Storage VAR Datalink Acquires Networking Business

Storage solution provider Datalink has acquired the Cisco-centric networking business of Cross Telecom in a bid to prepare for the industry move toward converged storage, and IP networks and data center virtualization.

Datalink, Chanhassen, Minn., said Tuesday it has acquired the seven-person networking team of Bloomington, Minn.-based Cross Telecom for $2 million.

Cross Telecom has also agreed to purchase a minimum of $1.8 million worth of networking products and professional services from Datalink over the next three years as part of the deal.

Datalink acquired the networking team and expertise of Cross Telecom because of the need to build a networking practice as quickly as possible, said Greg Barnum, Datalink CFO.

"The real reason we did this is to bring networking expertise to our customers," Barnum said.

Datalink has been in storage for 20 years, but has not been in the networking business, Barnum said. "However, the industry is moving towards convergence," he said. "Cisco is getting into servers, and rumors are it might buy a storage company. The data center is converging into a single solution."

Cross Telecom's primary networking vendor is Cisco, a vendor with which Datalink has done very little in the past, Barnum said. Datalink works with Brocade on its storage networking business, but it has not yet started working with Brocade's Foundry IP networking technology, he said.

Brocade acquired IP networking vendor Foundry in December as part of a move to better compete with networking giant Cisco.

The seed of the acquisition was planted about six months ago over a lunch meeting between a Datalink sales vice president and a Cross Telecom executive, Barnum said.

That was about the time Datalink started having internal discussions about how to move towards building data center virtualization and converged network strategies, he said. The two companies started deep discussions about the acquisition about two months ago, he said.

Cross Telecom's primary business is telephony, and its primary partner is Avaya.

The acquisition closed Oct. 1.

Cross Telecom was not available to comment.