Cisco pours money into SAN startup

By Mark Young

Cisco Systems has shown its confidence in the future of storage networking with its purchase of Andiamo Systems.

In an unusual move, the company did not announce a purchase price, but said the final figure will range from zero to US$2.5 billion, depending on Andiamo's sales for the three months prior to closing and a multiple based on Cisco's sales and market capitalisation.

The fibre channel storage area networks (SAN) switching market is expected to grow from today's US$1.2 billion to US$4.3 billion in 2006.

Andiamo's technology will reduce the costs of sharing and managing data across a company's storage network and enable companies to consolidate their separate storage networks into an integrated SAN infrastructure.

The company's first products, a series of director-class and fabric switches with up to 256 500Mbps ports, was labelled as the Cisco MDS 9000 family and is now being resold by Cisco.

"The technology developed by Andiamo marks a new era of innovation in the storage networking market," said Mario Mazzola, chief development officer of Cisco Systems. "With Andiamo's technology, Cisco will be able to offer enterprise customers the same levels of network scalability, performance, and manageability to storage networking that Cisco pioneered in LAN and IP networking."

As with Cisco's own storage efforts, Andiamo (it means "let's go" in Italian) is betting on storage infrastructure becoming more complex, leading to reliance on industry standard protocol like iSCSI and Fibre Channel over IP to enable heterogeneous systems to work together.

The transaction is expected to close some time between February and July in 2004.