NeoPath Networks has attracted the attention of Cisco Systems and also hired Network Appliance's vice president of international sales as its new COO.

NeoPath's latest $11 million funding round included participation by Cisco and previous investors August Capital, DCM-Doll Capital Management and Gabriel Venture Partners. The company also announced the appointment of NetApp executive Ali Zadeh as chief operating officer.

Cisco had this to say about its interest in the file virtualization startup: "Cisco believes that NeoPath offers a strong storage migration tool and are getting traction in the market. In addition, we are interested in their vision for virtualization in the network attached storage (NAS) space and are interested in seeing how this space develops."

Greg Schulz, founder and senior analyst at StorageIO, said file virtualization is catching on because it helps "tame the proliferation and management of NAS and file server sprawl."

With easy-to-deploy NAS appliances growing by leaps and bounds, management issues such as transparent data movement, load balancing, consolidation, replacement and upgrades are driving the need for virtualization, says Schulz.

"It's actually not all that different from the block storage virtualization hype of the past several years, except the pain point is being felt more with NAS, so it may gain more traction," says Schulz.

"Given how NAS will continue to grow in adoption and capabilities, it is thus a growth market, so people want to be part of that movement," he says.

For Cisco, which has mainly targeted storage networking markets such as Fibre Channel switches and WAFS, the NeoPath deal is a move into more direct data management, although Cisco also has a NAS reseller agreement with EMC. Cisco's storage ambitions are well known, leaving some to speculate that the networking giant may eventually sell a full line of storage products (see Cisco's Year of Storage Acquisitions).

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