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Cisco goes storage with Andiamo buy

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Cisco Systems today announced a deal to acquire storage firm Andiamo Systems and outlined plans to introduce a line of high end storage switches based on Andiamo's technology by the end of the year.

Cisco, which already owns a stake in the startup, will acquire Andiamo in a stock swop deal worth up to $2.5 billion. The price Cisco will pay depends on Andiamo's sales, and its own share price, in the three months prior to the closure of deal (Q3 2004).

This acquisition represents Cisco's entry into the Fibre Channel SAN switching market, which according to market research firm Gartner Group, is expected to grow from approximately $1.2 billion in 2002 to $4.3 billion in 2006.

Cisco is trying to extend its dominance of the networking market into storage by acquiring Andiamo (which is Italian for Let's Go).

John Chambers, president and chief executive of Cisco Systems, said the deal supported its strategy of entering into new growth markets, such as storage
networking, "where we believe we have the potential to be the number one or two player."

Based on technology obtained through the acquisition, Cisco will introduce the MDS 9000 Family of Multilayer Directors and Fabric Switches in Q4 2002.

Andiamo's products complement Cisco's existing storage networking portfolio of IP storage networking products and Metro-Optical SAN connectivity solutions.

Cisco MDS 9000 Family products will support Fibre Channel for large data center environments, iSCSI - an emerging standard for storage over IP network - for small/medium businesses and workgroups, and FCIP for remote SAN connectivity. ®

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