Cisco Partners: Acquiring Hyper-Converged Startup Springpath Would Make Ton Of Sense

Springpath, a hyper-converged infrastructure startup founded by former VMware engineers, recently pulled out of two industry events and parted ways with its PR agency, raising questions about its future direction, according to a report from The Register.

The moves are rekindling long-running speculation in the Cisco channel that the networking giant is planning to unveil an acquisition or strategic partnership with Springpath, which emerged from stealth in February with $34 million in funding.

"Cisco needs a good non-hardware-specific hyper-converged infrastructure offering, and Springpath is a good one," said one longtime Cisco partner, who didn't want to be named. "Springpath is pretty new, but customers like [the technology]. They also have good differentiation against the other me-too software-only hyper-converged infrastructure offerings."

[Related: Cisco's Hyper-Converged Strategy Is To Partner, Not Acquire, Says CEO Chuck Robbins]

Springpath couldn't be reached for comment through its website. A Cisco spokesman said the company doesn't respond to rumors or speculation.

Springpath, founded in 2012, is the latest hot startup founded by former VMware employees. Its co-founders, Mallik Mahalingam (chief technology officer) and Krishna Yadappanavar, both worked as engineers at VMware, helping to create such key technologies as VMFS (Virtual Machine File System) and VXLAN (Virtual Extensible LAN).

Springpath is a relative youngster in the hyper-converged space, which refers to software that enables compute, storage and networking to run on industry-standard x86 server hardware.

Cisco partners with nearly every major and second-tier storage vendor in developing converged infrastructure solutions, with Hewlett Packard Enterprise and Dell being the major exceptions. But Cisco still doesn't have a hyper-converged play of its own, and its partners are eager to see how it plans to address this potential-rich market.

Cisco does have an existing strategic partnership with SimpliVity -- a startup widely regarded as the No. 2 player in the hyper-converged space -- but sources told CRN recently that the relationship hasn't been generating the level of sales that the vendors had anticipated.

Cisco in May was also reportedly talking with Nutanix, top dog in the hyper-converged space with more than $312 million in funding, but those discussions didn't result in an acquisition. Nutanix inked an OEM agreement with Dell last year and unveiled a similar deal with Lenovo last month.

Another longtime Cisco partner told CRN that acquiring Springpath would give the networking giant a solid foothold in the hyper-converged market.

"I think Springpath would fit well into Cisco’s portfolio and would be a great answer to Nutanix," said the partner, who didn't want to be named. "Cisco is getting attacked from the converged side with the Dell purchase and Nutanix from the hyper-converged, so this would be a good answer to half the problem."

Whether Cisco pulls the trigger on a Springpath acquisition remains to be seen, but partners would like to see new CEO Chuck Robbins make a calculated hyper-converged bet, and they believe Springpath would be a solid pick.

PUBLISHED DEC. 7, 2015