April 22, 2005

By Andreas M. Antonopoulos, Nemertes Senior Vice President & Founding Partner

Cisco Systems (Nasdaq:CSCO, http://www.cisco.com/)is paying $250 million in cash and stock to acquire privately held Topspin Communications (http://www.topspin.com/). Topspin makes server fabric switches that connect Ethernet, Fibre Channel to higher-speed InfiniBand—a serial interconnect used in data centers for grid and utility computing, clustered enterprise applications, server virtualization and inside servers for inter-processor communications.

The acquisition highlights a key trend Nemertes has identified: A next-generation data center paradigm, leveraging virtualization, clustering, automatic provisioning, and ultimately grid/utility computing, is emerging.

The deal also accelerates the Cisco Business Ready Data Center initiative announced in April 2004. By adding a range of InfiniBand switches, Cisco complements its high-speed switching fabrics for IP (such as the Catalyst 6500) and its Fibre Channel (FC) storage offerings (such as MDS). The move also cements Cisco’s departure from the IP-centric “obsession,” from which it first deviated with its foray into FC switching for storage.

The complete Impact Analysis is available to Nemertes clients. For more information, please contact Christine Zimmerman at christine@nemertes.com