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Cisco to acquire flash-array startup Whiptail for $415 million

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September 11, 2013

Cisco said late yesterday that it intends to acquire flash array startup Whiptail for about $415 million, catapulting it full tilt into the storage market and, in the process, seriously threatening its close relationship with EMC.

Cisco's CEO John Chambers said-- "Whiptail will strengthen Cisco's Unified Computing System (UCS) strategy and enhance application performance by integrating scalable solid state memory into the UCS's fabric computing architecture."

It added that making storage faster and bringing it closer to its servers will speed applications such as virtual desktops and data analytics.

Cisco said it "is evolving the UCS architecture by integrating data acceleration capabilities into the compute layer. Integrating Whiptail's memory systems with UCS at a hardware and manageability level will simplify enterprise customers' data centre environments by delivering the required performance in a fraction of the data centre floor space with unified management for provisioning and administration."

Whiptail has ACCELLA and INVICTA all-flash arrays for enterprises and the WT-1100 for small and medium businesses. It competes with other all-flash array startups such as Kaminario with its K2 product, Nimbus Data, Pure Storage, Skyera, SolidFire with its cloud focus, and Violin Memory which has just filed for an IPO.

Dell has its all-flash Compellent array variant. HDS has its in-house flash array initiative. For its part, HP has its all-flash 3Par 7450. IBM has its acquired TMS flash array technology. NetApp is building its own FlashRay product and EMC has its acquired XtremIO all-flash storage arrays, due to be launched before the end of 2013.

Whiptail was founded in Whippany, New Jersey, in 2008 by James Candelaria, currently its chief technology officer. Its funding history looks like this: in December 2012 a $31 million cash injection was made with, apparently, Cisco participating as well as SanDisk.

In March 2012, there was a $9.5 million investment made in private equity funding. We estimate that the A-round was up to $15 million and the B-round up to $20 million, which would place total funding in the $75.5 million area, making the $415 million acquisition price a 500 percent return for the investors.

EMC's VMware subsidiary partnered with Cisco to create VCE, which supplies converged Vblock systems composed of Cisco servers and networking, VMware's virtualization software and EMC storage arrays. Recently VMware acquired Nicira and has entered the software-defined networking field with NSX, threatening Cisco's networking interests.

The Whiptail acquisition could almost be a tit-for-tat move by Cisco. Stifel Nicolaus analyst Aaron Rakers said: "This represents Cisco’s first move into the storage array market and thus will likely result in questions over the company’s relationship with EMC and NetApp."

A quote from Paul Perez, Cisco's general manager of the Computing Systems Product Group, said-- "We are focused on providing a converged infrastructure including compute, network and high performance solid state that will help address our customers' requirements for next-generation computing environments. As we continue to innovate our unified platform, Whiptail will help realize our vision of scalable persistent memory which is integrated into the server, available as a fabric resource and managed as a globally shared pool."

The storage array landscape just underwent a major shift. Cisco is still a big hitter, and every other server systems and stand-alone networked storage array supplier has just received a massive competitive shock.

Whiptail's products will now be sold through Cisco's wide channels and their development will be accelerated with Cisco capital and resources.

Cisco's immediate needs for storage collaborators – notably, EMC and NetApp – just went down, and both are under notice that Cisco will not require their services for flash storage. Every flash array startup will have to reexamine their strategy and up their game if it's found wanting.

Will Cisco still go the extra mile and acquire a drive array manufacturer? We don't know for now, but with the promise of cheap TLC flash as a cold storage tier it could well say flash is all we need and disks are just yesterday's technology. Whiptail's staff will be put into Perez's organization. The deal should close in the first quarter of 2014, we are told.

In other IT news

One could say that it's possible the NSA has devoted some efforts to key capture and side-channel attacks rather than brute-forcing its way through ciphertext on a very large scale, but it's also true that our cryptographic algorithms won't last forever.

And now this is present on the minds of many system admins, not just the NSA, which draws some attention to the topic of internet security, which is looking at protection of multi-party computation (MPC) activities.

According to science and physics website Phys.org-- “The idea behind Multi-Party Computation is that it should enable two or more people to compute any function of their choosing on their secret inputs, without revealing their inputs to either party. One example of this is an election. Voters want their vote to be counted but they don't want their vote to made public.”

This might also be useful in cloud-based collaboration projects, since it would protect anyone's data against the rest of the world, including your own boss, if it so happened that his or her machine was compromised.

The goal of the work by a British/Danish collaboration team is to strap the supercharger onto a protocol called SPDZ to give it real-world performance.

With SPDZ, two machines working on a multi-party computation problem can do so without revealing their data to each other. They describe SPDZ as-- “secure against active static adversaries in the standard model, is actively secure, and tolerates corruption of n-1 of the n parties."

"The SPDZ protocol follows the preprocessing model. In an offline phase, some shared randomness is generated, but neither the function to be computed nor the inputs need be known. In an online phase, the actual secure computation is performed,” explains Phys.org.

But let's clarify this a bit. The claims of security aren't remarkable, and the protocol is designed so that your data will remain secure even if everybody else is compromised (“n-1 of the n parties”).

The protocol simply relies on a message authentication code (MAC, just to make sure there's no confusion with Media Access Control) and this made it computationally demanding. The MAC is partly shared between the parties, and parties had to reveal their shares of the code to effectively communicate.

The issue with this is that revealing the code meant for every communication it had to be renegotiated, hence its slow performance. Other problems were that the key generation was also demanding, covert security was considered weak, and the proposed new system is more secure in the offline phase.

The system as a whole is described in this manner-- “MPC is similar in concept to the “zero knowledge proof” or ZKP. It's simply a set of rules that would allow parties on one end of a transaction to verify that they know a piece of information such as a password by offering a different piece of information that could be known only to the other party."

The technique could allow secure password-enabled login without requiring users to type in a password or send it across the internet. Like many other attempts at MPC, however, SPDZ was too slow and cumbersome to be practical.

If the paper – which will be presented at this week's ESORICS 2013 conference – holds up, it will eventually add a new string to the bow of those that want to protect information, rather than snoop on it.

In other IT news

China's own crackdown on Bo Xilai and other scandal-hit Communist Party outcasts may be making Unix systems less popular behind the country's Great Firewall.

At least that's the opinion of EMC's president for Greater China, Denis Yip, who last week told attendees at an EMC Forum event in Hong Kong that the political environment across the border had made IT buyers more careful about where and how they spend their budget. And virtualisation on x86, he said, is the big winner for now.

Overall, China has in recent weeks been gripped by the trial of ex-Chongqing party leader Bo Xilai, in part thanks to the trial court's decision to shared details of the trial on Sina Weibo (often described as China's Twitter).

Yet another high profile trial, of former railways minister Liu Zhijun, saw a suspended death sentence handed out last July.

Both trials have been mentioned by new president Xi Jinping as part of a major crackdown on political corruption and bribery.

EMC's Yip told the Forum that the corruption crackdown means that purchasers of IT are becoming more cautious in China, merely because spending big now attracts a lot of scrutiny.

Buying servers with lots of unused capacity therefore looks suspicious. “The trend is that people are putting new applications on virtualised environments,” Yip added. “Chinese customers are spending less money. People are not willing to spend big money on mainframes, but they are definetely switching to x86 environments.”

Source: Cisco.

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