Cavium buys Xpliant, widens clout in enterprise market
Enterprise processor vendor Cavium, Inc. said it has reached an agreement to buy California-based switching firm Xpliant, Inc.—a move that is seen to accelerate deployment of software defined networks.
It was revealed that the two companies, in serving the enterprise and data centre markets, have forged a bond involving a $15 million investment by Cavium, which rounded up in June.
Xpliant is known for developing switching silicon solutions with speeds and port densities supporting throughput ranging from multi-hundred gigabit to multi-terabit. These products are said to have been designed from the ground up to specifically address the challenges of throughput and flexibility driven by the needs of next generation networking infrastructure and software defined networking.
"This product line significantly expands our addressable TAM and will be an exciting addition to our portfolio of solutions for the data centre, service provider and enterprise markets," said Syed Ali, President and CEO, Cavium.
Cavium believes that the addition of Xpliant switching architecture will be highly synergistic with its existing infrastructure product offerings including ThunderX, OCTEON and LiquidIO. The firm expects to significantly increase its share of BOM in the data centre, service provider and enterprise markets.
Additionally, Xpliant's products will allow Cavium to offer complete end to end solutions for compute, networking and storage, optimised for best performance, cost and power for next generation virtualised software defined infrastructure.
This strategy illustrates Cavium's effort to address the need for increased capacity in both networking infrastructure and data centres driven by the steep growth of mobile applications and social networking.
Global mobile data traffic is projected to increase nearly 11-fold between 2013 and 2018, growing at a CAGR of 61 per cent. Cloud data centre IP traffic, on the other hand, is estimated to more than double between 2014 and 2017, growing at a CAGR of 30 per cent, according to Cisco's Visual Networking Index and Global Cloud Index.
The acquisition deal is valued at $90 million, which includes the $15 million investment Cavium made in Xpliant through June 2014. The balance will be paid in $40 million as cash and the remaining $35 million in stocks.
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