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Confirmed: Cisco did invest in SpringPath

Board-level relationships and lots of influence

When Cisco entered the hyperconverged product area with its SpringPath software-powered HyperFlex system, it had already invested money in SpringPath and gained board-level representation.

Cisco VP for world-wide Data Center and Virtualization, Frank Palumbo, revealed this at a Data Centre partner meeting in Rome. The amount of funding is not being disclosed.

This was rumoured in January.

So far SpringPath, which was founded in 2012, has taken in $8m in a 2012 A-round, and $25m in a 2014 B-round – a total of $34m. Looked at from a typical startup's growth/funding trajectory pattern, we might say that the 2016 Cisco investment could have substituted for a venture capital C-round.

That C-round would have been needed for continued software development and for business infrastructure development around the sales, marketing, partner enablement and back office areas. With Cisco representing a potentially massive channel for SpringPath, its funding needs would be correspondingly smaller.

El Reg is thinking a Cisco investment in the $5m to $20m area sounds reasonable, and this would take total SpringPath funding to $39m to $54m.

In principle SpringPath is free to strike up deals with other server vendors for its hyperconverged software. Palumbo said Cisco had a lot of influence inside SpringPath and was very pleased with the working relationship.

Patrick Schmidt, Managing Director DCV EMEAR at Cisco, said Cisco will extend HyperFlex and add capabilities for databases. For example, SAP support could be added.

Cisco's position is generally that Nutanix and equivalent HCIA (Hyper-Converged Infrastructure Appliance) vendors represent additional silos, whereas HyperFlex is integrated with Cisco's other data centre offerings. Also, Palumbo said, Cisco has worldwide support and service infrastructure and processes, which he said startups could not match.

He said that Cisco HyperFlex has an emphasis on networking, and its design is future-proof for things such as containers and micro-services. He also emphasised that, for Cisco, hyper-converged is an additive business to its converged systems, such as Vblocks, FlexPods, etc.

Cisco is strongly interested in the hyperconverged market, seeing a $2bn opportunity in 2016 alone, plus a 65 per cent CAGR from 2015 to 2019.

As far as SimpliVity and similar partners are concerned, we're told, it's meet-in-the-channel business as usual, and they bring their own differentiated offerings to the market – no one size fits all, then. ®

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