Cisco Is Laying Off Nearly Everyone At Its Invicta Storage Business, Sources Say

Cisco is apparently throwing in the towel on its efforts to develop its own storage technology with its move to lay off most, if not all, of its Invicta storage team, according to former employees of Invicta.

One source told CRN that Cisco has let go 60 developers in its troubled Invicta storage business. A second source said Cisco cut the entire Invicta engineering department, and now has just a few people handling escalation and bug fixes.

Cisco neither confirmed nor denied the Invicta layoffs, but in an email response to a CRN query, responded in part that Cisco makes "regular, ongoing adjustments" to its strategy based on market changes.

[Related: Cisco's Chambers To Robbins: 'Chuck, I'll Be Your Wingman']

The possibility that Cisco laid off members of its Invicta team was first reported by the Register.

The Cisco Invicta business stemmed from Cisco's late-2013 acquisition of all-flash storage vendor Whiptail in a deal worth $415 million. The acquisition included fewer than 70 people, one source told CRN.

Cisco, mindful of its key relationships with most of the top storage vendors, including EMC and NetApp, said at the time of the Whiptail acquisition, and has since maintained, that the Whiptail technology would not be sold as a stand-alone storage solution but instead would be used as a storage acceleration technology for its Cisco UCS server line.

However, that technology, which Cisco renamed with the Invicta moniker, was in some cases made available as stand-alone storage. But in September 2014, Cisco quietly halted shipments of its Invicta storage line because of what Cisco characterized as "quality issues in deployments."

Cisco in March was prepared to start shipments of its long-delayed Invicta storage blade, and did restart shipments of the Cisco Invicta Scaling System all-flash array. However, Cisco solution providers contacted by CRN said they have not seen the products in the market.

In an emailed response to a CRN inquiry about the layoffs, a Cisco spokesperson wrote: "Digital disruption is happening fast, and companies need to change quickly. Cisco is no exception. As we prepare for the future, we are taking a balanced approach -- focusing on building our culture and people, while responding to market and business needs in localized areas. This means regular, ongoing adjustments to our strategy in specific parts of the business. By building a best-in-class culture with a sensible approach to financial management and resourcing, Cisco can best help our customers solve their biggest business problems."

The Cisco spokesperson also wrote that the company has no updates to any part of its business. "In the event of an update to our markets, product portfolio or workforce, we would be committed to communicating with our employees and affected customers first and foremost," the spokesperson wrote.

Solution providers told CRN they would not be surprised if Cisco dropped its Invicta business.

Cisco never got any traction with its Invicta business, said John Woodall, vice president of engineering at Integrated Archive Systems (IAS), a Palo Alto, Calif.-based solution provider and longtime Cisco channel partner.

"It took them this long to drop Invicta?" Woodall told CRN. "If it's true, it doesn't surprise me. But now it raises the question of what if anything will Cisco do in the storage space, including making another acquisition."

Woodall said the move to drop its Invicta team would fit in with an overall streamlining Cisco has been doing for some time, and which has been continuing as Cisco transitions to its incoming CEO, Chuck Robbins.

This includes Thursday's move to sell its set-top business to Technicolor, as well as the 2013 sale of its Linksys networking business to Belkin and the 2011 shut-down of its Flip camera business.

"Cisco is streamlining its business," Woodall said. "Cisco is good at doing things to themselves before someone else does it to them."

Tom Holt, vice president of sales at Bedrock Technology Partners, a San Diego-based solution provider and longtime Cisco partner, said storage partnerships in general have a short lifespan and eventually end, and so Cisco will have to do something as its relationships with EMC, NetApp and others evolve.

"If you are going to have a long-term storage strategy, either you acquire the technology or you grow it organically," Holt told CRN. "Cisco doesn't have an organic path. So I think it will need to acquire a company."

If it's done right, Cisco could bring a successful storage technology to market with its UCS server business, Holt said.

"Cisco has done well with UCS," he said. "And storage in one way is not that different from servers. The infrastructure to support them [is] about the same. It's the same distributors, the same support constructs. So Cisco is well-suited to invest in an established storage company."

PUBLISHED JULY 23, 2015