Cisco Systems is extending its business in the field of grid computing and server virtualization by acquiring Topspin Communications, a company that has already partnered with big names from the computer industry like Dell, HP, IBM, NEC and Sun.

The price paid by Cisco Systems for Tospin is 250 million dollars in a combination of shares and cash and the deal will be closed in July, this year. All Topspin's 135 employees will be joining Cisco's own Data Center, Switching, and Wireless Technology Group.

Luca Cafiero, Cisco's Senior Vice President, Data Centre, Switching and Wireless Technology Group said "The widespread adoption of server architectures such as blades, grid computing, and clustered applications is driving an emerging market opportunity within the data centre. As our customers build out these new computing environments, it is important that we deliver server networking technologies to fit their needs."

The deals means that Cisco will be able to offer its customers the flexibility to build their networks based on grid designs. The acquisition will also allow Cisco to complement its existing network switching and storage switching systems. These include the Ethernet-based Catalyst switching platform for Internet/intranet infrastructure and its multiprotocol MDS switches for storage area networks (SANs).

"By adding Topspin's server fabric switches and virtualisation software, alongside our industry leading portfolio of Ethernet and SAN switches we are able to offer our customers compelling end-to-end data centre switching capabilities" said Cafiero.