Sun Sharpens Edge Strategy with Acquisition

Sun Microsystems Tuesday bolstered its networking
vision, saying it has plans to acquire data center switch maker Nauticus Networks.

Santa Clara, Calif.-based Sun said it would purchase the privately held
firm for an undisclosed amount of cash that it will pull from its $5.2
billion in reserves. The company said it expects the deal to close sometime
in the next three months after going through the regular rigmarole of
shareholder and federal scrutiny. This is the first time the two companies
have had anything to do with each other, according to a Sun spokesperson.

After the acquisition finalizes, Sun said Nauticus would become a part of
its Volume Systems Products (VSP) organization under the watchful eye of
company executive vice president Neil Knox. VSP consists of such products as Sun’s
line of entry-level servers and blade servers
including its SunFire 280R, V210, V240, and V880 models.

Framingham, Mass.-based Nauticus is best known for its data center
switches such as its Nauticus N2000. The company also specializes in
technologies that function beyond the normal realm of switching, including
SSL, security, load balancing and virtualization.

But don’t expect Sun to
get into direct competition with networking manufacturers such as Cisco
Systems.

“We would not be in direct competition with Cisco,” Sun Volume System
Products Marketing Manager Kathy Pries told internetnews.com. “At
this point, our engineers are evaluating their technologies. Most likely it
will be integrated into all of our Volume Systems Products. We see this as a
good way as the Internet is maturing with edge services to better handle
load balancing, firewalls and caching and help us architect at the front end
of the data.”

While Pries said the Nauticus deal does add to the overall picture of
what Sun wants to do with its network edge strategy, it is only a small
piece compared to Sun’s recently announced chip
making partnership
with AMD.

“This is a small piece to a bigger puzzle in that it is a component to
the services that we can offer in the data center,” Pries said.

Nauticus’ future at Sun does, however, bode well for the company’s N1
plans. N1 is the company’s services platform that helps data center
operators manage server and computing resources independent of vendor or
platform. Sun is battling with other top-tier vendors like IBM , Hewlett-Packard and Dell for customer contracts in this area.

“Initially, Nauticus will not tap into N1, but as we move along further
it might in the whole management vision of the data center,” Pries said.

Currently, Sun is in what it calls Phase 2 of its four-year N1 strategy.
This year, Sun said it will develop its hardware and software to address
the needs of administrators to specify the business service definition for a
service, such as electronic banking. In the final phase, Policy-Automation, slated for 2004-2005, application service level objectives will be automatically maintained by N1. For
example, the e-banking service set-up in Phase 2 can be set to give priority
access to “VIP” clients.

For Nauticus, the company had spent the last two years involved with
funding its business, gaining $6
million from Advent International. In total, the company banked more than
$38 million in venture capital since its founding in October 2000.


Previous
backers include Charles River Ventures, Matrix Partners and North Bridge
Venture Partners. Nauticus’ first round came in early 2001 at a time when
telecommunications gear makers were hot among investors.

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