Sun to acquire Nauticus for content switching

Sun to acquire Nauticus for content switching

Sun Microsystems has agreed to acquire privately-held Nauticus Networks, which makes content switches for the data centre, in a move that could provide a technology boost for its blade servers, Sun announced Wednesday.

Nauticus makes a family of data centre switches called the N2000 Series, designed to help companies ensure the security and availability of Web-based applications. The switches are based on a Nauticus chipset known as TideRunner and offer SSL (Secure Sockets Layer) acceleration, load balancing, virtualization and other functions.

Sun is likely to integrate Nauticus' technology with its blade server offerings, although it's too soon to talk about when that will happen, said Kathy Pries, group marketing manager for Sun's Volume Systems Products Group. Sun hasn't decided yet whether it will also sell Nauticus' switches on a stand-alone basis, she said.

The move is interesting because about two years ago, each of the big server vendors decided to leave the business of content switching to network equipment makers such as Cisco Systems Inc. and Nortel Networks Corp., said Jonathan Eunice, principal analyst with Illuminata Inc. in Nashua, New Hampshire.

"All the big system vendors are finding now that the choice they made to walk away from content switching doesn't fit very well with their ideas for virtualized, on-demand computing. If you can't control what's coming into your server or coming out of your server -- if you don't have the facility to manage those information flows and do it with grace -- then it's hard to have the end-to-end control that the server vendors are promising," Eunice said.

Sun has apparently decided to build that capability into its high-volume systems, potentially giving a lift to its N1 initiative for simplifying data center management, he said. At the same time, by using Nauticus' technology but not selling its products, Sun reduces its risk of aggravating Cisco, one of its important partners, by competing with it directly, Eunice said.

Many of the stand-alone content switch players were bought up during the dot-com bubble, he noted. Cisco acquired ArrowPoint in 2000 for $5.7 billion in stock, while Nortel bought Alteon WebSystems the same year, for $7.8 billion in stock. It's likely that Sun got a much better deal in buying Nauticus, Eunice said.

"I don't think the survivors could ask for even a fraction of those amounts," he said.

Sun expects to close the deal in the third quarter of its 2004 fiscal year, which means by the end of June, subject to standard conditions, the company said. Terms of the all-cash transaction weren't disclosed. When the deal is completed, Nauticus will become part of Sun's Volume Systems Products Group under Executive Vice President Neil Knox.

Nauticus was founded in 2000 and is based in Framingham, Massachusetts. Its N2000 switches deliver up to 24,000 connections per second of SSL and 4G bps of cryptographic throughput, according to information on its Web site.

If the acquisition goes through, Nauticus' workforce of approximately 45 will be offered jobs at Sun, although its Framingham offices will likely be closed, Pries said.

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