Cisco Systems, which owns an undisclosed stake in hyper-converged provider Springpath, is getting closer to making a deal to acquire the startup whose technology is used in Cisco's HyperFlex Systems, sources told CRN.
The networking giant is looking at the valuation of the Sunnyvale, Calif.-based startup, with an eye toward making an offer in the fall, according to several sources close to the company.
"Both sides are basically ready for this, where that really wasn't the case in the past when Cisco was looking at the [hyper-converged] market," said one source familiar with the situation, who declined to be named.
Cisco declined to comment on the potential acquisition of Springpath. Springpath did not respond to multiple requests for comment.
When Cisco took the wraps off its strategic partnership with Springpath and new HyperFlex solution in March, sources told CRN that Cisco has the option to acquire Springpath based on sales results.
Cisco has also been working with Springpath since it was founded in 2012. The networking giant led a Series C round of funding in Springpath last year for an undisclosed amount.
“They have got to do something in hyper-converged,” said one source, who did not want to be identified, with knowledge of the strategic ties between Cisco and Springpath.
Cisco previously tried to acquire hyper-converged superstars Nutanix and SimpliVity, but negotiations ultimately failed.
The San Jose, Calif.-based network leader, in fact, made two separate bids to acquire Nutanix, but Cisco's best offer was around $4 billion compared to Nutanix's asking price of around $6 billion to $7 billion, according to sources.
Springpath is shifting to become a Cisco-only OEM development company, with less focus now on other selling and marketing activities, according to a report from The Register. The startup has technology partnerships with Dell, Docker and VMware.