By Don Clark
Cisco Systems Inc. said it would stop selling data-storage
hardware, a business that it entered with its $415 million
acquisition of Whiptail in 2013.
New Jersey startup Whiptail specialized in equipment that stores
data on chips known as flash memory rather than disk drives, a
technology that has attracted many large and small competitors.
Cisco, which had previously moved beyond networking gear to server
systems, had said Whiptail's technology could help boost the
performance of those systems.
But Cisco said Friday it would discontinue the resulting line of
products, known as Invicta, as part of recent efforts to narrow its
focus on the most promising businesses. A Cisco spokeswoman said
some employees would lose their jobs, but she declined to disclose
how many people would be affected.
Cisco entered the storage market despite the risk of angering
longtime partners that sold competing hardware. Tim Stammers, a
senior analyst at 451 Research, said the company tried to use other
terms than "data storage" when discussing Invicta, a tactic he
called a "silly dance."
The Invicta products also suffered from technical problems, Mr.
Stammers noted. The Cisco spokeswoman said the company recently
held shipments for several months while it addressed the
issues.
Cisco's disclosure came the day after it announced the sale of
its TV set-top unit to Technicolor SA for $600 million, a business
it entered as a result of its $6.9 billion acquisition of
Scientific Atlanta Inc. in 2006.
Chuck Robbins, who is expected to assume the CEO post on Monday
from John Chambers, said in a blog post this week that the company
would continue to focus its investments on businesses with the
biggest potential payoff.
The latest decision is understandable, said Daniel Crain, the
former Whiptail CEO, who temporarily worked at Cisco following the
purchase.
"Chuck is the new CEO and is focusing on where he thinks the
company should go," he said. "I can't do anything other than
support him."
Cisco's move was reported Thursday by the news site CRN.
Write to Don Clark at don.clark@wsj.com
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