On Monday, August 21st, tech communications company Cisco (NASDAQ:$CSCO) announced that it is planning to buy Springpath, Inc. (traded privately), a tech company that specializes in hyperconvergence software. Springpath has recently designed and developed a file system that is built specifically for hyperconvergence, which allows for server-based storage systems. As such, if Cisco were to successfully acquire Springpath, it will bring forth further innovation for its data center technologies to its customers.

Cisco’s decision to acquire Springpath actually stems from a long-term partnership between the two companies since early 2016, when they merged to create HyperFlex. HyperFlex was one of the first fully formed-and-functioning infrastructure systems that made use of hyperconvergence. Since the mutual work on HyperFlex, Cisco and Springpath have come together in product development and marketing strategies. As such, not only will Cisco be able to further its expansion plans, it will be able to offer its customers a simpler and more economic software infrastructure.

“This acquisition is a meaningful addition to our data center portfolio and aligns with our overall transition to providing more software-centric solutions,” Cisco’s Vice President in Corporate Business Development Rob Salvagno stated. “Springpath’s file system technology was built specifically for hyperconvergence, which we believe will deliver sustainable differentiation in this fast-growing segment. I’m excited to be able to provide our customers and partners with the simplicity and agility they need in data center innovation.”

The acquisition will cost Cisco about $320 million in cash as well as equity awards. Additional retention-based incentives will also be included in the acquisition costs. The deal is expected to be finalized and closed by Cisco’s 2018 first quarter.

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