Hyper deal: Cisco confirms $320M deal for stealth Israeli chip startup

Still-new CEO Chuck Robbins looks to be making a huge bet for Cisco’s future with a $320 million buy of an Israel-based startup whose chip technology may set the stage for a leap forward in networking called “hyperconvergence.”

In a blog post, Cisco confirmed the deal that had been reported earlier by two news sites.

“Leaba is a team with a strong and successful track record of designing leading edge networking semiconductors that provide innovative solutions to address significant infrastructure challenges,” Cisco said. The price is $320 million plus other expenses such as retention bonuses.

Cisco (Nasdaq: CSCO) has been moving steadily into the data center markets, offering a mix of routers and services under the slogan “Unified Computing System.” Hyperconvergence has become a big buzz word, the term denoting an ever-faster means of getting data to and from clouds.

Then came word that Cisco is buying a still-in-stealth-mode Israeli chip startup called Leaba Semiconductor.

This deal follows by about 24 hours Tuesday’s announcement of Cisco buying privately held CliQr Technologies for $260 million plus retention and other bonuses.

CliQr is a cloud play since it offers software enabling customers to effectively manage clouds across different environments.

Looks like Leaba is a piece of the Cisco cloud strategy to make moving data more efficient, even faster.

Defining hyperconvergence

From TechTarget.com:

“Hyper-convergence (hyperconvergence) is a type of infrastructure system with a software-centric architecture that tightly integrates compute, storage, networking and virtualization resources and other technologies from scratch in a commodity hardware box supported by a single vendor.”

Also known as Core and Arena Semiconductor, little is known about the company, according to the Israeli news site Ynet, which broke the story early Wednesday. Bloomberg news followed up, saying it had a source that confirmed the deal.

That’s a lot of cash to bet on a very new technology.

Robbins and company must believe it is hot, hot hot.

Ynet describes Leaba’s technology as chips that make provide “rational and efficient routing” between servers and networks.

Bloomberg noted that Cisco is “is actively investigating the best ways to meet future market needs related to silicon.”

And apparently Leaba, which is led by co-founders who sold an earlier company (Dune Networks) to Broadcom, have made a big chip advance.

Cisco, which operates one of its largest campuses in RTP, hosted a Partner Summit on Tuesday to brief companies on its latest hyperconvergence and Unified Computing System efforts. A HyperFlex system, according to Cisco, offers customers software-defined storage, or SDS.

So what’s hyperconvergence all about?

“Hyperconverged systems are becoming increasingly popular among enterprises and service providers as tools that enable them to create infrastructures that are easy to deploy and scale, run across multiple sites—data centers as well as remote and branch offices—get rid of silos in the data center, and better run modern applications,” notes eWeek.

Cisco’s HyperFlex

At the event, Cosc unvelied HyperFlex which the company says “represents true hyperconvergence, combining innovative software defined storage and data services software with Cisco UCS, the proven system that unifies servers and networking like no other.”

In a blog post, Satender Sethi, vice president of Data Center Solutions Engineering & UCS Product Management, noted:

“With Cisco HyperFlex, we’re delivering the capabilities customers tell us they’ve been waiting for in a hyperconverged solution. By extending our strategy of software defined, policy driven infrastructure to hyperconvergence, Cisco will accelerate mainstream adoption of this valuable technology and provide customers a future-ready platform for evolving applications.”

With the Leaba buy, it appears Cisco believes it can make all that fast … faster … fastest(?).

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