Cisco to buy Topspin for $250 million

The acquisition gives the networking giant access to Topspin's switches, which are used to help companies assemble their servers into computing clusters and link them to networks and storage systems. These "server fabric switches" are designed to provide data centers with high-performance networking service in areas such as grid computing, clustered applications and server virtualization.

Topspin uses the high-speed InfiniBand technology, which after a slow start has become an increasingly common ingredient in supercomputers built out of a number of low-end systems. Among the company's customers is Dell, which sells its PowerEdge 1850 servers connected into groups of eight, 16, 32, 64 and 128 connected by TopSpin's switches.

With the deal, Cisco is filling out its array of switching products, which also includes Ethernet gear for Internet and intranet connections and multiprotocol MDS switches for storage area networks.

"The widespread adoption of server architectures such as blades, grid computing, and clustered applications is driving an emerging market opportunity within the data center," Luca Cafiero, a senior vice president at Cisco, said in a statement. "As our customers build out these new computing environments, it is important that we deliver server networking technologies to fit their needs."

The deal, which involves both cash and options, is expected to close in Cisco's fourth fiscal quarter, which ends July 30. Earlier this month, the company agreed to buy Concord Communications, a maker of network service management software, for $350 million.

Five-year-old Topspin has approximately 135 employees in Mountain View, Calif., and Bangalore, India.