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Cisco Takes On Topspin

Cisco Systems Inc. (Nasdaq: CSCO) today acquired Topspin Communications Inc. (Nasdaq: CSCO) for $250 million in cash and options in an attempt to boost its data center story (see Cisco Buys Topspin for $250M).

Data centers are growing in complexity at the moment, and users are increasingly looking to share data across emerging technologies such as blade servers and computing grids. Cisco is now looking to meet this demand through Topspin's server fabric switches, which offer both virtualization and a range of interconnects, including the much-hyped InfiniBand.

David Freund, analyst at Illuminata Inc., believes the deal could give InfiniBand a much needed lift. With its low latency and high bandwidth, the technology was seen by some industry experts as ideal for certain data center applications and storage interconnects. However, most organizations find Fibre Channel adequate for their storage needs, and InfiniBand has so far been consigned to supercomputing clusters.

It would seem to indicate that Cisco is treating InfiniBand as something with real potential,” says Freund. Today’s deal could prove a watershed event, he adds, providing a major impetus to the rollout of InfiniBand technologies.

Then there is Topspin’s virtualization, which Freund also identifies as a key part of the deal. Topspin’s ability to virtualize a range of data center technologies has been attracting a great deal of attention over recent months, and there has been speculation that the firm could get snapped up by a larger vendor or even go for an IPO (see VC Predicts Virtual Upheaval and IPO Talk Twirls Around Topspin).

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