Sources: Cisco In Talks With IPO-Bound Nutanix About Strategic Hyper-Convergence Partnership

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Cisco Systems, which tried unsuccessfully to acquire Nutanix last year, is once again in talks with the hyper-convergence startup, three sources familiar with the talks told CRN this week. 
This time, Cisco and Nutanix are discussing a strategic partnership in which channel partners from both vendors would sell Cisco Unified Computing System (UCS) servers with integrated hyper-convergence software from Nutanix, said the sources, who didn't want to be named because the talks are confidential.   
Nutanix and Cisco haven't yet finalized terms of the partnership, and it's possible an agreement may not be struck, the sources said. 
Spokespeople from Cisco and Nutanix declined to comment.
These types of arrangements, known as a "meet-in-the-channel" partnerships, are on the rise in the emerging market for hyper-converged infrastructure, which refers to compute, storage and networking running virtually on x86 server hardware. Cisco has a similar partnership with number two hyper-convergence player SimpliVity, which has one with Lenovo.
Nutanix also has OEM agreements with Dell and Lenovo, in which the vendors jointly build and sell hyper-converged infrastructure appliances. 
Cisco entered the hyper-convergence market in March with HyperFlex, a product that marries its UCS servers with technology from software-defined storage startup Springpath. Cisco has invested in Springpath and has the option of acquiring it based on revenue results, said the sources.  
Early returns on HyperFlex have been mixed. Although some Cisco partners are seeing demand for the product, several of the vendor's top partners have yet to receive HyperFlex gear for testing, despite being told by Cisco they'd get it in March. 
A Cisco spokesman said the delay is due to higher-than-expected demand for HyperFlex, and that customer shipments are taking priority until Cisco can ramp its production of the product.
Meanwhile, some Cisco customers have also experienced issues with getting HyperFlex to scale in their environments, sources told CRN this week. 
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