Cisco To Ramp Up Intercloud Offerings With Piston Acquisition

Cisco Systems, Inc. (CSCO) expressed its intent to acquire a privately-held firm, Piston Cloud Computing. Financial terms of the deal were not disclosed.

Launched in 2011, Piston Cloud Computing developed Piston CloudOS, an operating system that manages clusters of commodity servers in data centers as a single pool of readily available resources. The resources can be shared by any service, such as OpenStack, Hadoop, Spark, Docker Swarm and Mesos.

The acquisition is likely to accelerate Cisco’s Intercloud strategy which connects private, public and hybrid clouds in collaboration with its partners. The company plans to invest over $2 billion to assemble its expanded cloud business over the next couple of years.

Piston's OpenStack-based Cloud Platform

Piston's OpenStack-based cloud platform will step up Cisco's strategy to assemble the Intercloud.

Large scale OpenStack installations are a critical component of Cisco's Intercloud strategy. The globally accepted OpenStack has the ability to handle nearly infinite workload on any hypervisor and on both private and public clouds.

The Piston Cloud Computing acquisition will play a critical role in accelerating Cisco customers’ transition to the cloud. This will help the companies to equal the as-a-Service operational benefits of public cloud with the security and control offered by private cloud.

Also, Piston Cloud Computing through its enhanced distributed and automated deployment systems will help Cisco to deliver unique Intercloud offerings.

Looking Forward

Post acquisition, Piston's employees will join Cisco's Cloud Services team.

Cisco continues to build out its Intercloud initiative both internally and through acquisitions. In this regard, in Sep 2014, the company acquired Pasadena, CA-based, privately held, Metacloud, enabling businesses to run private clouds based on OpenStack.

Cisco currently has a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the same space are Infinera Corporation (INFN), Broadcom Corp. (BRCM) and Silver Spring Networks, Inc. (SSNI). While Infinera and Broadcom sport a Zacks Rank #1 (Strong Buy), Silver Spring has a Zacks Rank #2 (Buy).