California: California based semiconductor design innovator AMD has signed a definitive agreement to acquire microserver startup SeaMicro for approximately $334 million, of which $281 million will be paid in cash. The acquisition would enable AMD to accelerate its strategy to deliver disruptive server technology to its OEM customers. Also, it will be able to offer server building blocks tuned for the fastest growing workloads such as dynamic web content, social networking, search, and video. It also plans to offer the AMD Opteron processor-based solutions which combine AMD and SeaMicro’s technology, in the second half of 2012. The transaction is expected to be accretive to earnings after 2012. AMD will fund the cash portion with its existing cash reserves.

According to Rory Read, President and CEO, AMD, “SeaMicro is a pioneer in low power system and fabric technology. The combination of AMD’s capabilities and SeaMicro’s system and fabric technology, positions AMD with a compelling, differentiated position to attack the fastest growing segment of the server market.”

SeaMicro was founded in 2007 by Anil Rao, Gary Lauterbach, and Andrew Feldman. It is backed by Khosla Ventures, Draper Fisher Jurvetson, and Crosslink Capital. “Cloud computing has brought a sea change to the data center by dramatically altering the economics of compute by changing the workload and optimal characteristics of a server. By becoming a part of AMD, we will have access to new markets, resources, technology, and scale that will provide us the opportunity to work tightly with our OEM partners.

 Prior to co-founding SeaMicro, Rao was the Director of Product Management and Marketing at Juniper Networks and the Director of Product Management at Force10 Networks. He has also held senior product management positions at ONI (Ciena) and Procket Networks (Cisco). Rao has held senior engineering positions at AT&T and Nortel Networks. He pursued MBA from Haas School of Business at University of California Berkeley, and a Masters in Computer Science from Arizona State University.