m in cash and stock to acquire InfiniBand switching specialist Topspin Communications. Topspin is one of a handful of companies that have productized the InfiniBand switch fabric architecture for linking servers together, which was championed by IBM, Intel and others but left to fend for itself against competing technologies.

By CBR Staff Writer

For Cisco, which has aspirations in the data centers and research centers of the world, the acquisition of Topspin is as much an offensive as it is a defensive move. Topspin has inked distribution and partnership agreements with IBM, Dell, Hewlett-Packard, Sun Microsystems and NEC, and these vendors can sell Topspin’s InfiniBand adapter cards as well as its InfiniBand server switches, which are an intriguing technology that Topspin is trying to peddle as a platform for both scientific and commercial grid computing.

Because of the networking nature of Topspin’s InfiniBand products, it is in some ways a natural fit for Cisco, which also has key partnerships with all of the major server players. However, the server virtualization, provisioning, and clustering aspects of Topspin’s server switches and VFrame software now put Cisco (as was Topspin before Cisco ate it) somewhat in contention with the server makers who have their own SMP servers and virtualization for them.

Since last fall, Topspin has been trying to reposition itself as a grid utility vendor instead of just a maker of InfiniBand switches and adapters. In October 2004, the company announced a Grid to Go bundle of its InfiniBand gear to promote the idea of creating a grid using InfiniBand as the interconnect between clustered servers. The full-rack version of the Grid to Go bundle included one Topspin 360 Server Switch, which can support up to 24 InfiniBand-attached servers and has up to 12 expansion slots for Ethernet and Fibre Channel gateways.

The Ethernet gateways are used to connect end users to the cluster, while the Fibre Channel gateways are used to connect servers to SAN-based storage arrays. The bundle also includes a Topspin EX Ethernet Gateway, which has six Gigabit Ethernet ports, which can also be used to link to NAS disk arrays as well as to end users of the cluster, plus one Fibre Channel Gateway, which has two 1Gbps or 2Gbps ports, 24 of Topspin’s PCI-X 10 Gbps InfiniBand host adapters, 24 InfiniBand cables, and a 25 node license to the VFrame software. This bundle costs $64,995. Customers have to buy their own servers to make use of this InfiniBand gear, of course. The VFrame software can provision and manage Windows or Linux servers.

Cisco said that the Topspin acquisition will give it a chance to provide server-based switching, which will complement its existing network switching and storage switching offerings, including the Catalyst Ethernet-based switching products for intranets and Internet infrastructure and its Multilayer Datacenter Switch for Fibre Channel, FCIP, iSCSI, and FICON storage area networks. Now Cisco can offer end-to-end switching in the data center.

It is unclear if Topspin–which was founded in April 2000, which is privately held and which has raised $67m in three rounds of venture funding–needed the Cisco deal to be able to better push InfiniBand technologies (it may have run out of money or muscle) or if Cisco needed Topspin so much that it made it an offer it could not refuse.

It is probably a little of both factors that drove these two companies together. Topspin’s CEO, Krish Ramakrishnan, used to be vice president and general manager of Cisco’s content business unit, which made load balancers, cache servers, and various content delivery solutions; prior to that, he was the founder of a company called Internet Junction, which he sold to Cisco in 1995.

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Topspin was founded by Ross Schibler, who invented the first silicon-based IP router and founded a company called Rapid City Communications in 1996; this company created the first Gigabit Ethernet routing switch, and was promptly bought by Bay Networks, which then merged with Nortel Networks. Topspin’s other founder, Keith Wilkinson, was a chief architect at Lucent Technologies. Topspin has about 130 employees, and almost certainly has a lot less annual revenue than Cisco just paid to acquire the Mountain View, California company.

Topspin was clearly on the road to an initial public offering within the next few years (provided that sales ramped up), but being acquired by Cisco is a whole lot easier and quicker. Topspin will be folded into Cisco’s Data Center, Switching and Wireless Technology Group, which is led by senior vice president Luca Cafiero. The company expects to close the Topspin acquisition by July 30.

The question now is how long Voltaire Inc and InfiniCon Systems, the two other providers of InfiniBand connectivity focused on grid technology, will remain free agents. While Brocade Communications Systems and McData have plenty of heat coming their way in the storage switching market, they cannot afford to play around in the server space like Cisco clearly can, especially with InfiniBand being a largely untested but respectable technology for lashing servers together. That said, if either company thought InfiniBand interconnect for servers was going to have a future, now would be the time to make a move on Voltaire and InfiniCon, before Cisco or someone else snaps them up, too.

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