Before buying out the remainder of Insieme, Cisco Systems already owned 85% of the startup. Although the final price of the acquisition would be tied to sales target, the deal could end up costing around $863 million. Insieme is known for developing software defined network (SDN) technology. SDN technology can run on cheaper hardware than Cisco’s routers and switches.
Cisco chief executive officer John Chambers said that Insieme products would, “reset the stage for IT for the next decade.” Insieme launched in early 2012 and received $100 million from Cisco followed with a $35 million round of funding in November 2012.
SDN is a hot technology today. VMware acquired SDN startup Nicira last year for over $1 billion. Juniper Networks and Hewlett Packard is also developing SDN technology.
Insieme has 286 employees and was founded by former Cisco engineers Prem Jain, Mario Mazzola, and Luca Cafiero. Insieme includes the Nexus 9000 network switches, which is ready to be shipped to customers. They also created a software controller called the Cisco Application Policy Infrastructure Controller (APIC). This product will be available for sale in the first half of 2014.