Cisco on Tuesday said it is acquiring Nuova Systems, a Fibre Channel over Ethernet technology developer in which it was the majority investor.
Cisco Systems, of San Jose, Calif., unveiled the planned purchase simultaneously at its partner conference in Honolulu, Hawaii.
The acquisition is a "spin-in" in that Cisco was the primary investor in San Jose, Calif.-based Nuova. Cisco previously owned 80 percent of Nuova, and is acquiring the remaining 20 percent.
Cisco said it would pay $10 million to $678 million for Nuova, based on the future success of the company's products.
Cisco said it had previously invested $70 million in Nuova.
This is not the first such "spin-in" acquisition Cisco has done. The company in August of 2002 acquired Andiamo Systems, a company in which it had secretly invested.
Cisco in 2001 had secretly put up most of the money used to set up Andiamo. Andiamo was set up to develop the Fibre Channel technology which eventually formed the basis of Cisco's current Fibre Channel switch and director product line.
Cisco also unveiled the Cisco Nexus 5000, a 10 Gigabit Ethernet "top-of-rack" switch that offers unified fabric capabilities through the support for multiple data center networking protocols and software intelligence to support Fibre Channel over Ethernet (FCoE).
FCoE technology has been in development by leading networking and storage companies for about a year since details of the technology were unveiled in April of 2007.
With FCoE, enterprises can run their Fibre Channel SANs over 10-Gbit Enhanced Ethernet networks without the need to change those SANs except for the addition of some type of Fibre Channel-to-Ethernet bridge. Those bridges could be either an appliance, an add-on module to existing Ethernet switches, or software embedded in the Ethernet switches.
Unlike a similar protocol, Fibre Channel over IP (FCIP), which requires investment in equipment to handle a variation of the Fibre Channel protocol to tunnel through IP networks, FCoE maintains a company's existing investment in Fibre channel technology. Instead, the FCoE bridges handle the translation of Fibre Channel signals into a format that can be transported over Enhanced Ethernet networks.
Cisco is one of several vendors which are unveiling and demonstrating FCoE products at the Storage Networking World conference this week in Orlando.
Larry Hooper contributed to this article.