September 13, 2013

Cisco makes technology acquisition with Whiptail purchase

Cisco Systems is just the latest company to make a technology acquisition that involves flash memory chips. According to AllThingsD, Cisco announced that it will acquire Whiptail, a maker of solid-state virtual-memory systems.

The transaction is reportedly worth $415 million and is expected to be completed by the end of the first quarter of fiscal year 2014.

A Cisco press release explained that Whiptail's memory systems enable organizations to "simplify data center and virtualized environments and process more data in less time." The move is expected to strengthen Cisco's Unified Computing System™ (UCS) strategy. Additionally, the acquired technology will help Cisco evolve its UCS architecture by integrating data acceleration capabilities into the compute layer.

Paul Perez, vice president and general manager of Cisco Computing Systems Product Group, said in the press release that his company is focused on providing a converged infrastructure "that will help address our customers' requirements for next-generation computing environments."

"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," he said.

AllThingsD compared Whiptail's flash technology to Fusion-io, which supplies companies like Facebook and Apple to boost their servers' performance.

As the Wall Street Journal pointed out in a recent article, this is not the first M&A activity by Cisco. The company has been making smaller technology acquisitions to try to evolve into a less hardware-intensive information technology provider.

Technology mergers and acquisitions can often benefit both companies involved in a transaction. The purchasing firm and the one being acquired can both find opportunities to grow while helping one another out.