Cisco Wraps Up Nuova

Long thought to be a Cisco Systems Inc. (Nasdaq: CSCO) spin-in project, Nuova Systems Inc. is indeed becoming part of the big company, joining Cisco's grand vision for a future, virtualized data center.

Cisco is acquiring the the 20 percent of Nuova that it doesn't already own. The deal, expected to close by July, will be worth up to $678 million depending on how well Nuova does between now and late 2011. (See Cisco to Aquire Nuova.)

The acquisition (Cisco's 126th, if you're keeping score) is no particular surprise. Some of Nuova's founders previously created Andiamo, which was an official Cisco spin-in, a startup that Cisco funded with the intention of eventually acquiring. (See Cisco/Andiamo Vets Try Something 'Nuova' and Andiamo Crew Reunites With Cisco.)

Nuova wasn't launched as a spin-in, Cisco said in 2006.

Cisco has invested $70 million in Nuova, starting with a $50 million investment that included the rights to buy the final 20 percent piece. Cisco increased its involvement with Nuova about a year ago, "to increase the scope of Nuova's product development," said Rob Salvagno, Cisco senior director of corporate development, at Cisco's Honolulu event.

Nuova's first product, also announced today, is the Nexus 5000, a 10 Gbit/s Ethernet switch that has the same unified fabric capability as the Nexus 7000. Cisco worked with Nuova on the Nexus 5000 but insists that the Nexus 7000 was internally developed. (See Cisco Adds to Nexus.)

— Craig Matsumoto, West Coast Editor, Light Reading

tsat 12/5/2012 | 3:43:52 PM
re: Cisco Wraps Up Nuova
I am confused.... is the Nexus product line half Cisco internal, half Nuova? Seems like Cisco is getting really good at blurring the lines between spin-in/ternal.

It is a very advanced take on how to engineer a product, I have to say. If the product fails, risk is limited. The engineers took a chance at a startup, that was the risk they take. If it succeeds, everyone is happy.

Its almost like Cisco has a two-tiered engineering approach. You can either stay internal, work "normal" hours, have yourself a good career, or take your chance at fast-track external project that might have bigger rewards.

Plus, it may be hard to find top talent to work Cisco Internal, but easier to grab people for an external spin-in.

Its probably smarter than trying to acquire start-ups that never had any Cisco affiliation.

Sign In