Cisco Completes Nuova Purchase

By Michelle Savage

May 22, 2008 —  Cisco said today that it had completed the purchase of Nuova Systems, a data center switch start-up funded by Cisco to develop next-generation data center products.

In 2006, Cisco purchased an 80 percent stake of Nuova for US$70 million. The deal was dubbed a "spin-in" investment, in which employees leave the company for about two years to run their own venture, then rejoin once Cisco acquires the start-up.

Nearly two years later, Cisco has wrapped up the deal, acquiring the 20 percent of Nuova that it doesn’t already own. The final purchase price will be based on Nuova's performance through fiscal year 2011, with the minimum payout being $10 million and the maximum being $678 million.

Last month, Cisco rolled out the Nuova-developed Nexus 5000 switch, which is designed for data center consolidation through a unified switching fabric that supports Fibre Channel over Ethernet, lossless Data Center Ethernet and virtualization technologies. According to Cisco, the switch is an important part of Cisco's Data Center 3.0 vision of enabling IT companies to dynamically provision application and infrastructure services from shared pools of consolidated compute, storage and network resources.

Nuova will operate as an independent business unit led by founders Luca Cafiero, Prem Jain and Mario Mazzola.



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