March 7, 2011 – Despite impressive growth from some its arch rivals (most notably, NetApp) EMC appears to be widening the gap between itself and its collective competitors, according to a report on the disk systems market by IDC. The market research company recently issued statistics for the fourth quarter and full-year 2010, including market size, vendor shares and revenues.
EMC capped 2010 with a 25.6% market share on revenue of $5.44 billion in the external disk systems market. That compares to a 2009 market share of 22.9% on revenue of $4.1 billion.
Rounding out the top 5 in 2010 were IBM (13.8% share, down slightly from a 14.3% slice the previous year), NetApp and HP (tied with 11.1% market shares) and Dell (9.1% share on 2010 revenue of almost $2 billion).
EMC posted impressive 2009—2010 revenue growth of 32.5%, but that was overshadowed by NetApp’s whopping 49.5% revenue growth. NetApp raked in $2.35 billion in 2010, vs. $1.57 billion in 2009.
Going forward, it will be interesting to see how HP’s acquisition of 3PAR, EMC's acquisition of Isilon, and Dell’s acquisition of Compellent will alter the market share dynamics and revenues.
Conspicuously absent from the top 5 in 2010 was Hitachi Data Systems. However, HDS did claw its way into the top 5 in the fourth quarter of 2010, ending the quarter in a virtual tie with Dell for the last spot. HDS garnered an 8.7% share in 4Q10 on revenue of $533 million vs. Dell’s 7.9% share on revenue of $483 million.
In the fourth quarter, EMC pulled in $1.58 billion for a 26% market share. That compares to a share of 23.9% in 4Q 2009 ($1.25 billion in revenue).
However, NetApp’s surge was again apparent in the fourth quarter of 2010. The company posted year-over-year revenue growth of 43.7% (vs. 26.3% for EMC), and closed the gap with HP on revenue of $630 million vs. HP’s $704 million.
Last year was a good one for the external disk systems market, which grew by 18.3% to top $21 billion.
Breaking down 4Q10 by market segments: the NAS market grew 41.3% year over year. EMC was #1 in NAS, followed by NetApp at 23.7%.
The iSCSI market posted equally impressive gains, growing 42.1% in 4Q10 vs. 4Q09. Dell was #1 in the iSCSI space with a 32.6% share, followed by HP (14.7%) and EMC (13.4%).
One more fun fact: EMC has been #1 in the external disk systems market for 14 consecutive years.
For more details, see IDC’s press release: “Worldwide Disk Storage Systems Finishes 2010 with Double-Digit Growth on Strong Fourth Quarter Results.”
Showing posts with label Dell. Show all posts
Showing posts with label Dell. Show all posts
Monday, March 7, 2011
Wednesday, January 19, 2011
EMC + Dell: It’s not Ozzie and Harriet anymore
January 19, 2011 -- It’s not news that the fissure is getting deeper, and wider, in the once rock-solid reseller relationship between EMC and Dell. And the fissure started looking more like a crevasse this week as the relationship became icy when EMC introduced the VNX and VNXe (entry level) line of unified storage systems as part of a massive rollout of new products (see “EMC announces 41 new products” ).
EMC chairman, CEO and president Joe Tucci made a number of interesting remarks this week, but I think the most strident was in a CRN article where he was quoted as saying: “In this product line [the VNXe] there is no Dell partnership. In any conversations we have had with Dell, Dell will not take up this partnership. They will not resell this product.” (See Joe Kovar’s article on CRN: “EMC’s Tucci: No Dell Partnership With VNX/VNXe.”)
Tucci went on to say: “Obviously some channel partners – maybe all channel partners – would see Dell as a competitor. Here we are saying ‘Don’t worry about it – Dell is not getting this product.’ It sounds like I’m saying ‘You can’t have it, Dell’ [but] basically, it doesn’t fit their strategy. It doesn’t fit our strategy.”
But it’s important to note that those comments related to the low-end VNXe (which has a starting price of less than $10,000), not the VNX line.
Here’s what Dell has to say, courtesy Dell spokesperson David Graves: “Dell is selling VNX through our reseller agreement. A Dell-branded OEM version of VNX is still in discussion. Dell and EMC have mutually agreed not to use Dell as a channel for the VNXe product – either as a reseller or a Dell-branded OEM offering.”
So Dell will not resell the VNXe but will – at least for now – resell the VNX as an EMC-branded product with the (unlikely) possibility of reselling it with the Dell-EMC brand.
A little (probably unnecessary for InfoStor readers) history: The EMC-Dell relationship began 10 years ago and was for some time a wildly successful win-win. The fissure in the relationship probably started to appear when Dell acquired EqualLogic, which put Dell on the storage map. (In its last reporting period, Dell stated that revenue from the EqualLogic line grew 66% over the previous year.)
The fissure widened when Dell made a bid for 3PAR (eventually losing a bidding war with HP) and started looking like a chasm when Dell said it would acquire Compellent, which is still in progress.
The decision (by EMC or Dell or both?) for Dell to not resell the VNXe is a real boon to EMC’s resellers, which otherwise would have had to compete with Dell. But the two companies should do the entire channel a favor and just sever the relationship and move on.
Related articles:
EMC announces 41 new products (InfoStor)
EMC’s Tucci: No Dell Partnership With VNX/VNXe (CRN)
EMC chairman, CEO and president Joe Tucci made a number of interesting remarks this week, but I think the most strident was in a CRN article where he was quoted as saying: “In this product line [the VNXe] there is no Dell partnership. In any conversations we have had with Dell, Dell will not take up this partnership. They will not resell this product.” (See Joe Kovar’s article on CRN: “EMC’s Tucci: No Dell Partnership With VNX/VNXe.”)
Tucci went on to say: “Obviously some channel partners – maybe all channel partners – would see Dell as a competitor. Here we are saying ‘Don’t worry about it – Dell is not getting this product.’ It sounds like I’m saying ‘You can’t have it, Dell’ [but] basically, it doesn’t fit their strategy. It doesn’t fit our strategy.”
But it’s important to note that those comments related to the low-end VNXe (which has a starting price of less than $10,000), not the VNX line.
Here’s what Dell has to say, courtesy Dell spokesperson David Graves: “Dell is selling VNX through our reseller agreement. A Dell-branded OEM version of VNX is still in discussion. Dell and EMC have mutually agreed not to use Dell as a channel for the VNXe product – either as a reseller or a Dell-branded OEM offering.”
So Dell will not resell the VNXe but will – at least for now – resell the VNX as an EMC-branded product with the (unlikely) possibility of reselling it with the Dell-EMC brand.
A little (probably unnecessary for InfoStor readers) history: The EMC-Dell relationship began 10 years ago and was for some time a wildly successful win-win. The fissure in the relationship probably started to appear when Dell acquired EqualLogic, which put Dell on the storage map. (In its last reporting period, Dell stated that revenue from the EqualLogic line grew 66% over the previous year.)
The fissure widened when Dell made a bid for 3PAR (eventually losing a bidding war with HP) and started looking like a chasm when Dell said it would acquire Compellent, which is still in progress.
The decision (by EMC or Dell or both?) for Dell to not resell the VNXe is a real boon to EMC’s resellers, which otherwise would have had to compete with Dell. But the two companies should do the entire channel a favor and just sever the relationship and move on.
Related articles:
EMC announces 41 new products (InfoStor)
EMC’s Tucci: No Dell Partnership With VNX/VNXe (CRN)
Sunday, January 2, 2011
The Top Ten Storage Acquisitions of 2010
January 3, 2011 -- I originally posted a Top Ten acquisitions list in September, under the assumption that after the blockbuster HP-3PAR buyout we may have seen the last of the big storage acquisitions for the year. Wrong. The storage industry capped a crazy year of M&A fever with the EMC-Isilon and Dell-Compellent acquisitions. With those additions, I had to knock off from the list a few of the relatively minor acquisitions of the year, including SolarWinds’ acquisition of Tek-Tools and Exar’s buyout of Neterion.
Here's my revised list of the Top 10 storage acquisitions of 2010, in ascending order:
#10: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing.
PMC-Sierra acquired Adaptec this summer for a mere $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
PMC-Sierra’s acquisition of Adaptec puts the company in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought primarily on the semiconductor front.
Related articles:
PMC-Sierra to buy Adaptec’s channel storage business
PMC-Sierra ships 6Gbps SAS controllers
#9: NETAPP – BYCAST
The terms of the NetApp-Bycast deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically-dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#8: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE (and going head-to-head with Ethernet giants Broadcom and Intel, in addition to long-time rival QLogic and others).
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s strategy. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), including Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#7: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody, and (along with #6, see below) confirmed that capacity optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
I think Dell will initially leverage Ocarina’s technology in image-intensive, fixed-content applications on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will probably continue to resell Symantec, CommVault and Data Domain software where those companies’ technologies make more sense, or where customers demand it.
And in a related Top 10 acquisition . . .
#6: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in a top spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
The Storwize product line is now part of the IBM Real-time Compression business unit.
See “IBM to Buy Storwize for Real-Time Data Compression” on InfoStor partner site Enterprise Storage Forum.
#5: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor and it also ranked high in dollars, being valued at $242 million.
That amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, with vendors such as Dell and HP considered to be potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#4: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list.
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum became the foundation of a new division within EMC’s Information Infrastructure business.
Greenplum is a nice fit with EMC’s cloud initiatives, but it also heats up the competition between EMC, Oracle, IBM and Sun.
See “EMC acquires data warehousing vendor Greenplum”
#3: DELL – COMPELLENT
This one may not be a done deal, but it’s pretty close so Dell’s “take-under” acquisition of Compellent takes the #3 spot on our list. The latest offer is $27.75 per share, which translates into about $960 million, or $820 million net of Compellent’s cash.
In a sense, Compellent is a consolation prize after Dell lost the bidding war with HP over 3PAR. Acquiring 3PAR would have solidified Dell’s position in high-end disk arrays, but Compellent fills out Dell’s mid-range (and slightly high-end) positioning.
It will be interesting to see how Dell positions Compellent’s disk arrays relative to the EqualLogic product line (which grew 66% in revenues over the last year), but it will be even more interesting to see what happens to Dell’s EMC reseller agreement.
#2: EMC – ISILON
EMC shelled out around $2.25 billion for scale-out NAS vendor Isilon Systems, net of Isilon’s existing cash balance. That’s an eye-popping amount of cash, particularly considering that Isilon was barely profitable, but market researcher IDC predicts that the scale-out NAS market will grow on average about 36% annually, reaching an estimated $6 billion in 2014.
According to EMC’s press release on the announcement: “EMC’s Atmos and Isilon’s solutions will offer customers a highly scalable, low-cost storage infrastructure for managing ‘Big Data’ . . . EMC Atmos object storage provides the perfect complement to Isilon for massive globally distributed environments and object access to data for usages like Web 2.0 applications.”
EMC officials estimate that the combined revenue from the Isilon and Atmos platforms will hit a $1 billion run rate during the second half of 2012. EMC also emphasized synergies between Isilon’s clustered scale-out NAS platforms and systems/software from Greenplum.
Isilon wasn’t EMC’s only acquisition this year. The company bought Bus-Tech about a week prior to the Isilon announcement. Bus-Tech specializes in VTL technology for mainframe environments. The financial terms of the Bus-Tech acquisition were not disclosed.
See “EMC snaps up Isilon for $2.25 billion” on InfoStor partner site Enterprise Storage Forum.
#1: HP – 3PAR
By virtue of its price ($2.4 billion) and the drama of the bidding war with Dell (which started at $1.15 billion), HP’s acquisition of 3PAR was clearly the #1 storage acquisition of 2010.
The acquisition of 3PAR puts HP in a much better competitive position, but it will be interesting to see what happens to the rest of HP’s disk array lineup. Does the 3PAR acquisition sound the death knell for the venerable EVA line? And what will be the fate of HP’s reseller deal with Hitachi? Months after the acquisition was announced, we still have more questions than answers on this acquisition.
2010 wasn’t a record-setting year in terms of the number of storage acquisitions, but it certainly was a record setter in terms of the amount of money that was shelled out.
As we enter 2011, the big question is: Who will be acquired next? According to the financial analyst community, CommVault is the most likely storage vendor to be acquired, but other possibilities cited by financial analysts include (in no particular order) Xiotech, Brocade, BlueArc, FalconStor and NetApp.
Related article:
Top 10 Storage Predictions for 2011 (by Henry Newman, on Enterprise Storage Forum)
Here's my revised list of the Top 10 storage acquisitions of 2010, in ascending order:
#10: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing.
PMC-Sierra acquired Adaptec this summer for a mere $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
PMC-Sierra’s acquisition of Adaptec puts the company in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought primarily on the semiconductor front.
Related articles:
PMC-Sierra to buy Adaptec’s channel storage business
PMC-Sierra ships 6Gbps SAS controllers
#9: NETAPP – BYCAST
The terms of the NetApp-Bycast deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically-dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#8: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE (and going head-to-head with Ethernet giants Broadcom and Intel, in addition to long-time rival QLogic and others).
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s strategy. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), including Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#7: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody, and (along with #6, see below) confirmed that capacity optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
I think Dell will initially leverage Ocarina’s technology in image-intensive, fixed-content applications on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will probably continue to resell Symantec, CommVault and Data Domain software where those companies’ technologies make more sense, or where customers demand it.
And in a related Top 10 acquisition . . .
#6: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in a top spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
The Storwize product line is now part of the IBM Real-time Compression business unit.
See “IBM to Buy Storwize for Real-Time Data Compression” on InfoStor partner site Enterprise Storage Forum.
#5: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor and it also ranked high in dollars, being valued at $242 million.
That amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, with vendors such as Dell and HP considered to be potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#4: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list.
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum became the foundation of a new division within EMC’s Information Infrastructure business.
Greenplum is a nice fit with EMC’s cloud initiatives, but it also heats up the competition between EMC, Oracle, IBM and Sun.
See “EMC acquires data warehousing vendor Greenplum”
#3: DELL – COMPELLENT
This one may not be a done deal, but it’s pretty close so Dell’s “take-under” acquisition of Compellent takes the #3 spot on our list. The latest offer is $27.75 per share, which translates into about $960 million, or $820 million net of Compellent’s cash.
In a sense, Compellent is a consolation prize after Dell lost the bidding war with HP over 3PAR. Acquiring 3PAR would have solidified Dell’s position in high-end disk arrays, but Compellent fills out Dell’s mid-range (and slightly high-end) positioning.
It will be interesting to see how Dell positions Compellent’s disk arrays relative to the EqualLogic product line (which grew 66% in revenues over the last year), but it will be even more interesting to see what happens to Dell’s EMC reseller agreement.
#2: EMC – ISILON
EMC shelled out around $2.25 billion for scale-out NAS vendor Isilon Systems, net of Isilon’s existing cash balance. That’s an eye-popping amount of cash, particularly considering that Isilon was barely profitable, but market researcher IDC predicts that the scale-out NAS market will grow on average about 36% annually, reaching an estimated $6 billion in 2014.
According to EMC’s press release on the announcement: “EMC’s Atmos and Isilon’s solutions will offer customers a highly scalable, low-cost storage infrastructure for managing ‘Big Data’ . . . EMC Atmos object storage provides the perfect complement to Isilon for massive globally distributed environments and object access to data for usages like Web 2.0 applications.”
EMC officials estimate that the combined revenue from the Isilon and Atmos platforms will hit a $1 billion run rate during the second half of 2012. EMC also emphasized synergies between Isilon’s clustered scale-out NAS platforms and systems/software from Greenplum.
Isilon wasn’t EMC’s only acquisition this year. The company bought Bus-Tech about a week prior to the Isilon announcement. Bus-Tech specializes in VTL technology for mainframe environments. The financial terms of the Bus-Tech acquisition were not disclosed.
See “EMC snaps up Isilon for $2.25 billion” on InfoStor partner site Enterprise Storage Forum.
#1: HP – 3PAR
By virtue of its price ($2.4 billion) and the drama of the bidding war with Dell (which started at $1.15 billion), HP’s acquisition of 3PAR was clearly the #1 storage acquisition of 2010.
The acquisition of 3PAR puts HP in a much better competitive position, but it will be interesting to see what happens to the rest of HP’s disk array lineup. Does the 3PAR acquisition sound the death knell for the venerable EVA line? And what will be the fate of HP’s reseller deal with Hitachi? Months after the acquisition was announced, we still have more questions than answers on this acquisition.
2010 wasn’t a record-setting year in terms of the number of storage acquisitions, but it certainly was a record setter in terms of the amount of money that was shelled out.
As we enter 2011, the big question is: Who will be acquired next? According to the financial analyst community, CommVault is the most likely storage vendor to be acquired, but other possibilities cited by financial analysts include (in no particular order) Xiotech, Brocade, BlueArc, FalconStor and NetApp.
Related article:
Top 10 Storage Predictions for 2011 (by Henry Newman, on Enterprise Storage Forum)
Monday, December 13, 2010
Dell’s Compellent bid approaches $1 billion
December 13, 2010 – Dell this morning said it has reached a definitive agreement to acquire Compellent for $27.75 per share, or 25 cents more than Dell offered last Thursday. The $27.75 per share offer translates into about $960 million, or $820 million net of Compellent’s cash.
As I mentioned in my earlier post on this saga, the weird thing about it is that Dell’s offer is still significantly below what Compellent had been trading at. Compellent’s stock at one time hit $34 a share. So this is what the financial people call a “take-under.”
In fact, as I write this Compellent’s stock is trading at $27.92, which is still above Dell’s bid price. That would suggest that investors expect the price to go higher, although almost nobody expects a bidding war to ensue at this stage of the game.
Although most of the financial community seems to think that this is a done deal, it’s important to note that Compellent’s shareholders have yet to approve the deal (although both the Dell and Compellent boards have approved the terms of the deal). And it’s likely that lawsuits against Compellent’s board will be filed.
Since this story may not be over yet, it may be premature to speculate on how Dell will position the Compellent line vs. the Dell/EqualLogic line, but I presume that Dell would position Compellent’s arrays “above” the EqualLogic iSCSI arrays and primarily in the Fibre Channel SAN space.
Whatever the positioning between Compellent and EqualLogic, it’s certainly doubtful that the Dell-EMC reseller relation will last the two years left on the agreement (although Dell officials this morning said that they will continue to offer the EMC options).
According to a note by Stifel Nicolaus analyst Aaron C. Rakers: “For its October 2010 quarter, Dell generated storage revenue of $543 million (3.5% of total; ~3.8% if we include Compellent’s most recent results) revenue, which was up only 7% yr/yr (vs. industry growth rate at +19% yr/yr) and down 13% sequentially. Dell had reported that its EqualLogic (iSCSI SAN) revenue grew 66% yr/yr, which leaves us to estimate ~$165 million in revenue (~30% of Dell’s total storage revenue). IDC recently estimated that Dell had a ~9.1% revenue share in the total external disk storage market, which includes the Dell/EMC relationship; Dell having a ~34% estimated revenue share in the fast growing iSCSI SAN market with EqualLogic.”
Related blog post:
Dell closing in on Compellent acquisition (last Thursday)
As I mentioned in my earlier post on this saga, the weird thing about it is that Dell’s offer is still significantly below what Compellent had been trading at. Compellent’s stock at one time hit $34 a share. So this is what the financial people call a “take-under.”
In fact, as I write this Compellent’s stock is trading at $27.92, which is still above Dell’s bid price. That would suggest that investors expect the price to go higher, although almost nobody expects a bidding war to ensue at this stage of the game.
Although most of the financial community seems to think that this is a done deal, it’s important to note that Compellent’s shareholders have yet to approve the deal (although both the Dell and Compellent boards have approved the terms of the deal). And it’s likely that lawsuits against Compellent’s board will be filed.
Since this story may not be over yet, it may be premature to speculate on how Dell will position the Compellent line vs. the Dell/EqualLogic line, but I presume that Dell would position Compellent’s arrays “above” the EqualLogic iSCSI arrays and primarily in the Fibre Channel SAN space.
Whatever the positioning between Compellent and EqualLogic, it’s certainly doubtful that the Dell-EMC reseller relation will last the two years left on the agreement (although Dell officials this morning said that they will continue to offer the EMC options).
According to a note by Stifel Nicolaus analyst Aaron C. Rakers: “For its October 2010 quarter, Dell generated storage revenue of $543 million (3.5% of total; ~3.8% if we include Compellent’s most recent results) revenue, which was up only 7% yr/yr (vs. industry growth rate at +19% yr/yr) and down 13% sequentially. Dell had reported that its EqualLogic (iSCSI SAN) revenue grew 66% yr/yr, which leaves us to estimate ~$165 million in revenue (~30% of Dell’s total storage revenue). IDC recently estimated that Dell had a ~9.1% revenue share in the total external disk storage market, which includes the Dell/EMC relationship; Dell having a ~34% estimated revenue share in the fast growing iSCSI SAN market with EqualLogic.”
Related blog post:
Dell closing in on Compellent acquisition (last Thursday)
Thursday, December 9, 2010
Dell closing in on Compellent acquisition
December 9, 2010 – Putting to rest weeks of speculation, Dell announced today that it is in “advanced discussions” to buy Compellent for $27.50 per share, or approximately $876 million. The weird thing about this is that the $27.50 offer is about 18% less than Compellent’s closing price yesterday. That’s a rarity in the high-tech acquisition space, and the financial folks refer to it as a “take-under.”
It looks like I will be proved wrong. Although many financial analysts predicted that, after losing the battle with HP for 3PAR, Dell would set its sights on Compellent, I predicted that Dell would turn away from the over-priced storage stocks and make a few acquisitions in non-storage IT sectors.
As I write this, Compellent is trading at $29.37 per share. That would suggest that investors think that (a) a bidding war will ensue and/or (b) negotiations will drive the price up.
I doubt that a bidding war will ensue, mainly because none of the cash-rich storage giants really need Compellent’s technology (although at least one financial analyst predicted that NetApp might jump into the ring). Making a bidding war even less likely: Dell has more than $13 billion in cash, and even though it backed out of the 3PAR bidding there’s no way Compellent will go for much more than $1 billion vs. the $2.4 billion that 3PAR commanded.
Compellent’s stock has almost doubled over the past couple months due to acquisition rumors. And back in August (prior to the start of the 3PAR bidding contest) the stock was trading at about $12 a share.
If this deal goes through, it will be interesting to see how Dell positions Compellent’s products relative to Dell’s (enormously successful) EqualLogic line. There’s certainly a good deal of overlap there. But what will be more interesting is what happens to the Dell-EMC relationship, or lack thereof.
Both Dell and Compellent officials said that there was no assurance that the acquisition deal will be finalized, and they don’t plan to comment further until the deal is either consummated or goes south.
It looks like I will be proved wrong. Although many financial analysts predicted that, after losing the battle with HP for 3PAR, Dell would set its sights on Compellent, I predicted that Dell would turn away from the over-priced storage stocks and make a few acquisitions in non-storage IT sectors.
As I write this, Compellent is trading at $29.37 per share. That would suggest that investors think that (a) a bidding war will ensue and/or (b) negotiations will drive the price up.
I doubt that a bidding war will ensue, mainly because none of the cash-rich storage giants really need Compellent’s technology (although at least one financial analyst predicted that NetApp might jump into the ring). Making a bidding war even less likely: Dell has more than $13 billion in cash, and even though it backed out of the 3PAR bidding there’s no way Compellent will go for much more than $1 billion vs. the $2.4 billion that 3PAR commanded.
Compellent’s stock has almost doubled over the past couple months due to acquisition rumors. And back in August (prior to the start of the 3PAR bidding contest) the stock was trading at about $12 a share.
If this deal goes through, it will be interesting to see how Dell positions Compellent’s products relative to Dell’s (enormously successful) EqualLogic line. There’s certainly a good deal of overlap there. But what will be more interesting is what happens to the Dell-EMC relationship, or lack thereof.
Both Dell and Compellent officials said that there was no assurance that the acquisition deal will be finalized, and they don’t plan to comment further until the deal is either consummated or goes south.
Friday, December 3, 2010
Disk arrays: NetApp, HP duke it out for #3 spot
December 3, 2010 – In more good news for the rebounding storage industry, revenues from external disk systems grew 19% in Q3 2010 vs. Q3 2009, topping the $5 billion mark, according to a report from IDC. Revenues for the total (external and internal) disk systems market grew to almost $7 billion, representing an 18.5% year-over-year growth rate.
Total capacity shipped grew 65.2%.
In the external array market, EMC held on to its #1 spot by a wide margin, with $1.35 billion in Q3 revenue and a 26.1% market share. IBM was a distant second with $667 million in revenue and a 12.9% market share.
But the real race is for the #3 position, where NetApp and HP are in a virtual dead heat. (Even dead heats are virtual these days.) NetApp had an 11.6% market share in Q3, followed closely by HP with an 11.1% slice. IDC considers it to be a statistical tie when less than a one percent revenue difference separates two vendors.
Dell finished fifth, with a 9.1% market share on revenue of $471 million.
All of the top five vendors had healthy, double-digit revenue growth (ranging from 11.3% for HP to 28.3% for EMC), but it was NetApp that busted the charts with a whopping 54.9% growth rate.
Looking at the leader board trends over the past few quarters, it would seem safe to say that NetApp has blown past HP and is closing in on Big Blue, except for HP’s 3PAR acquisition. With HP’s marketing muscle behind the 3PAR product line, revenue could crank up pretty quickly. For now, however, 3PAR had a market share of only 0.83% in the third quarter. (Isilon’s slice was 0.75%.)
Other highlights from the IDC report: The NAS market was the fastest-growing segment of the overall storage systems market, posting 49.8% growth in Q3 2010 vs. Q3 2009. EMC led the NAS market with a 46.6% share, followed by NetApp with a 28.9% share.
The iSCSI segment of the overall market also did well, posting 41.4% revenue growth, with Dell/EqualLogic in the top spot (33.8% share) followed by EMC and HP in a tie for second place.
For more details, read the IDC press release: “External Disk Storage Systems Market Records Fourth-Highest Quarterly Revenue in Third Quarter”
Total capacity shipped grew 65.2%.
In the external array market, EMC held on to its #1 spot by a wide margin, with $1.35 billion in Q3 revenue and a 26.1% market share. IBM was a distant second with $667 million in revenue and a 12.9% market share.
But the real race is for the #3 position, where NetApp and HP are in a virtual dead heat. (Even dead heats are virtual these days.) NetApp had an 11.6% market share in Q3, followed closely by HP with an 11.1% slice. IDC considers it to be a statistical tie when less than a one percent revenue difference separates two vendors.
Dell finished fifth, with a 9.1% market share on revenue of $471 million.
All of the top five vendors had healthy, double-digit revenue growth (ranging from 11.3% for HP to 28.3% for EMC), but it was NetApp that busted the charts with a whopping 54.9% growth rate.
Looking at the leader board trends over the past few quarters, it would seem safe to say that NetApp has blown past HP and is closing in on Big Blue, except for HP’s 3PAR acquisition. With HP’s marketing muscle behind the 3PAR product line, revenue could crank up pretty quickly. For now, however, 3PAR had a market share of only 0.83% in the third quarter. (Isilon’s slice was 0.75%.)
Other highlights from the IDC report: The NAS market was the fastest-growing segment of the overall storage systems market, posting 49.8% growth in Q3 2010 vs. Q3 2009. EMC led the NAS market with a 46.6% share, followed by NetApp with a 28.9% share.
The iSCSI segment of the overall market also did well, posting 41.4% revenue growth, with Dell/EqualLogic in the top spot (33.8% share) followed by EMC and HP in a tie for second place.
For more details, read the IDC press release: “External Disk Storage Systems Market Records Fourth-Highest Quarterly Revenue in Third Quarter”
Wednesday, September 8, 2010
The Top 5 array vendors: HP #4, Dell #5
September 9, 2010 -- Against the backdrop of the HP-Dell-3PAR drama (which, in case you were in a coma, ended with HP victorious in its $2.4 billion buyout of 3PAR), IDC recently released its quarterly report on the disk systems market.
For the second quarter of this year, EMC retained its #1 ranking in the external disk systems space with almost twice the market share of #2 IBM. On Q2 revenue of almost $1.3 billion, EMC held a 25.7% market share compared to IBM's 13.6% slice on revenue of $680 million.
NetApp was #3 with an 11.4% share on revenue of $571 million, followed very closely by HP with an 11.3% share on revenue of $567 million (which is essentially a dead heat between the two vendors).
Rounding out the Top 5 was Dell, with a 9.4% share and revenue of $472 million.
Liz Conner, IDC's senior research analyst, storage systems, estimates 3PAR's share of the market at 0.58%.
Depending on how quickly HP can ramp the 3PAR revenue stream, it won't be long before HP is firmly in the #3 spot, followed by NetApp at #4.
Or maybe not. In terms of revenue growth in 2Q10 vs. 2Q09, NetApp was the big gainer, with an impressive 55.3% revenue growth rate, followed by EMC with a 40.6% growth rate. HP only had 20.9% growth year-over-year, and Dell posted a 17% increase. IBM was the laggard at 10.9%.
The "others" category in the external disk array market continues to decline. In 2Q09, "others" accounted for 33.5% of the market ($1.6 billion in revenue), but in 2Q10 that share slipped to 28.6% ($1.4 billion). So the "others" market share is approximately the same as EMC's share.
That stat will no doubt throw more fuel on the speculation fire regarding which disk array vendor(s) will be acquired next (e.g., Compellent, Isilon, Pillar, Xiotech, etc.).
If you add up all (external + internal) storage systems revenue, the market share rankings shift: HP (19.3%), EMC (19%), IBM (15.8%), Dell (12.3%), NetApp (8.4%).
The NAS and iSCSI SAN sectors continue to rack up impressive growth figures. The combined NAS+iSCSI market grew 29.2% year-over-year in the second quarter, to $4.2 billion. EMC had a 28.9% share, followed by NetApp at 13.6%.
The NAS market posted 51.1% growth year-over-year, with EMC taking a 45.6% share followed by NetApp with 25.2%.
And the iSCSI SAN market grew 49%, with Dell in the lead with a 32.9% slice, followed by HP, NetApp and EMC in a statistical tie for second place.
Overall, the external disk storage market grew 20.4%, topping $5 billion in the second quarter.
For more details, see IDC's press release: "Disk Storage Systems Market Sustains Strong Double-Digit Growth Across All Sectors in Second Quarter."
For the second quarter of this year, EMC retained its #1 ranking in the external disk systems space with almost twice the market share of #2 IBM. On Q2 revenue of almost $1.3 billion, EMC held a 25.7% market share compared to IBM's 13.6% slice on revenue of $680 million.
NetApp was #3 with an 11.4% share on revenue of $571 million, followed very closely by HP with an 11.3% share on revenue of $567 million (which is essentially a dead heat between the two vendors).
Rounding out the Top 5 was Dell, with a 9.4% share and revenue of $472 million.
Liz Conner, IDC's senior research analyst, storage systems, estimates 3PAR's share of the market at 0.58%.
Depending on how quickly HP can ramp the 3PAR revenue stream, it won't be long before HP is firmly in the #3 spot, followed by NetApp at #4.
Or maybe not. In terms of revenue growth in 2Q10 vs. 2Q09, NetApp was the big gainer, with an impressive 55.3% revenue growth rate, followed by EMC with a 40.6% growth rate. HP only had 20.9% growth year-over-year, and Dell posted a 17% increase. IBM was the laggard at 10.9%.
The "others" category in the external disk array market continues to decline. In 2Q09, "others" accounted for 33.5% of the market ($1.6 billion in revenue), but in 2Q10 that share slipped to 28.6% ($1.4 billion). So the "others" market share is approximately the same as EMC's share.
That stat will no doubt throw more fuel on the speculation fire regarding which disk array vendor(s) will be acquired next (e.g., Compellent, Isilon, Pillar, Xiotech, etc.).
If you add up all (external + internal) storage systems revenue, the market share rankings shift: HP (19.3%), EMC (19%), IBM (15.8%), Dell (12.3%), NetApp (8.4%).
The NAS and iSCSI SAN sectors continue to rack up impressive growth figures. The combined NAS+iSCSI market grew 29.2% year-over-year in the second quarter, to $4.2 billion. EMC had a 28.9% share, followed by NetApp at 13.6%.
The NAS market posted 51.1% growth year-over-year, with EMC taking a 45.6% share followed by NetApp with 25.2%.
And the iSCSI SAN market grew 49%, with Dell in the lead with a 32.9% slice, followed by HP, NetApp and EMC in a statistical tie for second place.
Overall, the external disk storage market grew 20.4%, topping $5 billion in the second quarter.
For more details, see IDC's press release: "Disk Storage Systems Market Sustains Strong Double-Digit Growth Across All Sectors in Second Quarter."
Thursday, August 26, 2010
HP to get 3PAR for $2.4 billion
September 2, 2010 -- The fat lady seems to have sung. Dell exited the 3PAR acquisition stage with the following statement by Dave Johnson, Dell's senior vice president, corporate strategy: "We took a measured approach throughout the process and have decided to end these discussions."
After what appears to be a lot of under-the-covers negotiations, HP ended the drama with a $33-per-share, $2.4-billion acquisition offer (see "Dell Ends 3PAR Talks After HP's $2.4 Billion Bid" on Enterprise Storage Forum).
After what we've seen over the past couple weeks, I'm hesitant to call this a done deal, but that appears to be the case.
So HP gets 3PAR's crown jewels of virtualization, cloud computing capabilities, storage/data tiering and thin provisioning (not to mention ASIC technology). The question now is: How will HP fold 3PAR's systems into its existing disk array lineup? 3PAR overlaps big time with HP's venerable EVA line, and to a lesser degree with the high-end systems that HP OEMs from Hitachi Data Systems. Something has to give, although it will probably be awhile until HP provides details.
For Dell, the question is: Now what? Many observers have speculated that Dell will go after another disk array vendor (Compellent, Isilon, Xiotech?), but none of those companies are a replacement for what Dell had in mind with the 3PAR bid. Maybe Dell will turn to networking (Brocade?). Or software (CommVault?).
Dell put its cards on the table, and finally folded. For now. Which table will it sit down to next?
In a side show next to the three-ring HP-Dell-3PAR circus, litigious Crossroads Systems yesterday filed a patent infringement lawsuit against 3PAR and, according to an article on PC World, D-Link, Rorke Data, Chelsio Communications, DataCore Software, iStor Networks and American Megatrends. According to that article (see "3Par Faces Lawsuit as Bidding War Continues"), the suit involves a patent for a storage router that provides virtual local storage on remote storage devices.
After what appears to be a lot of under-the-covers negotiations, HP ended the drama with a $33-per-share, $2.4-billion acquisition offer (see "Dell Ends 3PAR Talks After HP's $2.4 Billion Bid" on Enterprise Storage Forum).
After what we've seen over the past couple weeks, I'm hesitant to call this a done deal, but that appears to be the case.
So HP gets 3PAR's crown jewels of virtualization, cloud computing capabilities, storage/data tiering and thin provisioning (not to mention ASIC technology). The question now is: How will HP fold 3PAR's systems into its existing disk array lineup? 3PAR overlaps big time with HP's venerable EVA line, and to a lesser degree with the high-end systems that HP OEMs from Hitachi Data Systems. Something has to give, although it will probably be awhile until HP provides details.
For Dell, the question is: Now what? Many observers have speculated that Dell will go after another disk array vendor (Compellent, Isilon, Xiotech?), but none of those companies are a replacement for what Dell had in mind with the 3PAR bid. Maybe Dell will turn to networking (Brocade?). Or software (CommVault?).
Dell put its cards on the table, and finally folded. For now. Which table will it sit down to next?
In a side show next to the three-ring HP-Dell-3PAR circus, litigious Crossroads Systems yesterday filed a patent infringement lawsuit against 3PAR and, according to an article on PC World, D-Link, Rorke Data, Chelsio Communications, DataCore Software, iStor Networks and American Megatrends. According to that article (see "3Par Faces Lawsuit as Bidding War Continues"), the suit involves a patent for a storage router that provides virtual local storage on remote storage devices.
Tuesday, August 24, 2010
HP, Dell, 3PAR: Bidding war or done deal?
August 24, 2010 – We should probably just let this drama play out and then comment on it, but who can resist? As the storage world waits for Dell’s response to HP’s $1.6 billion counter-offer for 3PAR, I thought I’d take a stab at some of the questions that are being bandied about.
Will Dell counter? At first, I thought this was a done deal for HP. In an acquisition context, a 33% raise leads to an opponent folding. Then again, maybe this “I’ll see your $1.15 billion and raise you $450 million” is just these guys anteing up. This pot could get close to, or exceed, $2 billion.
Yes, I think Dell will counter, but I don’t think it would be wise. And the reason for that leads me to the next question.
Is 3PAR better for HP or Dell? I think it’s better for HP, but this is highly arguable.
HP has a solid high-end lineup with the HDS OEM deal, but I doubt that HP’s Dave Donatelli (formerly with EMC) is a reseller type of guy. 3PAR gives HP its own technology, and possibly a better weapon against EMC. The question would then be: What would HP do with the HDS line? And if HP follows Oracle’s suit on that, What becomes of HDS? (HP execs said that they would continue with the HDS partnership, business as usual.)
HP knows how to sell really high-end gear, which can’t be said about Dell. Plus, if Dell winds up acquiring 3PAR it would have to then follow up with a string of risky, blockbuster acquisitions to really own the IT stack. And even Dell’s war chest would be seriously depleted after a long series of billion dollar acquisitions.
If this deal pushes upward of $2 billion, there would be a lot of pressure on Dell to prove that it can play in the IT stratosphere, which is questionable. Dell obviously had a lot of success with the EqualLogic acquisition, but instead of going right to the very high end with 3PAR (and thus going head-to-head with EMC), it seems like a stepping-stone approach might have made better sense (e.g., acquiring BlueArc or Compellent or Isilon or Xiotech, etc.)
Will other suitors jump in? Doubtful. The only possibilities are IBM, EMC, NetApp or Oracle, and of those only Oracle is rich enough and nuts enough (see “Who will Oracle acquire next?” ). If Oracle wants another storage product line, my money is on (and Larry’s money is in) Pillar Data.
If IBM or EMC made a move for 3PAR it would (a) be admitting that their existing high-end arrays aren’t up to snuff and (b) create too much confusion among customers and overlap in product lines. For $1.6 billion+, there are much better acquisitions for IBM or EMC to make.
NetApp could probably afford 3PAR, but does NetApp really want to get into another big-time bidding war? Been there, done that.
I think we’re in for a bidding war, but there will only be two players at the table.
Related blog post:
HP’s bid for 3PAR not its first
Recommended blog: Stephen Foskett’s “Everyone Loves 3Par: Here’s Why”
Will Dell counter? At first, I thought this was a done deal for HP. In an acquisition context, a 33% raise leads to an opponent folding. Then again, maybe this “I’ll see your $1.15 billion and raise you $450 million” is just these guys anteing up. This pot could get close to, or exceed, $2 billion.
Yes, I think Dell will counter, but I don’t think it would be wise. And the reason for that leads me to the next question.
Is 3PAR better for HP or Dell? I think it’s better for HP, but this is highly arguable.
HP has a solid high-end lineup with the HDS OEM deal, but I doubt that HP’s Dave Donatelli (formerly with EMC) is a reseller type of guy. 3PAR gives HP its own technology, and possibly a better weapon against EMC. The question would then be: What would HP do with the HDS line? And if HP follows Oracle’s suit on that, What becomes of HDS? (HP execs said that they would continue with the HDS partnership, business as usual.)
HP knows how to sell really high-end gear, which can’t be said about Dell. Plus, if Dell winds up acquiring 3PAR it would have to then follow up with a string of risky, blockbuster acquisitions to really own the IT stack. And even Dell’s war chest would be seriously depleted after a long series of billion dollar acquisitions.
If this deal pushes upward of $2 billion, there would be a lot of pressure on Dell to prove that it can play in the IT stratosphere, which is questionable. Dell obviously had a lot of success with the EqualLogic acquisition, but instead of going right to the very high end with 3PAR (and thus going head-to-head with EMC), it seems like a stepping-stone approach might have made better sense (e.g., acquiring BlueArc or Compellent or Isilon or Xiotech, etc.)
Will other suitors jump in? Doubtful. The only possibilities are IBM, EMC, NetApp or Oracle, and of those only Oracle is rich enough and nuts enough (see “Who will Oracle acquire next?” ). If Oracle wants another storage product line, my money is on (and Larry’s money is in) Pillar Data.
If IBM or EMC made a move for 3PAR it would (a) be admitting that their existing high-end arrays aren’t up to snuff and (b) create too much confusion among customers and overlap in product lines. For $1.6 billion+, there are much better acquisitions for IBM or EMC to make.
NetApp could probably afford 3PAR, but does NetApp really want to get into another big-time bidding war? Been there, done that.
I think we’re in for a bidding war, but there will only be two players at the table.
Related blog post:
HP’s bid for 3PAR not its first
Recommended blog: Stephen Foskett’s “Everyone Loves 3Par: Here’s Why”
Wednesday, August 11, 2010
Top 10 storage acquisitions of 2010
UPDATED August 16, 2010 – I originally posted this Top 10 acquisitions piece last week, with EMC's acquisition of Greenplum in the #1 spot. Today's announcement that Dell plans to acquire 3PAR for a whopping $1.15 billion clearly catapults that deal into the #1 position. As such, here's my revised list of the Top 10 storage acquisitions of 2010, in ascending order:
#10: EXAR – NETERION
This one probably wouldn’t have made the Top 10 list except for the fact that it’s Exar’s second storage-related acquisition in the last year, indicating that this relatively unknown vendor is up to something in the storage market.
The acquisition of Hifn last year put Exar in the storage optimization market with data deduplication, compression and encryption technology. Which put them into discussions that include Storwize (acquired by IBM, see below), Ocarina Networks (acquired by Dell, see below) and Permabit.
The acquisition of Neterion this year (reportedly for $10 million to $11 million) puts Exar in the 10GbE/FCoE adapter space, and might get them a place in conversations typically focused on vendors such as Emulex, QLogic, Brocade, Broadcom and Intel.
“We see a lot of synergy between Neterion’s virtual I/O technology and Hifn’s data compression, security [encryption] and data deduplication technologies,” said John Williams, vice president of Exar’s datacom and storage business.”
Interesting, but does an engineering-focused company have the marketing might to compete with the big boys? Well, Neterion OEMs include EMC, HP, IBM, Fujitsu and Hitachi, so the company at least knows how to play with the big boys.
See “Exar to acquire Neterion”
#9: SOLARWINDS – TEK-TOOLS
As with Exar, this one made the Top 10 list in large part due to the surprise factor: Few in the storage world had ever heard of SolarWinds, which specializes in network and applications management software.
Tek-Tools has for a long time specialized in storage resource management (SRM) tools, and SolarWinds plans to integrate Tek-Tools’ Profiler SRM suite into its Orion portfolio by the end of this year. Sounds like a good fit, but since when did any acquisition-driven integration project get completed on schedule?
SolarWinds paid $42 million for Tek-Tools. And if that seems steep, consider the fact that Tek-Tools partners and resellers include 3PAR, AdviStor, Agami, Bell Micro, Brocade, CA, Cambridge Computer, CDW, Dell, EMC, GlassHouse, the Harding Group, HP, IBM, Kisdata, LSI, the Microsoft Developer Network, MySQL AB, NetApp, Novell, PC Mall, Quantum, Red Hat, Siemens Business, Sun, Syncsort, Techmate, VMware and Xiotech.
See “SolarWinds acquires Tek-Tools for SRM”
#8: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing. PMC-Sierra acquired Adaptec for $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
The interesting thing about this acquisition is that it puts PMC-Sierra in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought on the semiconductor front.
See “PMC-Sierra to buy Adaptec’s channel storage business”
#7: NETAPP – BYCAST
The terms of this deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software.”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#6: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE – a market owned largely by Broadcom and Intel.
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s (at the time) loose footing. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines.”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), most notably with HP. This puts Emulex at the table with Intel and Broadcom (which it beat out for the HP business) and may strengthen its position vs. QLogic and Brocade. In addition to HP, Emulex has design wins with vendors such as Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#5: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody. And this one (along with #4, see below) confirmed that storage optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
That led some analysts to predict that Dell is pursuing a one-size-fits-all approach to data deduplication where Ocarina’s technology will be used across the storage spectrum. If true, that would be bad news for Dell dedupe partners Symantec, CommVault and maybe even EMC Data Domain. But I don’t think that’s Dell’s game plan, at least not for the foreseeable future.
I think Dell will initially leverage Ocarina’s technology in specific image-intensive, fixed-content applications, and only on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will continue to use Symantec, CommVault and Data Domain where those companies’ technologies make more sense, or where customers demand it.
Besides, the Ocarina technology could be used in conjunction with deduplication technology from vendors such as Symantec and CommVault.
And in a related Top 10 acquisition . . .
#4: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in the #1 spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
IBM didn’t lay out specific plans, and it already has some good data reduction technology, but it looks like Big Blue will apply the Storwize technology to its high-end XIV system, Scale-Out Network Attached Storage (SONAS) platform, System Storage Easy Tier, and maybe even its ProtecTIER deduplication products.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
Read the full story on InfoStor partner site Enterprise Storage Forum: “IBM to Buy Storwize for Real-Time Data Compression.” And check out Kevin Komiega’s blog post: “IBM to Acquire Storwize.”
#3: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor (because Vision Solutions isn’t exactly well-known in the storage community) and it also ranked high on dollars, being valued at $242 million. Those two factors earned it the #2 ranking, although IBM-Storwize and Dell-Ocarina may be more interesting and certainly got a lot more ink.
The $242 million amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, but the smart money was on vendors such as Dell and HP as potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#2: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list. And besides, what would a Top 10 Storage Acquisitions list be without an EMC entry?
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum will become the foundation of a new division within EMC’s Information Infrastructure business.
So it’s a nice fit with EMC’s private cloud initiatives, but it also roughens up the competition between EMC, Oracle, IBM and Sun. Do you have a feeling that there’s at least one more big – very big – acquisition on the way?
See “EMC acquires data warehousing vendor Greenplum.”
#1: DELL -- 3PAR
At approximately $1.15 billion, Dell's planned acquisition of 3PAR is in the same ballpark as EMC's acquisition of Data Domain last year, both of which qualify as game changers.
Dell has commenced a tender offer to acquire all outstanding shares of 3PAR stock for $18 a share, or about an 86% permium over 3PAR's closing price on Friday.
That hefty price tag suggests that there were other bidders for 3PAR. And if anyone doubted that Dell wants to be a real (as opposed to reseller) player in the storage space, the 3PAR acquisition should assuage those doubts.
This announcement will probably once again call into question Dell's reseller partnership with EMC, but I don't see why. The Dell-EMC marriage will run its course one way or the other, but the outcome won't have anything to do with the 3PAR deal.
However, when you look at all of Dell's storage acquisitions (3PAR, Ocarina, EqualLogic, Exanet, Scalent and probably more to come), Dell and EMC could be on an accelerated path to splitsville. (Reportedly, Dell says that there is only about a 20% overlap between the 3PAR and Dell/EMC product lines.)
Historically, the summer months have been ripe for storage acquisitions so, given the prevailing climate, fasten your seatbelts. I may have to update this Top 10 list within the next two weeks.
#10: EXAR – NETERION
This one probably wouldn’t have made the Top 10 list except for the fact that it’s Exar’s second storage-related acquisition in the last year, indicating that this relatively unknown vendor is up to something in the storage market.
The acquisition of Hifn last year put Exar in the storage optimization market with data deduplication, compression and encryption technology. Which put them into discussions that include Storwize (acquired by IBM, see below), Ocarina Networks (acquired by Dell, see below) and Permabit.
The acquisition of Neterion this year (reportedly for $10 million to $11 million) puts Exar in the 10GbE/FCoE adapter space, and might get them a place in conversations typically focused on vendors such as Emulex, QLogic, Brocade, Broadcom and Intel.
“We see a lot of synergy between Neterion’s virtual I/O technology and Hifn’s data compression, security [encryption] and data deduplication technologies,” said John Williams, vice president of Exar’s datacom and storage business.”
Interesting, but does an engineering-focused company have the marketing might to compete with the big boys? Well, Neterion OEMs include EMC, HP, IBM, Fujitsu and Hitachi, so the company at least knows how to play with the big boys.
See “Exar to acquire Neterion”
#9: SOLARWINDS – TEK-TOOLS
As with Exar, this one made the Top 10 list in large part due to the surprise factor: Few in the storage world had ever heard of SolarWinds, which specializes in network and applications management software.
Tek-Tools has for a long time specialized in storage resource management (SRM) tools, and SolarWinds plans to integrate Tek-Tools’ Profiler SRM suite into its Orion portfolio by the end of this year. Sounds like a good fit, but since when did any acquisition-driven integration project get completed on schedule?
SolarWinds paid $42 million for Tek-Tools. And if that seems steep, consider the fact that Tek-Tools partners and resellers include 3PAR, AdviStor, Agami, Bell Micro, Brocade, CA, Cambridge Computer, CDW, Dell, EMC, GlassHouse, the Harding Group, HP, IBM, Kisdata, LSI, the Microsoft Developer Network, MySQL AB, NetApp, Novell, PC Mall, Quantum, Red Hat, Siemens Business, Sun, Syncsort, Techmate, VMware and Xiotech.
See “SolarWinds acquires Tek-Tools for SRM”
#8: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing. PMC-Sierra acquired Adaptec for $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
The interesting thing about this acquisition is that it puts PMC-Sierra in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought on the semiconductor front.
See “PMC-Sierra to buy Adaptec’s channel storage business”
#7: NETAPP – BYCAST
The terms of this deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software.”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#6: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE – a market owned largely by Broadcom and Intel.
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s (at the time) loose footing. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines.”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), most notably with HP. This puts Emulex at the table with Intel and Broadcom (which it beat out for the HP business) and may strengthen its position vs. QLogic and Brocade. In addition to HP, Emulex has design wins with vendors such as Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#5: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody. And this one (along with #4, see below) confirmed that storage optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
That led some analysts to predict that Dell is pursuing a one-size-fits-all approach to data deduplication where Ocarina’s technology will be used across the storage spectrum. If true, that would be bad news for Dell dedupe partners Symantec, CommVault and maybe even EMC Data Domain. But I don’t think that’s Dell’s game plan, at least not for the foreseeable future.
I think Dell will initially leverage Ocarina’s technology in specific image-intensive, fixed-content applications, and only on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will continue to use Symantec, CommVault and Data Domain where those companies’ technologies make more sense, or where customers demand it.
Besides, the Ocarina technology could be used in conjunction with deduplication technology from vendors such as Symantec and CommVault.
And in a related Top 10 acquisition . . .
#4: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in the #1 spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
IBM didn’t lay out specific plans, and it already has some good data reduction technology, but it looks like Big Blue will apply the Storwize technology to its high-end XIV system, Scale-Out Network Attached Storage (SONAS) platform, System Storage Easy Tier, and maybe even its ProtecTIER deduplication products.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
Read the full story on InfoStor partner site Enterprise Storage Forum: “IBM to Buy Storwize for Real-Time Data Compression.” And check out Kevin Komiega’s blog post: “IBM to Acquire Storwize.”
#3: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor (because Vision Solutions isn’t exactly well-known in the storage community) and it also ranked high on dollars, being valued at $242 million. Those two factors earned it the #2 ranking, although IBM-Storwize and Dell-Ocarina may be more interesting and certainly got a lot more ink.
The $242 million amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, but the smart money was on vendors such as Dell and HP as potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#2: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list. And besides, what would a Top 10 Storage Acquisitions list be without an EMC entry?
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum will become the foundation of a new division within EMC’s Information Infrastructure business.
So it’s a nice fit with EMC’s private cloud initiatives, but it also roughens up the competition between EMC, Oracle, IBM and Sun. Do you have a feeling that there’s at least one more big – very big – acquisition on the way?
See “EMC acquires data warehousing vendor Greenplum.”
#1: DELL -- 3PAR
At approximately $1.15 billion, Dell's planned acquisition of 3PAR is in the same ballpark as EMC's acquisition of Data Domain last year, both of which qualify as game changers.
Dell has commenced a tender offer to acquire all outstanding shares of 3PAR stock for $18 a share, or about an 86% permium over 3PAR's closing price on Friday.
That hefty price tag suggests that there were other bidders for 3PAR. And if anyone doubted that Dell wants to be a real (as opposed to reseller) player in the storage space, the 3PAR acquisition should assuage those doubts.
This announcement will probably once again call into question Dell's reseller partnership with EMC, but I don't see why. The Dell-EMC marriage will run its course one way or the other, but the outcome won't have anything to do with the 3PAR deal.
However, when you look at all of Dell's storage acquisitions (3PAR, Ocarina, EqualLogic, Exanet, Scalent and probably more to come), Dell and EMC could be on an accelerated path to splitsville. (Reportedly, Dell says that there is only about a 20% overlap between the 3PAR and Dell/EMC product lines.)
Historically, the summer months have been ripe for storage acquisitions so, given the prevailing climate, fasten your seatbelts. I may have to update this Top 10 list within the next two weeks.
Monday, July 19, 2010
Dell to acquire Ocarina for data deduplication
July 19, 2010 – Dell dropped a bombshell on the data deduplication market today with the announcement that is has signed an agreement to buy Ocarina Networks. The amount of the deal was not disclosed (but I’m working on that). We’ll be following up on this announcement in the near future as we get more info, but for now:
Ocarina has content-aware storage optimization technology – data deduplication plus compression – that until recently it sold bundled in appliances. Less than a month ago, the company announced an embeddable version of its ECOsystem data reduction technology targeted at OEMs.
Since that announcement came amidst rumors that IBM was about to buy Storwize (an Ocarina competitor) for $140 million, the Ocarina announcement led to speculation about which vendors might adopt the technology, as well as which of Ocarina’s partners might acquire the company. (The IBM-Storwize rumor has, at least for now, fizzled out.)
In a blog on Ocarina’s announcement, I opined that HP might be interested in Ocarina (see “Ocarina: 4 dedupe predictions, and an OEM strategy,” a June 22 blog post). Along with EMC, Hitachi Data Systems, BlueArc and others, HP is one of Ocarina’s partners.
That level of perspicuity is why I don’t invest in storage vendors.
Until the announcement of the embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive storage.
In Dell’s press release on the acquisition announcement, Ocarina CEO Murli Thirumale was quoted as saying “This brings deduplication to not only primary storage, but also to key storage workflows including backup, replication, migration and tiering.”
However, the release also stated that “Ocarina brings a leading deduplication capability to complement Dell’s EqualLogic solutions.” And Brad Anderson, senior vice president in Dell’s Enterprise Product Group, also singled out the EqualLogic product line in a quote: “Ocarina provides an important component of our data management portfolio and our EqualLogic ecosystem . . . .”
So, the Ocarina technology will be applied only to the EqualLogic line of iSCSI arrays? Or will it be applied across the board; in other words, all of Dell’s storage systems? And if the latter is correct, what does that mean for Dell’s existing data deduplication technologies and partners?
Will Dell still need deduplication partners CommVault and Symantec?
What are the implications for Dell’s reseller deal with EMC for Data Domain deduplication systems?
Will Dell eventually have one deduplication technology, or will the company maintain a menu of options?
Where does this leave other data reduction specialists, such as GreenBytes, Exar and Permabit, which recently announced an embeddable version of its storage optimization technology (see “Permabit deduplicates primary storage”)?
And how will the deduplication kingpins – NetApp and EMC – react?
For now, more questions than answers.
Related blog posts:
“Ocarina: 4 dedupe predictions, and an OEM strategy” (June 22)
IBM to acquire Storwize for $140 million? (June 14)
And here's a blog post on the Dell-Ocarina acquisition from David West, CommVault's vice president of marketing and business development: http://news.commvault.com/DavidWest/000049_A_Complementary_Approach_to_Deduplication.asp
Ocarina has content-aware storage optimization technology – data deduplication plus compression – that until recently it sold bundled in appliances. Less than a month ago, the company announced an embeddable version of its ECOsystem data reduction technology targeted at OEMs.
Since that announcement came amidst rumors that IBM was about to buy Storwize (an Ocarina competitor) for $140 million, the Ocarina announcement led to speculation about which vendors might adopt the technology, as well as which of Ocarina’s partners might acquire the company. (The IBM-Storwize rumor has, at least for now, fizzled out.)
In a blog on Ocarina’s announcement, I opined that HP might be interested in Ocarina (see “Ocarina: 4 dedupe predictions, and an OEM strategy,” a June 22 blog post). Along with EMC, Hitachi Data Systems, BlueArc and others, HP is one of Ocarina’s partners.
That level of perspicuity is why I don’t invest in storage vendors.
Until the announcement of the embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive storage.
In Dell’s press release on the acquisition announcement, Ocarina CEO Murli Thirumale was quoted as saying “This brings deduplication to not only primary storage, but also to key storage workflows including backup, replication, migration and tiering.”
However, the release also stated that “Ocarina brings a leading deduplication capability to complement Dell’s EqualLogic solutions.” And Brad Anderson, senior vice president in Dell’s Enterprise Product Group, also singled out the EqualLogic product line in a quote: “Ocarina provides an important component of our data management portfolio and our EqualLogic ecosystem . . . .”
So, the Ocarina technology will be applied only to the EqualLogic line of iSCSI arrays? Or will it be applied across the board; in other words, all of Dell’s storage systems? And if the latter is correct, what does that mean for Dell’s existing data deduplication technologies and partners?
Will Dell still need deduplication partners CommVault and Symantec?
What are the implications for Dell’s reseller deal with EMC for Data Domain deduplication systems?
Will Dell eventually have one deduplication technology, or will the company maintain a menu of options?
Where does this leave other data reduction specialists, such as GreenBytes, Exar and Permabit, which recently announced an embeddable version of its storage optimization technology (see “Permabit deduplicates primary storage”)?
And how will the deduplication kingpins – NetApp and EMC – react?
For now, more questions than answers.
Related blog posts:
“Ocarina: 4 dedupe predictions, and an OEM strategy” (June 22)
IBM to acquire Storwize for $140 million? (June 14)
And here's a blog post on the Dell-Ocarina acquisition from David West, CommVault's vice president of marketing and business development: http://news.commvault.com/DavidWest/000049_A_Complementary_Approach_to_Deduplication.asp
Wednesday, June 9, 2010
Disk array SmackDown: NetApp vs. IBM, Dell vs. HP
June 9, 2010 – In the external disk array market, it’s surprising how little changes in terms of the top five vendors’ market shares quarter-to-quarter or even year-to-year. The leading vendors almost always occupy the same rungs on the ladder. However, based on IDC’s Q1 2010 stats, market shares appear to be shifting.
Of course, EMC held on to its #1 spot in the first quarter with a 24.6% market share on revenue of $1.22 billion. But the rest of the race is tightening.
For example, for the first time NetApp pulled into a virtual dead heat with IBM for the #2 spot in the external disk systems market. IBM had an 11.7% market share, while NetApp had an 11.1% share. Statistically, IDC considers that to be a tie. Compared to Q1 2009, IBM slipped 0.5% in terms of market share while NetApp gained 2.3 points, leapfrogging both Dell and HP, which were in the #3 and #4 spots in the previous quarter.
If NetApp’s ascendancy continues at this clip, the company could eclipse Big Blue. And if NetApp’s first quarter and year-end earnings are any indication (see “NetApp wows Wall Street, doubles quarterly profits”), I think they will.
Rounding out the top five, HP slipped a bit in the first quarter, to a 10.2% market share, followed closely by Dell with a 10.1% share. Dead heat. And I predict that Dell will overtake HP in the next quarter because the revenue differential between the two was only $6 million in the first quarter ($506 million vs. $500 million).
Hitachi Data Systems and Oracle/Sun failed to crack the top five.
NetApp also gained market share in the NAS arena over the last quarter with a 26.9% share (vs. 20.2% in the last quarter), coming in second to EMC’s 45.1% market share (down from a 50.5% chunk in the last quarter).
Overall, the NAS market grew a whopping 44.6% year-over-year.
Equally impressive, the iSCSI SAN market posted 45.7% revenue growth in Q1 2010 vs. Q1 2009. Dell led the iSCSI market with a 36.9% revenue share, followed by NetApp with a 14.4% slice.
For IDC’s press release and more stats, see “Disk Storage Systems Market Rebounds to Double-Digit Growth Across All Segments in First Quarter.”
Of course, EMC held on to its #1 spot in the first quarter with a 24.6% market share on revenue of $1.22 billion. But the rest of the race is tightening.
For example, for the first time NetApp pulled into a virtual dead heat with IBM for the #2 spot in the external disk systems market. IBM had an 11.7% market share, while NetApp had an 11.1% share. Statistically, IDC considers that to be a tie. Compared to Q1 2009, IBM slipped 0.5% in terms of market share while NetApp gained 2.3 points, leapfrogging both Dell and HP, which were in the #3 and #4 spots in the previous quarter.
If NetApp’s ascendancy continues at this clip, the company could eclipse Big Blue. And if NetApp’s first quarter and year-end earnings are any indication (see “NetApp wows Wall Street, doubles quarterly profits”), I think they will.
Rounding out the top five, HP slipped a bit in the first quarter, to a 10.2% market share, followed closely by Dell with a 10.1% share. Dead heat. And I predict that Dell will overtake HP in the next quarter because the revenue differential between the two was only $6 million in the first quarter ($506 million vs. $500 million).
Hitachi Data Systems and Oracle/Sun failed to crack the top five.
NetApp also gained market share in the NAS arena over the last quarter with a 26.9% share (vs. 20.2% in the last quarter), coming in second to EMC’s 45.1% market share (down from a 50.5% chunk in the last quarter).
Overall, the NAS market grew a whopping 44.6% year-over-year.
Equally impressive, the iSCSI SAN market posted 45.7% revenue growth in Q1 2010 vs. Q1 2009. Dell led the iSCSI market with a 36.9% revenue share, followed by NetApp with a 14.4% slice.
For IDC’s press release and more stats, see “Disk Storage Systems Market Rebounds to Double-Digit Growth Across All Segments in First Quarter.”
Thursday, March 11, 2010
Who are the top 5 array vendors?
March 11, 2010 – Market researcher IDC recently released its Worldwide Quarterly Disk Storage Systems Tracker report, which provides revenue statistics for the external and internal disk array markets, as well as vendors’ market shares.
Although it’s no surprise that 2009 wasn’t the best year for disk array vendors, the market did end the year on a high note. Fourth quarter revenues for the total (external and internal disk systems) market accounted for almost 30% of the full year’s revenues, and represented the first year-over-year growth since the third quarter of 2008, according to Liz Conner, IDC’s senior research analyst, storage systems.
Q4 revenues were $7.273 billion, up slightly from $7.26 billion in Q4 2008. Total revenues for 2009 were almost $24.5 billion, compared to $27.8 billion in 2008.
There were no surprises on the leader board. Racking up 2009 revenues of $4.1 billion in the external disk systems market alone, EMC earned its 800-pound-gorilla epithet by being #1 by a long shot. EMC grabbed a 22.7% market share, trailed by IBM (14.2%), HP (11.7%), Dell (9.1%) and NetApp (8.6%).
Looking at the total (external plus internal) disk systems market, the numbers slide toward server vendors HP and IBM. With $4.5 billion in revenues, HP earned the #1 spot with an 18.4% market share, followed by IBM (16.9%), EMC (16.8%), Dell (11.4%) and NetApp (6.4%).
Those rankings were pretty much expected, but what struck me as weird was that there was virtually no change in those vendor’s market shares between 2008 and 2009. In each case, there was less than a 1% difference, despite all the high-stakes battling in this high-margin market.
When you slice the disk systems market into segments, there were a few mild surprises.
For example, EMC led the NAS market with a 50.5% share, followed by NetApp with a 20.2% share. I had no idea the gap between the two was that large, but NetApp must be making up for it in other areas (see “NetApp hit$ a home run” ). The NAS market grew a respectable 12.6% year-over-year, and now accounts for about 20% of the entire external disk storage systems market.
But if EMC and NetApp are hogging more than 70% of the NAS market, that doesn’t leave many scraps for the hordes of other NAS vendors.
The iSCSI SAN array market posted a very impressive 30% revenue growth in Q4 vs. the same period a year ago. Dell led the iSCSI market with a 31.5% slice of the revenues (maybe EqualLogic was worth $1.4 billion), followed by EMC with a 15.7% cut. Again, a little surprising because I would have guessed NetApp was in the #2 position.
You may have noticed that Hitachi Data Systems does not show up in the top five anything in the IDC report. That’s because IDC does not include OEM sales in its tracking. As such, HDS sales revenues do not reflect their OEM sales to HP, nor to Sun -- a partnership that’s set to expire on March 31.
See Kevin Komiega’s new story, Oracle-Sun ends HDS partnership
and my blog post, Who wins/loses in the Oracle-HDS breakup?
And you can read the full IDC press release here.
Although it’s no surprise that 2009 wasn’t the best year for disk array vendors, the market did end the year on a high note. Fourth quarter revenues for the total (external and internal disk systems) market accounted for almost 30% of the full year’s revenues, and represented the first year-over-year growth since the third quarter of 2008, according to Liz Conner, IDC’s senior research analyst, storage systems.
Q4 revenues were $7.273 billion, up slightly from $7.26 billion in Q4 2008. Total revenues for 2009 were almost $24.5 billion, compared to $27.8 billion in 2008.
There were no surprises on the leader board. Racking up 2009 revenues of $4.1 billion in the external disk systems market alone, EMC earned its 800-pound-gorilla epithet by being #1 by a long shot. EMC grabbed a 22.7% market share, trailed by IBM (14.2%), HP (11.7%), Dell (9.1%) and NetApp (8.6%).
Looking at the total (external plus internal) disk systems market, the numbers slide toward server vendors HP and IBM. With $4.5 billion in revenues, HP earned the #1 spot with an 18.4% market share, followed by IBM (16.9%), EMC (16.8%), Dell (11.4%) and NetApp (6.4%).
Those rankings were pretty much expected, but what struck me as weird was that there was virtually no change in those vendor’s market shares between 2008 and 2009. In each case, there was less than a 1% difference, despite all the high-stakes battling in this high-margin market.
When you slice the disk systems market into segments, there were a few mild surprises.
For example, EMC led the NAS market with a 50.5% share, followed by NetApp with a 20.2% share. I had no idea the gap between the two was that large, but NetApp must be making up for it in other areas (see “NetApp hit$ a home run” ). The NAS market grew a respectable 12.6% year-over-year, and now accounts for about 20% of the entire external disk storage systems market.
But if EMC and NetApp are hogging more than 70% of the NAS market, that doesn’t leave many scraps for the hordes of other NAS vendors.
The iSCSI SAN array market posted a very impressive 30% revenue growth in Q4 vs. the same period a year ago. Dell led the iSCSI market with a 31.5% slice of the revenues (maybe EqualLogic was worth $1.4 billion), followed by EMC with a 15.7% cut. Again, a little surprising because I would have guessed NetApp was in the #2 position.
You may have noticed that Hitachi Data Systems does not show up in the top five anything in the IDC report. That’s because IDC does not include OEM sales in its tracking. As such, HDS sales revenues do not reflect their OEM sales to HP, nor to Sun -- a partnership that’s set to expire on March 31.
See Kevin Komiega’s new story, Oracle-Sun ends HDS partnership
and my blog post, Who wins/loses in the Oracle-HDS breakup?
And you can read the full IDC press release here.
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