Cisco to Buy Indian-origin Founders’ Springpath for $320 Million

United States-based Cisco Systems Inc. has announced its plans to acquire Springpath, which was founded by Indian-origin entrepreneurs Mallik Mahalingam and Krishna Yadappanavar, in an all-cash deal of $320 million. The deal is expected to be closed in the current fiscal year following customary regulatory reviews.

Springpath, the hyperconvergence software leader based at Sunnyvale in California, was founded by the former VMware executives in 2012. Mahalingam is a former research associate at IIT Kanpur and had earlier worked with Hewlett Packard Enterprise and Netframe Systems. Yadappanavar, a graduate of BITS Pilani, worked with  Commvault and the NAS product line at EMC before moving to VMware.

Springpath to Help Cisco Grow

Springpath has developed a distributed file system purpose-built for hyperconvergence that enables server-based storage systems. With this acquisition, the networking equipment provider, Cisco, hopes to continue to deliver next-generation data center innovation to its customers, the company said in a press release.

“Springpath’s file system technology was built specifically for hyperconvergence, which we believe will deliver sustainable differentiation in this fast-growing segment. I’m excited to be able to provide our customers and partners with the simplicity and agility they need in data center innovation,” Rob Salvagno, Cisco vice president, corporate business development, said.

Cisco and Springpath have been involved in a strategic relationship for quite some time now. In early 2016, the two companies worked together to launch HyperFlex, the industry’s first fully integrated hyperconverged infrastructure system.

“This acquisition is a meaningful addition to our data center portfolio and aligns with our overall transition to providing more software-centric solutions,” said Salvagno.

By acquiring Springpath, Cisco can to grow its computing business, which will help customers understand the benefits of simple and economic software-defined infrastructure.

Interest in India

In the recent past, Cisco said it is committed to invest and hire more people in India and the US. The company began operations in India in 1995 and in the financial year of 2016, its profits had a 340 per cent growth, backed by the Smart City initiatives and its partnership with Reliance Jio.

The company employs almost 12,000 people across its various centres in New Delhi, Mumbai, Bengaluru, Chennai, Pune, Kolkata, Hyderabad and Gurugram.

In March, the company said it was aiming at investing $100 million in startups and training 2.5 lakh students in India by 2020.

Indian-origin Entrepreneurs Draw Investors

In the recent past, a number of Indian-origin internet entrepreneurs in the US have attracted investor interest, VCCircle reported.

Outcome Health, a Chicago-based health-tech company founded by two Indian-American entrepreneurs Rishi Shah and Shradha Agarwal, recently raised $500 million at a valuation of $5.5 billion.

Netskope, a Cloud security  firm founded by Sanjay Beri, the former India head of Juniper Networks, raised $100 million in a Series E round. Netskope had a post-money valuation of $1.25 billion, which made it a member of the unicorn club, comprising companies valued at more than one billion dollars in the US.

Earlier this month, US-based biotech company Roivant Sciences, founded by Indian-origin entrepreneur Vivek Ramaswamy, raised $1.1 billion from SoftBank.