Summary:

Mellanox, the networking chip company famous for its Infinband products has agreed to to buy photonics startup Kotura in an all-cash deal. The purchase comes after Kotura started making products for the data center.

networking abstract
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Mellanox, the company famous for its Infiniband chips but which is also branching out into Ethernet, says it intends to buy photonics startup Kotura in a cash deal valued at $82 million. The deal is expected to close in the second half of 2013.

Koruta, which I profiled last November, makes a photonics chip that allows signals to pass between chips using light (photons) instead of electrons. This makes communications between chips faster, something becoming more important inside the data center as networks become flatter, faster and fatter.

The Kotura chip is a fiber-based transceiver that can deliver 100 gigabits per second inside the data center. The transceiver could live on a board next to the CPU or inside a switch and could eventually expand to deliver a terabit per second (Tbps). Currently it’s used in high-performance compute clusters, which are also the most-popular home for Infiniband. From my post in November:

While one 1 Tbps is crazy fast when you consider that many data centers are currently upgrading to 10 gigabit Ethernet between servers, it’s going to be necessary. Arlon Martin, VP of Marketing, Government Contracts & Industry Relations at Kotura, tells me that customers are building products for the high-performance computing sectors but also for real-time data processing. The goal is bringing a low-power and less expensive optical part into a rack of servers, able to scale up to terabit per second capacities.

Kotura isn’t the only company trying to bring fiber optics into the data center. Plexxi is building fiber-based switches, while Facebook and the Open Compute Project in January announced their own plans to integrate photonics into their open hardware program. Intel, Cisco and IBM all have research or have acquired startups in this space as well. With its emphasis on fast networking, it makes sense for Mellanox to follow suit.

The company plans to continue offering the Kotura transceiver and open a research center in Monterrey Park, Calif., where Kotura is headquartered. From the Mellanox release:

“Operating networks at 100 Gigabit per second rates and higher requires careful integration between all parts of the network. We believe that silicon photonics is an important component in the development of 100 Gigabit InfiniBand and Ethernet solutions, and that owning and controlling the technology will allow us to develop the best, most reliable solution for our customers,” said Eyal Waldman, president, CEO and chairman of Mellanox Technologies.

At the time of my profile, Kotura had raised undisclosed millions from ARCH Venture Partners, Fuse Capital, GF Private Equity and others. It has an established customer base in the telecommunications business where it has sold product since 2006. But last year it began targeting the data center, where it apparently attracted Mellanox’s eye.

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