Cisco brewing new storage products?
Reuters
August 19, 2002, 12:31 PM PT
Cisco Systems is expected to launch this week the first versions of its Andiamo Systems storage network switches, according to an analyst and industry trade magazine.
The San Jose, Calif.-based Internet-traffic equipment maker is expected to introduce the storage products during its annual U.S. sales meeting Tuesday or Wednesday in Los Angeles, Lehman Brothers analyst Tim Luke said. The first of the new products will likely be shipped in January, ByteandSwitch.com, an online networking industry publication, reported last week, citing sources familiar with Cisco's plans.
A Cisco spokeswoman declined to comment, although Chief Executive John Chambers has said often in the past that the storage market is one that offers strong growth opportunity for the company.
Cisco owns a small stake in Andiamo. ByteandSwitch said the announcement likely means Cisco will purchase the rest of privately held Andiamo.
Cisco previously said in a filing with the Securities and Exchange Commission that it would buy the rest of an unidentified company that analysts have identified as Andiamo for a price that could be anywhere from zero to $2.5 billion in Cisco shares. Cisco also said in the Securities and Exchange filing that it had committed to provide additional funding of about $100 million to the unidentified company.
"Storage has been a key growth market eyed by Cisco for some time," Luke said in the research note. "We believe the introduction of Andiamo storage switches, which are supposed to have similar density and features as industry leading platforms such as the ones from Brocade, would be viewed by investors as an incremental positive as Cisco finally makes this key product announcement," he added.
Training and testing on the new storage products would likely start in the fourth quarter, with availability in the first quarter, Luke said.
Cisco's new products will not generate any meaningful near-term revenue, but is a good strategic move as the global storage switch and router market is estimated to be worth roughly $1 billion this year, he said.
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