Set on disrupting each other's business, Cisco and VMware are buying or backing startups to gain the upper hand in enterprise networking.
The latest beneficiary of this proxy war is Piston Cloud Computing, which just announced Cisco as an investor in a new $8 million round of financing.
As we previously reported, Piston Cloud is awesome for a lot of reasons.
Its founder, Joshua McKenty, is an ex-NASA guy who created a super-important technology called OpenStack. OpenStack is like an operating system for cloud computing, the catch-all term for the way more and more software is migrating up into the Internet.
OpenStack was built by a big consortium of IT vendors, including Cisco, and it sparked a major war in the IT industry between players like Red Hat, VMware, and Citrix.
(We also love Piston because they dressed employees up as characters from the game Clue for their corporate photos.)
Cisco's investment in Piston is interesting because Piston is designing OpenStack software for enterprise use. It competes head to head with VMware's vCloud operating system.
VMware turned Cisco, formerly a close partner, into an enemy last summer when it spent $1.26 billion to buy a startup called Nicira. Nicira makes a software-defined networking product that severely disrupts Cisco's bread-and-butter networking-equipment business.
Until last summer, Cisco and VMware were bosom buddies, with important Cisco products relying on VMware technology. They also own a successful joint venture called VCE.
Since the Niciral deal went down, though, Cisco has been racking up ways to disrupt VMware. For instance:
- Cisco developed its own version of OpenStack, which lets it stop being a VMware customer, sources told Business Insider.
- A couple of weeks ago, Cisco bought a stake in Parallels, a company that has technology that competes with VMware's core virtualization software line.
- And today, it invested in Piston.
Other investors in Piston's $8 million round include Hummer Winblad, True Ventures, and Data Collective.
CORRECTION: This story originally reported the funding amount as $9 million.
