Cisco Lifts The Veil On SDN Spin-In Insiemi

Heading into the Cisco Partner Summit, Cisco had stayed relatively quiet on the subject of Insiemi, the software-defined networking startup it was rumored to be investing in as a potential "spin-in."

No longer. Thanks to ongoing questions about Cisco's role and intentions with Insiemi, the company's top executives have been offering details about the company throughout the Partner Summit, including that Cisco has poured $100 million into the business so far with the right to potentially acquire the company for $750 million more on top of that.

Cisco Chairman and CEO John Chambers confirmed these details during a press roundtable this week.

"About a year ago we began to see an opportunity in a market around programmability and application-aware networks and networks aware of applications," Chambers said. "That will come out in multiple forms."

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Cisco has a multi-pronged approach to the market, Chambers said, identifying hardware, software and Cisco's ASIC technology as competitive advantages.

He didn't provide additional details except that Insiemi is in early stages and that the Insiemi management team -- Mario Mazzola, Prem Jain and Luca Cafiero -- has been "remarkably successful for us."

Mazzola, Jain and Cafiero are well-known for being involved in previous Cisco spin-in ventures -- that is, companies funded by Cisco and headed by highly regarded Cisco-associated engineers, that Cisco would later acquire -- such as Andiamo Systems, a storage networking company, and Nuova Systems, in which its core technology became Cisco's Nexus switch after its acquisition by Cisco in 2008.

Insiemi appears to fit that model, too, and arrives as questions increasingly come up about Cisco's role in the SDN space. Support for SDN -- and for a range of startup companies tackling products based on OpenFlow and other network virtualization-centric technologies -- has grown, and venture capital firms are taking an interest in various startups such as Pertino, which earlier this month closed $8.85 million in a Series A round.

NEXT: Insiemi And Cisco's Targeted Strategy

In an interview with CRN Wednesday, Padmasree Warrior, Cisco's CTO, also confirmed details of Insiemi and said the company has been targeting a particular disruption Cisco has been seeing in the networking space.

"If there's any company that's going to reinvent networking, it will be Cisco," Warrior said. "We have the talent and the breadth and the depth to do that. It goes beyond just SDN to certain elements of network visibility, such as analytics and big data. But, we want our partners to understand that Cisco is working on enabling all the capabilities needed for the network of the future."

"We have a strong legacy and understand how it needs to be done," Warrior said. "The approach we're taking with partners is that it's not one size fits all. Solutions should be based on the use case a customer has, and we are working on use-cased based solutions."

Warrior said Cisco is working on other SDN products and also confirmed its commitment to Insiemi, which she said is working on how to enable programmability and visibility into physical and virtual network resources.

"It is part of our build-by-partner strategy. If you look at emerging opportunities, especially those that don't really have any revenue today, we are striving to drive innovation, to drive opportunity for partners," she said. "There are some emerging disruptions we feel we need to watch out for and Insiemi falls into that category."

Cisco is also telling its employees about the project in more detail. In Cisco's internal memo posted to the Bits blog of The New York Times Thursday, it says that Insiemi's "product development efforts are complementary to that of Cisco's current and planned internal investments. Insiemi and other internal programs will be components of Cisco's broader programmability framework."

"The types of investments have strongly benefited Cisco in the past," the memo continues, "and we will continue to look for similar ways to complement our internal development capabilities."

Jennifer Follett contributed reporting.