Cisco Drops Data-Storage Hardware Line

Cisco Systems Inc. said it would stop selling data-storage hardware, a business that it entered with its $415 million acquisition of Whiptail in 2013.

New Jersey startup Whiptail specialized in equipment that stores data on chips known as flash memory rather than disk drives, a technology that has attracted many large and small competitors. Cisco, which had previously moved beyond networking gear to server systems, had said Whiptail's technology could help boost the performance of those systems.

But Cisco said Friday it would discontinue the resulting line of products, known as Invicta, as part of recent efforts to narrow its focus on the most promising businesses. A Cisco spokeswoman said some employees would lose their jobs, but she declined to disclose how many people would be affected.

Cisco entered the storage market despite the risk of angering longtime partners that sold competing hardware. Tim Stammers, a senior analyst at 451 Research, said the company tried to use other terms than "data storage" when discussing Invicta, a tactic he called a "silly dance."

The Invicta products also suffered from technical problems, Mr. Stammers noted. The Cisco spokeswoman said the company recently held shipments for several months while it addressed the issues.

Cisco's disclosure came the day after it announced the sale of its TV set-top unit to Technicolor SA for $600 million, a business it entered as a result of its $6.9 billion acquisition of Scientific Atlanta Inc. in 2006.

Chuck Robbins, who is expected to assume the CEO post on Monday from John Chambers, said in a blog post this week that the company would continue to focus its investments on businesses with the biggest potential payoff.

The latest decision is understandable, said Daniel Crain, the former Whiptail CEO, who temporarily worked at Cisco following the purchase.

"Chuck is the new CEO and is focusing on where he thinks the company should go," he said. "I can't do anything other than support him."

Cisco's move was reported Thursday by the news site CRN.

Write to Don Clark at [e-mail]

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