Secret Weapon

Its biggest weapon may be Andiamo Systems, a privately held company in which Cisco is the primary investor and a key strategic partner. Industry observers say the secretive start-up, founded five months ago, is developing high-end IP storage products.

On its Web site, Andiamo says it is working on a "new architectural framework that merges storage-area and IP networking" and is "centrally managed [and] vendor-agnostic."

Observers say Andiamo is working on a director-class switch for building storage networks using IP technology. It combines several protocols, including iSCSI and Fibre Channel, and can tag IP frames according to priority, such as a data or video stream vs. an e-mail, says one IP storage vendor executive who has been in touch with Andiamo.

Cisco understands the importance of storage, says Tom Mitchell, senior vice president of worldwide channels at Cisco. "We definitely want to participate and take advantage of the growth of the storage market," he says.

One storage solution provider, who requested anonymity and has already started working with several IP storage vendors, says everything Cisco is doing today in the storage market is a smoke screen until the Andiamo investment pans out.

Andiamo is apparently headed by Mario Mazzola, senior vice president of the enterprise line of business at Cisco, according to a former Cisco employee who recently left the company. Mazzola was co-founder, president and CEO of Crescendo, which Cisco acquired in 1993, and is credited with leading the team that developed the Catalyst 6500 switch. Many of the Andiamo team members are former Crescendo employees, says an IP storage vendor executive.

Several observers are calling Andiamo a "spin-in," as opposed to a spin-off. Cisco invested an undisclosed amount in Andiamo and is expected to eventually acquire the company, says another IP storage vendor executive.

Assuming the Andiamo product is a director-level switch with high-speed switching between multiple protocols such as Fibre Channel, SCSI and InfiniBand, it could revolutionize the way storage is accessed, says Carl Wolfston, director of Headlands Associates, a storage solution provider in Pleasanton, Calif.

However, Cisco could end up competing against itself and its partners.

Last July, Cisco paid about $450 million for NuSpeed Internet Systems, which is now Cisco's Storage Router Business Unit. NuSpeed's first product, a rack-mounted router with a Gigabit Ethernet port and a Fibre Channel or SCSI port, started shipping last month.

Cisco also forged an alliance with Fiber Channel switch vendor Brocade. Future NuSpeed products will incorporate Brocade's Fibre Channel technology.

Cisco's acquisition of Maple Grove, Minn.-based NuSpeed is an effort to freeze the market until it is ready with its own offering, says one storage solution provider. Likewise, the vendor's alliance with Brocade is a "marriage of convenience," he says.

The NuSpeed and Andiamo teams do not have a good relationship, adds the former Cisco employee. "They are almost competing divisions."

Cisco IP storage partners Nishan Systems and SAN Valley Systems could also be adversely affected by the Andiamo product offering, observers say.

Cisco's interest in IP storage is good for the industry, says Randy Fardal, Nishan's vice president of marketing. "Who knows if [Andiamo] will see the light of day. But the exciting part is, for IP storage, Cisco is making a vote of confidence."