And Another SSD Start-Up to Be Acquired: Whiptail

For $415 million by Cisco

This is a Press Release edited by StorageNewsletter.com on September 12, 2013 at 2:42 pm

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Cisco Systems, Inc. intents to acquire privately held Whiptail Technologies, Inc., in high performance, scalable solid state memory systems that enable organizations to simplify data center and virtualized environments and process more data in less time.

Based in Whippany, NJ, Whiptail will strengthen Cisco’s Unified Computing System (UCS) strategy and enhance application performance by integrating scalable solid state memory into the UCS’s fabric computing architecture.

New breeds of applications such as virtual desktops and data analytics are imposing increased performance demands on traditional storage array systems. Bridging the gap between increased application performance demand from servers and what traditional storage systems can deliver, requires that solid state memory systems be brought closer to the application. With the acquisition of Whiptail Cisco is evolving the UCS architecture by integrating data acceleration capability into the compute layer.

Integrating Whiptail’s memory systems with UCS at a hardware and manageability level will simplify customers’ data center environments by delivering the required performance in a fraction of the data center floor space with unified management for provisioning and administration.

"We are focused on providing a converged infrastructure including compute, network and high performance solid state that will help address our customers’ requirements for next-generation computing environments," said Paul Perez, VP and GM, Cisco computing systems product group. "As we continue to innovate our unified platform, Whiptail will help realize our vision of scalable persistent memory which is integrated into the server, available as a fabric resource and managed as a globally shared pool."

UCS’s architectural advantages such as built-in automation and high performance fabrics complement Whiptail’s high performance data services. UCS and Whiptail, together with Cisco Nexus data center switches, will accelerate Cisco innovation and momentum in the converged infrastructure.

Upon completion of the acquisition, Whiptail employees will be integrated into the Computing Systems Product Group led by Perez.

Under the terms of the agreement, Cisco will pay approximately $415 million in cash and retention-based incentives in exchange for all shares of Whiptail.

The acquisition of Whiptail is expected to be complete in the first quarter of fiscal year 2014, subject to customary closing conditions.

Comments

Cisco entered into storage connectivity around 2000 with the acquisition of NuSpeed for something around $450 million and spent a lot of money in this field - Andiamo costs as much as $750 million. The Ethernet leader wanted to be also in the growing market of FC and FCoE storage networking - now with several MDS9000 switches and directors - but faced several competitors, especially Brocade, QLogic and Emulex.

This activity is going down. For its fiscal year ended year ended July 27, 2013, the company stated: "Product revenue in the switching category was also negatively impacted by a 24% decrease in sales of storage products."

After deciding to manufacture servers, Cisco is going for the first time with Whiptail's acquisition in the storage subsystems market where the competition is ferocious (EMC, NetApp, IBM, HDS, Dell, HP and many others with about all of them already offering flash solutions) but with up-to-date storage products from Whiptail in data acceleration software layer and 100% MLC high-performance SSD arrays with compression and de-dupe, that can scale up to 360TB with FC, Ethernet and IB connectivity, exceeding 4 million IO/s and 40GB/second throughput.

Whiptail (named after the WhipTail Racerunner lizard, an extremely fast species indigenous to SW USA), a fast growing start-up co-founded in 2008 by current CTO Jim Candelaria and first CEO Ed Rebholz, is based in Whippany, NJ, with about 80 employees and revenue between $20 million and $30 million, according to US sources.

Current CEO is Dan Crain, founding member of StorageApps, a pioneer in storage virtualization and former CTO at Brocade for many years.

It was ranked in our Top 15 Fastest Growing Storage Start-Ups in 2012. Last January, it announced 300% revenue growth and adding 130 new customers in 2012. At the same time, it added: "Whiptail hit 3.7PB and almost 60 million IO/s of all-flash storage shipped worldwide. Whiptail arrays have displaced more than 300,000 high-performance 300GB HDDs totaling 87PB while saving users more than $10 million annually in combined energy and climate control costs."

As far as we know, the US start-up got three rounds of financial funding with Cisco and SanDisk among investors: an undisclosed first round in 2010, $10 million series B and $31 million series C in 2012.

The firm already partnered since last year with Cisco, one of the most acquisitive technology companies in California. The New Times just wrote: "The Whiptail acquisition is Cisco's 12th deal of the year and brings its annual total spent on acquisitions to more than $4 billion, according to Dealogic. Over the last five years, Cisco has spent more than $18 billion on upwards of 70 deals." In storage, we counted 10 acquisitions (see below).

Whiptail products will be used by Cisco to evolve its Unified Computing System (UCS) architecture with storage, added to networking devices and servers, but what is missing in this converged infrastructure is a bunch of storage software. Furthermore, the network giant will me more in competition in the growing market of converged infrastructure that includes tohether compute, network and storage: EMC VPLEX with EMC ... and Cisco; VCE with EMC, VMware ... and Cisco, Flexpod from NetApp with VMWare or Microsoft for virtualization ... and Cisco, IBM PureFlex, Hitachi Unified Compute Platform with HDS and Brocade or ... Cisco, and more recently Dell with Force10 Networks.

Whiptail is the 52th acquisition in the worldwide storage industry since the beginning of 2013, including the following seven deals in flash.

Mo.	Buyer	Acquired company	Price*	Activity of acquired company
1	Violin Memory	GridIron Systems	NA	SAN application accelerator appliance
3	Fusion-io	NexGen Storage	119	Hybrid storage appliances
5	PMC-Sierra	IDT (assets)	96	Flash controllers and PCIe switches
7	SanDisk	SMART Storage Systems	307	Enterprise SAS and SATA SSD
8	Western Digital	Velobit	NA	Caching software for SSD
9	Western Digital	Virident Systems	685	PCIe SSD
9	Cisco	Whiptail	415	SSD subsystem

* in $ million

Acquisitions of Cisco in storage

Year	Acquired company	Price*	Activity of acquired company
2000	NuSpeed Internet Sytems	450	SAN and IP networks
2004	Andiamo	750	Intelligent multiprotocol switches
2004	Actona Technologies	82	File caching via an appliance to WAN
2005	Topspin Communications	250	Infiniband switches
2005	Fineground	70	WAFS
2007	NeoPath Networks	NA	FAN and virtualization technology
2007	Broadware Technologies	NA	IP-based video surveillance software
2008	Nuova Systems	10 to 678	Switch supporting FCoE
2012	Cloupia	125	Software managing pools of computing, network, storage and VMs
2013	Whiptail	415	SSD subsystem

* in $ million