March 9, 2011 – Following Monday’s announcement of Western Digital’s plan to acquire Hitachi GST for $4.3 billion, consolidation in the storage industry continued today with NetApp’s surprise announcement that it will buy LSI’s Engenio business for $480 million in cash – the largest transaction in NetApp’s history. The deal is expected to close within 60 days.
NetApp officials expect the acquisition to add $750 million to its revenue stream in fiscal 2012, and to add $5 billion to its total addressable market (TAM) by 2014.
LSI’s Engenio division had revenues of $705 million in 2010. (LSI’s entire storage portfolio generated revenues of $954 million in 2010.)
The new unit will be run by Manish Goel, executive vice president of NetApp’s product operations.
It’s important to note that NetApp is buying only the Engenio product line (external disk arrays), not LSI’s other storage lines (e.g., the ONStor and MegaRAID and 3ware controller/adapter families).
In acquisitions such as this, it’s customary to examine product overlap between the two companies’ product lines. However, NetApp officials didn’t really address that during their conference call. Instead, they focused on new workloads (vertical markets) that the company can penetrate better with Engenio’s technology than with NetApp's FAS technology. NetApp officials cited video (including full-motion and surveillance) and high performance computing (HPC), as well as multimedia, oil and gas, semiconductor simulation, weather simulation, medical imaging, and content distribution.
In addition to those new fast-growth verticals, NetApp officials noted that the Engenio acquisition will significantly expand NetApp’s channel strategy.
Fine, but the interesting question is what will happen to Engenio’s OEMs partnerships. Engenio’s OEMs include IBM (Engenio’s largest customer, and already a NetApp partner), Oracle/Sun, Dell, SGI and Teradata.
In today’s conference call, NetApp CEO Tom Georgens (who was formerly with Engenio) subtly danced around this issue, and downplayed the OEM side of the deal. Here are some clips from Georgens:
“Clearly, we have to have dialogue [with Engenio’s OEMs ]. . . Our objective is not to undermine the OEM business; our objective is work hand-in-hand with them . . . [but] if things change and a relationship becomes less friendly, I think we have the tools to compete that the previous owner of this business did not.”
More clips: “We expect [the OEM business] to roll off a bit. It’s certainly not going to be a growth element. The growth will come from the new business . . . and expanded TAM . . . At the price we’re paying . . . and the potential return, I think we would have justified this transaction with no OEM business.”
And in response to a question about whether NetApp would be able to keep all of Engenio’s OEMs: “I think that we’ll keep a number of them, or a large portion of the OEMs, but I don’t think we’ll keep every dollar of OEM revenue . . . I’m not saying that OEMs don’t matter, but the growth is elsewhere [in the new vertical markets].”
I’d guess that the OEM relationships with Oracle/Sun and Dell will be on shaky ground, but if the storage opportunities in areas such as video and HPC grow as rapidly as expected, and NetApp can gain significant market share in those verticals with the Engenio technology, then the OEM side of this equation may not matter.
As for LSI: The company’s press release said that “The strategic decision to divest the external storage systems business was based on the company’s expectation that long-term shareholder value can be maximized by becoming a pure-play semiconductor company.” In conjunction with the acquisition announcement, LSI said that its board of directors has authorized a new stock repurchase program of up to $750 million.
Showing posts with label NetApp. Show all posts
Showing posts with label NetApp. Show all posts
Wednesday, March 9, 2011
Monday, March 7, 2011
EMC lengthens its lead in disk array fray
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.”
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.”
Friday, March 4, 2011
What are your post-lease options?
March 4, 2011 – When your lease or warranty runs out (or even when you’re on lease or warranty), you have a number of options. You can undergo a total technology refresh and buy new systems from your primary storage supplier – an expensive option, and it’s likely that you don’t really need the latest and greatest gear. Or, you can re-up and sign an extended service-and-support agreement with your primary vendor – another expensive option.
Alternatively, you can contract with a third party that provides support for all kinds of IT hardware. But let’s say you’re a NetApp shop: What level of expertise does a general-purpose third party really have on NetApp systems?
A third alternative is to sign a services-and-support contract with a third party that specializes specifically in the type of hardware you have. In the case of NetApp systems, a good example is Zerowait.
I recently chatted with Mike Linett, Zerowait’s president and CEO, and Rob Robinson, the company’s vice president of sales.
Zerowait specializes in service and support of NetApp equipment – and only NetApp. Prior to 2002, Zerowait was a NetApp reseller, but when NetApp nixed that deal Zerowait moved into the service and support business, competing with NetApp.
Linett claims that Zerowait typically charges about half of what NetApp charges for service and support. But according to one of Zerowait’s customers, the savings could actually be much higher.
“Zerowait is 50% to 90% less expensive than NetApp, depending how old your hardware is,” says Balazs Nagy, manager and chief architect at NewPush, an application and data warehousing hosting company. “The older the equipment, the more prohibitive NetApp makes it for service and support, and if the equipment is very old NetApp won’t even support it.”
NewPush has a services and support agreement with Zerowait that covers four NetApp systems.
Besides the basic support you would expect from a third party, what can a company such as Zerowait provide?
“Zerowait allows us to have spare parts onsite at a very low cost,” says Nagy, “but they also provide much more in-depth phone support than NetApp does, as well as remote or onsite engineering, architecting and education services.”
In a time of tight IT budgets, Zerowait seems to have a good business model. The company grew 45% last year, according to Linett. And Zerowait is expanding worldwide (Europe in 2008 and Australia near the end of last year).
“The typical lease is three years, but these days a lot of people want to extend that to five or six years before they do a refresh,” says Zerowait’s Robinson.
In addition to third-party support services, Zerowait also offers off-lease transferable license systems. More recently, the company began selling its SimplStor system for secondary storage. SimplStor is based on commodity hardware (SuperMicro chassis and drives from Seagate or Hitachi) and open-source operating systems.
NewPush, for example, recently began offering private remotely-managed storage services based on Zerowait’s SimplStor. The service, which starts at $75 per TB per month, is positioned as an alternative to public cloud storage services.
Alternatively, you can contract with a third party that provides support for all kinds of IT hardware. But let’s say you’re a NetApp shop: What level of expertise does a general-purpose third party really have on NetApp systems?
A third alternative is to sign a services-and-support contract with a third party that specializes specifically in the type of hardware you have. In the case of NetApp systems, a good example is Zerowait.
I recently chatted with Mike Linett, Zerowait’s president and CEO, and Rob Robinson, the company’s vice president of sales.
Zerowait specializes in service and support of NetApp equipment – and only NetApp. Prior to 2002, Zerowait was a NetApp reseller, but when NetApp nixed that deal Zerowait moved into the service and support business, competing with NetApp.
Linett claims that Zerowait typically charges about half of what NetApp charges for service and support. But according to one of Zerowait’s customers, the savings could actually be much higher.
“Zerowait is 50% to 90% less expensive than NetApp, depending how old your hardware is,” says Balazs Nagy, manager and chief architect at NewPush, an application and data warehousing hosting company. “The older the equipment, the more prohibitive NetApp makes it for service and support, and if the equipment is very old NetApp won’t even support it.”
NewPush has a services and support agreement with Zerowait that covers four NetApp systems.
Besides the basic support you would expect from a third party, what can a company such as Zerowait provide?
“Zerowait allows us to have spare parts onsite at a very low cost,” says Nagy, “but they also provide much more in-depth phone support than NetApp does, as well as remote or onsite engineering, architecting and education services.”
In a time of tight IT budgets, Zerowait seems to have a good business model. The company grew 45% last year, according to Linett. And Zerowait is expanding worldwide (Europe in 2008 and Australia near the end of last year).
“The typical lease is three years, but these days a lot of people want to extend that to five or six years before they do a refresh,” says Zerowait’s Robinson.
In addition to third-party support services, Zerowait also offers off-lease transferable license systems. More recently, the company began selling its SimplStor system for secondary storage. SimplStor is based on commodity hardware (SuperMicro chassis and drives from Seagate or Hitachi) and open-source operating systems.
NewPush, for example, recently began offering private remotely-managed storage services based on Zerowait’s SimplStor. The service, which starts at $75 per TB per month, is positioned as an alternative to public cloud storage services.
Wednesday, February 16, 2011
NetApp profits up, shares down
February 16, 2011 -- NetApp reported results for its fiscal 2011 third quarter on Wednesday. Revenue and earnings numbers were impressive, but guidance was apparently viewed as weak because investors sent NetApp’s stock price south.
NetApp raked in revenues of $1.27 billion in the third quarter. That compares to slightly more than $1 billion in the same period a year ago – a 25% growth rate.
Revenues for the first nine months of the fiscal year were $3.61 billion. And NetApp officials estimated revenue for the upcoming fourth quarter of approximately $1.38 billion. That means that the company has a good chance of topping the $5 billion mark for the full fiscal year.
Net income in 3Q2011 was $172 million, or $0.42 per share, compared to net income of $108 billion, or $0.30 a share, in 3Q2010.
Hardware (or what NetApp calls “product”) revenue was $818.6, up 32% year-over-year and +5% over the previous quarter. Software (“software entitlement and maintenance”) revenue was $183.8 million, which is a gain of 8% y-o-y and 3% sequentially. Revenue from services was $265.7 million, up 20% over the same quarter a year ago, and +6.5% sequentially.
I’m not a savvy investor, but those numbers look pretty good to me. Nevertheless, at one point after the report NetApp (NASDAQ: NTAP) shares were down about 6%. I’d guess that they’ll recover fairly rapidly.
During its third quarter, NetApp made the biggest product launch in company history (see “NetApp overhauls product line, from arrays to OS” ).
More recently, the company bought Akorri (see “NetApp to acquire Akorri Networks” ), and plans to roll Akorri’s BalancePoint management suite into the NetApp OnCommand management suite.
Related article: “EMC announces 41 new products”
NetApp raked in revenues of $1.27 billion in the third quarter. That compares to slightly more than $1 billion in the same period a year ago – a 25% growth rate.
Revenues for the first nine months of the fiscal year were $3.61 billion. And NetApp officials estimated revenue for the upcoming fourth quarter of approximately $1.38 billion. That means that the company has a good chance of topping the $5 billion mark for the full fiscal year.
Net income in 3Q2011 was $172 million, or $0.42 per share, compared to net income of $108 billion, or $0.30 a share, in 3Q2010.
Hardware (or what NetApp calls “product”) revenue was $818.6, up 32% year-over-year and +5% over the previous quarter. Software (“software entitlement and maintenance”) revenue was $183.8 million, which is a gain of 8% y-o-y and 3% sequentially. Revenue from services was $265.7 million, up 20% over the same quarter a year ago, and +6.5% sequentially.
I’m not a savvy investor, but those numbers look pretty good to me. Nevertheless, at one point after the report NetApp (NASDAQ: NTAP) shares were down about 6%. I’d guess that they’ll recover fairly rapidly.
During its third quarter, NetApp made the biggest product launch in company history (see “NetApp overhauls product line, from arrays to OS” ).
More recently, the company bought Akorri (see “NetApp to acquire Akorri Networks” ), and plans to roll Akorri’s BalancePoint management suite into the NetApp OnCommand management suite.
Related article: “EMC announces 41 new products”
Tuesday, January 25, 2011
EMC sets revenue records, again
January 25, 2011 – I couldn’t find an iota of bad news in EMC’s Q4 and year-end financial report today, so I turned to the financial analyst community. They couldn’t find anything negative either, although a few of them noted that, going forward, EMC may face more hurdles than it’s used to facing.
While generally praising EMC’s report, Technology Business Research (TBR) analyst Greg Richardson noted that “TBR expects EMC to face headwinds from multiple forces as it attempts to expand in the midmarket. Although the company posted 22% year-to-year growth in mid-tier revenue in 4Q10, we believe EMC will be forced to adjust its services model in order to win in the channel against NetApp, which leaves whitespace for channel partners to utilize their own services when deploying and supporting NetApp products.”
Richardson also noted that “Additionally, EMC will face a hurdle in the form of public cloud adoption. As customers become increasingly more comfortable and trusting of the cloud’s security, TBR expects adoption of public cloud to increase, particularly in the price-sensitive low end of the midmarket.”
And Stifel Nicolaus analyst Aaron Rakers noted that, going forward, EMC could face increasing competition at the high end (Symmetrix) of the market, particularly from Hitachi (Virtual Storage Platform), IBM (refreshed DS8000) and from 3PAR now that HP owns that company.
Other than those potential future challenges, everything’s coming up roses for EMC.
The company set records across the board in Q410 and for the full year. Fourth quarter revenue was $4.9 billion, up 19% over Q409. GAAP net income increased 61% year-over-year to $628.6 million. GAAP diluted earnings per share were up 53%. EMC closed the quarter with $9.5 billion in cash and investments.
For the full year (2010), EMC’s revenue was $17 billion, an increase of 21% over 2009 revenue. GAAP net income increased a whopping 75% to $1.9 billion, and diluted earnings per share were up 66%.
EMC executives expect 2011 revenue to be in the $19.6 billion range.
Diving a little deeper into EMC’s fourth quarter numbers: Symmetrix revenue increased 19% vs. Q4 2009, and revenue from the company’s mid-tier lineup (Clariion, Celerra, Centera, Data Domain, etc.) was up 23%. Revenue from majority-owned VMware was up 38%.
Looking ahead, I’m sure EMC will get a nice boost when the Isilon product line ramps, and I also expect very positive results from the recently introduced VNX/VNXe unified storage product line. And with the large amount of cash on hand, expect EMC to make some more acquisitions this year, most likely in the cloud and virtualization spaces.
Related article:
EMC announces 41 new products
While generally praising EMC’s report, Technology Business Research (TBR) analyst Greg Richardson noted that “TBR expects EMC to face headwinds from multiple forces as it attempts to expand in the midmarket. Although the company posted 22% year-to-year growth in mid-tier revenue in 4Q10, we believe EMC will be forced to adjust its services model in order to win in the channel against NetApp, which leaves whitespace for channel partners to utilize their own services when deploying and supporting NetApp products.”
Richardson also noted that “Additionally, EMC will face a hurdle in the form of public cloud adoption. As customers become increasingly more comfortable and trusting of the cloud’s security, TBR expects adoption of public cloud to increase, particularly in the price-sensitive low end of the midmarket.”
And Stifel Nicolaus analyst Aaron Rakers noted that, going forward, EMC could face increasing competition at the high end (Symmetrix) of the market, particularly from Hitachi (Virtual Storage Platform), IBM (refreshed DS8000) and from 3PAR now that HP owns that company.
Other than those potential future challenges, everything’s coming up roses for EMC.
The company set records across the board in Q410 and for the full year. Fourth quarter revenue was $4.9 billion, up 19% over Q409. GAAP net income increased 61% year-over-year to $628.6 million. GAAP diluted earnings per share were up 53%. EMC closed the quarter with $9.5 billion in cash and investments.
For the full year (2010), EMC’s revenue was $17 billion, an increase of 21% over 2009 revenue. GAAP net income increased a whopping 75% to $1.9 billion, and diluted earnings per share were up 66%.
EMC executives expect 2011 revenue to be in the $19.6 billion range.
Diving a little deeper into EMC’s fourth quarter numbers: Symmetrix revenue increased 19% vs. Q4 2009, and revenue from the company’s mid-tier lineup (Clariion, Celerra, Centera, Data Domain, etc.) was up 23%. Revenue from majority-owned VMware was up 38%.
Looking ahead, I’m sure EMC will get a nice boost when the Isilon product line ramps, and I also expect very positive results from the recently introduced VNX/VNXe unified storage product line. And with the large amount of cash on hand, expect EMC to make some more acquisitions this year, most likely in the cloud and virtualization spaces.
Related article:
EMC announces 41 new products
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)
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, November 17, 2010
NetApp revenue up 33%, earnings up 72%
November 17, 2010 – Over the past few weeks, analysts have opined that acquisitions such as EMC-Isilon ($2.25 billion) and HP-3PAR ($2.4 billion) spell bad news for NetApp. Maybe, but for now the NetApp juggernaut appears to be more than solid.
The company reported financial results today for its fiscal second quarter, highlighted by quarterly revenues of $1.207 billion. That’s up 33% over the same quarter a year ago. Similarly, NetApp’s revenue for the first six months of this quarter is up 34% vs. the previous year.
Net income was $165 million, or $0.42 per share, which compares to net income of $96 million, or $0.27 a share, a year ago. That’s a 72% increase year-over-year.
And gross margin was a whopping 66.9%, while operating margin was 19.8%.
The brightest spot was the company’s hardware revenues (which NetApp refers to as “product” revenue).
“NetApp produced 49% year over year growth in product revenue and our highest non-GAAP operating margin in over a decade,” said Tom Georgens, NetApp’s president and CEO. Product revenue in the second quarter was $780 million. And none of that came from the products NetApp announced a couple weeks ago as part of a wide-ranging refresh (see “NetApp overhauls product line, from arrays to OS”).
Other product lines were not so impressive. For example, software revenue was $177.9 million, up 5% year over year, and services revenue was $249.5 million, up 16% year over year.
What may raise some eyebrows is that NetApp is sitting on net cash of more than $3 billion, which will surely spark speculation on possible acquisitions that NetApp might make given the current climate of red hot M&A activity in the storage space.
Company officials predict third quarter revenue in the $1.24 billion to $1.29 billion range, which would translate into sequential growth in the 3% to 7% range.
NetApp [NASDAQ: NTAP] shares closed at $49.25 today, down 6.5%. The company’s 52-week trading range is $28.92 to $57.96.
Trading on the company’s stock was halted this afternoon due to a leak of the earnings report prior to NetApp’s official conference. Shares plunged, apparently because investors were not pleased with the Q3 earnings estimates.
Related blog post: “NetApp hits a home run in Q1”
Related article: "NetApp overhauls product line, from arrays to OS"
Also today, scale-out NAS specialist (and NetApp competitor) BlueArc reported record third quarter revenues and a 100% quarter-over-quarter growth in channel revenues. More details were not available in time for this post. (BlueArc is a private company.)
The company reported financial results today for its fiscal second quarter, highlighted by quarterly revenues of $1.207 billion. That’s up 33% over the same quarter a year ago. Similarly, NetApp’s revenue for the first six months of this quarter is up 34% vs. the previous year.
Net income was $165 million, or $0.42 per share, which compares to net income of $96 million, or $0.27 a share, a year ago. That’s a 72% increase year-over-year.
And gross margin was a whopping 66.9%, while operating margin was 19.8%.
The brightest spot was the company’s hardware revenues (which NetApp refers to as “product” revenue).
“NetApp produced 49% year over year growth in product revenue and our highest non-GAAP operating margin in over a decade,” said Tom Georgens, NetApp’s president and CEO. Product revenue in the second quarter was $780 million. And none of that came from the products NetApp announced a couple weeks ago as part of a wide-ranging refresh (see “NetApp overhauls product line, from arrays to OS”).
Other product lines were not so impressive. For example, software revenue was $177.9 million, up 5% year over year, and services revenue was $249.5 million, up 16% year over year.
What may raise some eyebrows is that NetApp is sitting on net cash of more than $3 billion, which will surely spark speculation on possible acquisitions that NetApp might make given the current climate of red hot M&A activity in the storage space.
Company officials predict third quarter revenue in the $1.24 billion to $1.29 billion range, which would translate into sequential growth in the 3% to 7% range.
NetApp [NASDAQ: NTAP] shares closed at $49.25 today, down 6.5%. The company’s 52-week trading range is $28.92 to $57.96.
Trading on the company’s stock was halted this afternoon due to a leak of the earnings report prior to NetApp’s official conference. Shares plunged, apparently because investors were not pleased with the Q3 earnings estimates.
Related blog post: “NetApp hits a home run in Q1”
Related article: "NetApp overhauls product line, from arrays to OS"
Also today, scale-out NAS specialist (and NetApp competitor) BlueArc reported record third quarter revenues and a 100% quarter-over-quarter growth in channel revenues. More details were not available in time for this post. (BlueArc is a private company.)
Monday, November 15, 2010
EMC’s $2.25 billion bid for Isilon exceeds expectations
November 15, 2010 – I was wrong. When I blogged about EMC possibly acquiring Isilon late last week, I guessed that EMC would indeed buy the scale-out NAS vendor but at a price considerably less than the rumored $2 billion. In fact, EMC’s bid came in at $2.25 billion today – which is surprisingly close to HP’s $2.4 billion buyout of 3PAR.
Some observers have speculated that the $2.25 billion suggests that there were other suitors involved. I don’t think so. I think EMC wanted to seal the deal without a bidding war, and $2.25 billion should do the trick.
EMC’s positioning of the deal was interesting. Predictably, the words “big data” and “cloud” came up a lot in EMC officials’ explanation of the deal, but so did the synergies between Isilon’s platforms and EMC’s Atmos platform.
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 went on to 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, which EMC acquired earlier this year.
In short, all of these acquisitions are complementary, not internally competitive. Nice positioning, and in fact it’s true. It’s rare that a vendor can make acquisitions of these sizes without having to shake up its existing product lineup (which is what HP will have to do as it folds 3PAR’s systems into HP’s venerable disk array lineup).
Not surprisingly, the EMC-Isilon announcement sparked more acquisition rumors, but now vendors that play in Isilon’s ballpark are getting some attention, including BlueArc (to be acquired by long-time partner Hitachi Data Systems?) and Panasas, which is moving into more commercial markets (see “Panasas Pushes Scale-Out Storage Performance Envelope” on Enterprise Storage Forum).
If $2.25 billion seems like a high price to pay for a barely profitable Isilon, consider the fact that IDC predicts that the market for scale-out NAS will grow on average 36% per year, reaching $6 billion by 2014.
Related articles:
EMC snaps up Isilon for $2.25 billion (Enterprise Storage Forum)
Isilon revenue up 77% (InfoStor blog post)
NetApp overhauls product line, from arrays to OS (InfoStor news story)
Some observers have speculated that the $2.25 billion suggests that there were other suitors involved. I don’t think so. I think EMC wanted to seal the deal without a bidding war, and $2.25 billion should do the trick.
EMC’s positioning of the deal was interesting. Predictably, the words “big data” and “cloud” came up a lot in EMC officials’ explanation of the deal, but so did the synergies between Isilon’s platforms and EMC’s Atmos platform.
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 went on to 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, which EMC acquired earlier this year.
In short, all of these acquisitions are complementary, not internally competitive. Nice positioning, and in fact it’s true. It’s rare that a vendor can make acquisitions of these sizes without having to shake up its existing product lineup (which is what HP will have to do as it folds 3PAR’s systems into HP’s venerable disk array lineup).
Not surprisingly, the EMC-Isilon announcement sparked more acquisition rumors, but now vendors that play in Isilon’s ballpark are getting some attention, including BlueArc (to be acquired by long-time partner Hitachi Data Systems?) and Panasas, which is moving into more commercial markets (see “Panasas Pushes Scale-Out Storage Performance Envelope” on Enterprise Storage Forum).
If $2.25 billion seems like a high price to pay for a barely profitable Isilon, consider the fact that IDC predicts that the market for scale-out NAS will grow on average 36% per year, reaching $6 billion by 2014.
Related articles:
EMC snaps up Isilon for $2.25 billion (Enterprise Storage Forum)
Isilon revenue up 77% (InfoStor blog post)
NetApp overhauls product line, from arrays to OS (InfoStor news story)
Monday, October 4, 2010
Who will be acquired next? And the Top 10 are . . .
UPDATED October 21, 2010 -- Following HP's $2.4 billion acquisition of 3PAR, speculation continues to run rampant over which storage vendors will be acquired next. Whether it's a good thing or a bad thing from the perspective of end users, further contraction in the industry is inevitable as the largest IT vendors attempt to control the entire IT stack and the pure-play storage vendors plug the gaps in their product lines in order to goose revenue growth.
For the following list of the Top 10 storage acquisition candidates, I factored in the opinions of InfoStor.com readers, which I received after posting "The Top 10 storage acquisitions of 2010." Interestingly, the majority of the reader responses came from channel professionals -- VARs and integrators -- leading me to believe that channel pros are much more interested in mergers and acquisitions than are end users. I also factored in opinions from industry and financial analysts. And topped it off with my own misguided opinions.
(Note: The ticker symbol links below take you to that company's entry page on the InfoStor Market Index, which provides up-to-the-minute info on the company's stock as well as company- and competitor-related news.)
#1 -- Isilon
I don't understand why CommVault's (NSDQ: CLVT) stock jumped so high during the HP-Dell-3PAR bidding war, but it did. I guess it was because CommVault has been an acquisition speculation darling for years.
CommVault has done a great job stealing revenue from the big four vendors in the data protection space, in part because CommVault's underlying architecture is newer and designed better for rapid enhancements, as evidenced in the recent release of its Simpana 9 software (see "CommVault unveils Simpana 9").
Conventional wisdom on Wall Street has Dell (NSDQ: DELL) as the most likely suitor under the assumption that none of the leading backup/recovery vendors (EMC, Symantec, IBM, CA) would be interested in CommVault, but I'm not so sure about that. Any of those vendors would have to eat some crow if they acquired CommVault, but they might be better positioned for the long haul.
Another possible CommVault suitor: NetApp which, by the way, is the #4 storage software vendor -- ahead of CA and HP (see "The Top 6 storage software vendors").
In addition to the fact that many financial analysts put the company at the top of their storage acquisition target lists, CommVault earns the #2 spot on this list because I think the storage M&A focus is going to shift from hardware to software. And with CommVault, it's hard to argue with low debt, high growth and high margins.
#3, #4 -- Compellent, Xiotech
Isilon, Compellent and Xiotech have all been cited often as potential Dell acquisitions post-3PAR/HP. I doubt it, because Isilon/Compellent/Xiotech are gap pluggers rather than the game changer that 3PAR would have been for Dell. Isilon, Compellent or Xiotech don't give Dell the high-end array technology that would enable Dell to go up against EMC/IBM/Hitachi, although they would be good complements to Dell's EqualLogic line. On the other hand, any one of these disk array vendors would help Dell doff its "Dude, you're getting a Dell" image.
Given their technology differentiators, and the difficulty of being a relatively small player in the contracting disk array market, it's likely that one or both of these vendors will be acquired by someone.
Xiotech, which is not publicly traded and has a nice differentiator with its Intelligent Storage Element (ISE) technology, would be the least expensive buy in this category.
The question with Compellent is whether the company has enough differentiation from what the potential acquirers already have in their portfolios.
#5 -- Permabit
Earlier this year, Permabit introduced an "OEM embeddable" version of its data deduplication software. dubbed Albierio. The company seems to be off to a good start with its OEM strategy, having already racked up reseller deals with BlueArc and Xiotech (see "Data deduplication: Permabit finds success with OEM model").
As the last standing "independent" data deduplication player, Permabit could thrive with its OEM model, but in light of the IBM-Storwize and Dell-Ocarina acquisitions in the data reduction space I think Permabit is an attractive acquisition candidate. The company's focus now is on deduplication for primary storage, but there's no reason Permabit's technology couldn't be used across all storage tiers -- and that could be very attractive for some of the larger storage vendors that have a diverse mix of data reduction solutions in their portfolios. Of course, that assumes that a "one size fits all" approach to data reduction is the way the larger vendors want to go in this space.
#6 - Brocade
IBM has been mentioned most frequently as a potential suitor for Brocade. That might have changed recently with Big Blue's announcement that it plans to acquire Blade Network Technologies (BNT), making it less likely that IBM would go for Brocade.
BNT specializes in blade and rack Ethernet switches, so it's not an overlap with Brocade's business, but the IBM-BNT acquisition will still dampen speculation that IBM will scoop up Brocade. More likely, perhaps, IBM will go after Juniper Networks. (Both Brocade and Juniper are IBM partners and, making it even more interesting, Juniper is a BNT partner.)
If we take IBM out of the Brocade acquirer lineup, that would leave Dell as the most likely acquirer (although Dell is also tight with Juniper). But that goes to the heart of the question of whether Dell will, post-3PAR, try for another disk array vendor (Isilon, Compellent, Xiotech?), software vendor (CommVault?) or surprise everyone and light out into LAN/SANland via Brocade.
Making a Dell acquisition shift toward networking more likely, Dell recently hired a former Cisco exec -- Dario Zamarian -- to run its networking business. Assuming Dell turns to networking in its acquisition spree, it's a 50/50 bet between Brocade and Juniper, according to some Wall Street wags.
In an article posted on MarketWatch (see "Brocade targeted by M&A rumor mill"), Wedbush analyst Kaushik Roy was quoted as saying, "It makes a lot more sense for Dell to buy Brocade than IBM. With Dell, it's a no-brainer. If Dell has half of a brain, they should be taking Brocade out right now."
Then again, if Dell goes after Brocade (NSDQ: BRCD), they could wind up in another crazy bidding war with, say, IBM or Oracle. And Dell's been there, done that.
In addition to IBM and Dell, analysts have cited Oracle and Hitachi as possible acquirers.
#7 -- BlueArc
Hitachi Data Systems (HDS) has been mentioned as a potential suitor for BlueArc, but it doesn't seem to be in HDS' genes to take the acquisitions route. But HDS and BlueArc do have a tight relationship and BlueArc has some attractive technology differentiators.
# 8 -- FalconStor
Only one of our readers mentioned FalconStor as an acquisition target, and it was in the context of the company potentially being acquired by HDS or NEC, but FalconStor would be relatively inexpensive and the company has great technology (although not everybody knows it because FalconStor's software is often sold "under the covers" by its OEMs and resellers).
In addition to getting storage management and data protection software (VTL, CDP, data deduplication, replication, etc.) across a variety of product lines, an acquirer could put the hurt on a lot of competitors because, although a relatively small company, FalconStor's tentacles reach across a lot of vendors via its reseller deals.
The possibility of FalconStor (NSDQ: FALC) being acquired heightened recently with the resignation of ReiJane Huai, the company's CEO. In the wake of the resignation, FalconStor tapped Jim McNiel as interim CEO and president. Some analysts think that McNiel may be more open to acquisition than was Huai.
#9 -- Symantec
The latest rumors regarding Symantec centered on Microsoft as a potential acquirer (see "Is Microsoft Looking to Buy Symantec?" on InfoStor sister site eSecurity Planet).
However, that (unlikely) move would be more for Symantec's security product line, rather than its storage software, and would be in response to Intel's acquisition of McAfee.
Given the breadth of Symantec's product line, and the fact that the company would be expensive and is not a pure-play storage vendor, I put Symantec low on this list. I don't see Symantec being bought any time soon, if only because of the company's huge market cap.
#10 -- NetApp
Rumors about NetApp (NSDQ: NTAP) being acquired have existed as long as the rumors surrounding CommVault and Brocade have, maybe longer. I think the time to buy NetApp is long gone, but due to the persistence of the rumors the company still makes our Top 10 list.
I see NetApp more as an acquirer than a target. The problem with that (for NetApp) is that, if the IT market does contract down to five or six soup-to-nuts vendors, NetApp doesn't have a chance of making that list even if it does dip into its deep piggy bank to make some acquisitions. It's that logic that keeps NetApp on our Top 10 acquisition targets list.
One other company that occasionally comes up in acquisition conversations is Quantum. This would be for the company's data deduplication technology and products. However, an acquirer would also get Quantum's tape business, and I don't think any of the likely acquiring vendors is looking to add tape to their portfolio.
And in the Least-Likely-But-Often-Mentioned category of acquisition targets: EMC. The Wall Street Journal reported last week that Oracle may be eying EMC (see "EMC Shares Rise On Oracle Buyout Rumor"). Sure, that would fill in the Tier-1 storage hole in Oracle's portfolio and, more importantly, give them VMware, but I still think the Oracle-EMC acquisition speculation is ludicrous.
Related blog post:
The Top 10 storage acquisitions of 2010
For the following list of the Top 10 storage acquisition candidates, I factored in the opinions of InfoStor.com readers, which I received after posting "The Top 10 storage acquisitions of 2010." Interestingly, the majority of the reader responses came from channel professionals -- VARs and integrators -- leading me to believe that channel pros are much more interested in mergers and acquisitions than are end users. I also factored in opinions from industry and financial analysts. And topped it off with my own misguided opinions.
(Note: The ticker symbol links below take you to that company's entry page on the InfoStor Market Index, which provides up-to-the-minute info on the company's stock as well as company- and competitor-related news.)
#1 -- Isilon
Isilon scooted to the top of this list because of two recent developments: (a) The company hired Qatalyst Partners to solicit potential acquisition offers. Qatalyst was the advisor to Data Domain when EMC acquired Data Domain, and Qatalyst also shepherded the HP-3PAR acquisition. (b) The NY Post reported on Friday that EMC may be close to acquiring Isilon for about $2 billion (see "EMC in exclusive talks to buy Isilon").
Isilon is known primarily for its strengths in scale-out NAS, but the company recently added support for the iSCSI SAN protocol in its OneFS operating system, enabling both file (NAS) and block (SAN) I/O under a single file system (although Isilon's storage systems do not support the Fibre Channel or FCoE protocols).
In addition to EMC, financial analysts have cited Dell, HP and IBM (and, less likely, Oracle or Cisco) as potential acquirers of Isilon (NSDQ: ISLN).
#2 -- CommVaultI don't understand why CommVault's (NSDQ: CLVT) stock jumped so high during the HP-Dell-3PAR bidding war, but it did. I guess it was because CommVault has been an acquisition speculation darling for years.
CommVault has done a great job stealing revenue from the big four vendors in the data protection space, in part because CommVault's underlying architecture is newer and designed better for rapid enhancements, as evidenced in the recent release of its Simpana 9 software (see "CommVault unveils Simpana 9").
Conventional wisdom on Wall Street has Dell (NSDQ: DELL) as the most likely suitor under the assumption that none of the leading backup/recovery vendors (EMC, Symantec, IBM, CA) would be interested in CommVault, but I'm not so sure about that. Any of those vendors would have to eat some crow if they acquired CommVault, but they might be better positioned for the long haul.
Another possible CommVault suitor: NetApp which, by the way, is the #4 storage software vendor -- ahead of CA and HP (see "The Top 6 storage software vendors").
In addition to the fact that many financial analysts put the company at the top of their storage acquisition target lists, CommVault earns the #2 spot on this list because I think the storage M&A focus is going to shift from hardware to software. And with CommVault, it's hard to argue with low debt, high growth and high margins.
#3, #4 -- Compellent, Xiotech
Isilon, Compellent and Xiotech have all been cited often as potential Dell acquisitions post-3PAR/HP. I doubt it, because Isilon/Compellent/Xiotech are gap pluggers rather than the game changer that 3PAR would have been for Dell. Isilon, Compellent or Xiotech don't give Dell the high-end array technology that would enable Dell to go up against EMC/IBM/Hitachi, although they would be good complements to Dell's EqualLogic line. On the other hand, any one of these disk array vendors would help Dell doff its "Dude, you're getting a Dell" image.
Given their technology differentiators, and the difficulty of being a relatively small player in the contracting disk array market, it's likely that one or both of these vendors will be acquired by someone.
Xiotech, which is not publicly traded and has a nice differentiator with its Intelligent Storage Element (ISE) technology, would be the least expensive buy in this category.
The question with Compellent is whether the company has enough differentiation from what the potential acquirers already have in their portfolios.
#5 -- Permabit
Earlier this year, Permabit introduced an "OEM embeddable" version of its data deduplication software. dubbed Albierio. The company seems to be off to a good start with its OEM strategy, having already racked up reseller deals with BlueArc and Xiotech (see "Data deduplication: Permabit finds success with OEM model").
As the last standing "independent" data deduplication player, Permabit could thrive with its OEM model, but in light of the IBM-Storwize and Dell-Ocarina acquisitions in the data reduction space I think Permabit is an attractive acquisition candidate. The company's focus now is on deduplication for primary storage, but there's no reason Permabit's technology couldn't be used across all storage tiers -- and that could be very attractive for some of the larger storage vendors that have a diverse mix of data reduction solutions in their portfolios. Of course, that assumes that a "one size fits all" approach to data reduction is the way the larger vendors want to go in this space.
#6 - Brocade
IBM has been mentioned most frequently as a potential suitor for Brocade. That might have changed recently with Big Blue's announcement that it plans to acquire Blade Network Technologies (BNT), making it less likely that IBM would go for Brocade.
BNT specializes in blade and rack Ethernet switches, so it's not an overlap with Brocade's business, but the IBM-BNT acquisition will still dampen speculation that IBM will scoop up Brocade. More likely, perhaps, IBM will go after Juniper Networks. (Both Brocade and Juniper are IBM partners and, making it even more interesting, Juniper is a BNT partner.)
If we take IBM out of the Brocade acquirer lineup, that would leave Dell as the most likely acquirer (although Dell is also tight with Juniper). But that goes to the heart of the question of whether Dell will, post-3PAR, try for another disk array vendor (Isilon, Compellent, Xiotech?), software vendor (CommVault?) or surprise everyone and light out into LAN/SANland via Brocade.
Making a Dell acquisition shift toward networking more likely, Dell recently hired a former Cisco exec -- Dario Zamarian -- to run its networking business. Assuming Dell turns to networking in its acquisition spree, it's a 50/50 bet between Brocade and Juniper, according to some Wall Street wags.
In an article posted on MarketWatch (see "Brocade targeted by M&A rumor mill"), Wedbush analyst Kaushik Roy was quoted as saying, "It makes a lot more sense for Dell to buy Brocade than IBM. With Dell, it's a no-brainer. If Dell has half of a brain, they should be taking Brocade out right now."
Then again, if Dell goes after Brocade (NSDQ: BRCD), they could wind up in another crazy bidding war with, say, IBM or Oracle. And Dell's been there, done that.
In addition to IBM and Dell, analysts have cited Oracle and Hitachi as possible acquirers.
#7 -- BlueArc
Hitachi Data Systems (HDS) has been mentioned as a potential suitor for BlueArc, but it doesn't seem to be in HDS' genes to take the acquisitions route. But HDS and BlueArc do have a tight relationship and BlueArc has some attractive technology differentiators.
# 8 -- FalconStor
Only one of our readers mentioned FalconStor as an acquisition target, and it was in the context of the company potentially being acquired by HDS or NEC, but FalconStor would be relatively inexpensive and the company has great technology (although not everybody knows it because FalconStor's software is often sold "under the covers" by its OEMs and resellers).
In addition to getting storage management and data protection software (VTL, CDP, data deduplication, replication, etc.) across a variety of product lines, an acquirer could put the hurt on a lot of competitors because, although a relatively small company, FalconStor's tentacles reach across a lot of vendors via its reseller deals.
The possibility of FalconStor (NSDQ: FALC) being acquired heightened recently with the resignation of ReiJane Huai, the company's CEO. In the wake of the resignation, FalconStor tapped Jim McNiel as interim CEO and president. Some analysts think that McNiel may be more open to acquisition than was Huai.
#9 -- Symantec
The latest rumors regarding Symantec centered on Microsoft as a potential acquirer (see "Is Microsoft Looking to Buy Symantec?" on InfoStor sister site eSecurity Planet).
However, that (unlikely) move would be more for Symantec's security product line, rather than its storage software, and would be in response to Intel's acquisition of McAfee.
Given the breadth of Symantec's product line, and the fact that the company would be expensive and is not a pure-play storage vendor, I put Symantec low on this list. I don't see Symantec being bought any time soon, if only because of the company's huge market cap.
#10 -- NetApp
Rumors about NetApp (NSDQ: NTAP) being acquired have existed as long as the rumors surrounding CommVault and Brocade have, maybe longer. I think the time to buy NetApp is long gone, but due to the persistence of the rumors the company still makes our Top 10 list.
I see NetApp more as an acquirer than a target. The problem with that (for NetApp) is that, if the IT market does contract down to five or six soup-to-nuts vendors, NetApp doesn't have a chance of making that list even if it does dip into its deep piggy bank to make some acquisitions. It's that logic that keeps NetApp on our Top 10 acquisition targets list.
One other company that occasionally comes up in acquisition conversations is Quantum. This would be for the company's data deduplication technology and products. However, an acquirer would also get Quantum's tape business, and I don't think any of the likely acquiring vendors is looking to add tape to their portfolio.
And in the Least-Likely-But-Often-Mentioned category of acquisition targets: EMC. The Wall Street Journal reported last week that Oracle may be eying EMC (see "EMC Shares Rise On Oracle Buyout Rumor"). Sure, that would fill in the Tier-1 storage hole in Oracle's portfolio and, more importantly, give them VMware, but I still think the Oracle-EMC acquisition speculation is ludicrous.
Related blog post:
The Top 10 storage acquisitions of 2010
Tuesday, September 14, 2010
The Top 6 storage software vendors
September 16, 2010 -- There hasn't been much change over the last year in terms of market shares for the Top 6 storage software vendors.
IDC recently released its quarterly report on the market, and EMC held on to its #1 ranking with a 24.4% market share on Q2 2010 revenue of $722 million, followed by Symantec at #2 (16.5% share, $488 in revenue), #3 IBM (13.9%, $410 million) and #4 NetApp (8.7%, $256 million).
Rounding out the Top 6 were CA and HP in a statistical tie. CA had a 3.6% market share on revenue of $108 million, and HP had a 3.3% share with revenue of $97 million. The only change in the lineup between Q2 2010 and Q2 2009 was a switch in positions between CA and HP.
In terms of revenue growth over the last 12 months, there were four gainers and two losers. Gainers included EMC (+13.3%), IBM (+10.6%), NetApp (+6%) and CA (+2%). Symantec (-6.9%) and HP (-10.3%) declined year-over-year.
Overall, the storage software market hit almost $3 billion in the second quarter, a 3.3% growth vs. the same period a year ago.
IDC segments the storage software market into eight product categories. Of those, the segments experiencing the most growth over the last year included storage infrastructure (+12.7%), archiving (+8.2%), storage management (+5.8%), and data protection and recovery (+4.9%).
For more details, see IDC's press release, "Storage Software Market Delivers Continued Growth in the Second Quarter."
Related blog post:
The Top 5 array vendors: HP #4, Dell #5
IDC recently released its quarterly report on the market, and EMC held on to its #1 ranking with a 24.4% market share on Q2 2010 revenue of $722 million, followed by Symantec at #2 (16.5% share, $488 in revenue), #3 IBM (13.9%, $410 million) and #4 NetApp (8.7%, $256 million).
Rounding out the Top 6 were CA and HP in a statistical tie. CA had a 3.6% market share on revenue of $108 million, and HP had a 3.3% share with revenue of $97 million. The only change in the lineup between Q2 2010 and Q2 2009 was a switch in positions between CA and HP.
In terms of revenue growth over the last 12 months, there were four gainers and two losers. Gainers included EMC (+13.3%), IBM (+10.6%), NetApp (+6%) and CA (+2%). Symantec (-6.9%) and HP (-10.3%) declined year-over-year.
Overall, the storage software market hit almost $3 billion in the second quarter, a 3.3% growth vs. the same period a year ago.
IDC segments the storage software market into eight product categories. Of those, the segments experiencing the most growth over the last year included storage infrastructure (+12.7%), archiving (+8.2%), storage management (+5.8%), and data protection and recovery (+4.9%).
For more details, see IDC's press release, "Storage Software Market Delivers Continued Growth in the Second Quarter."
Related blog post:
The Top 5 array vendors: HP #4, Dell #5
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."
Wednesday, August 18, 2010
NetApp hits a home run in Q1
August 18, 2010 – NetApp reported its fiscal first quarter 2011 results today, narrowly exceeding financial analysts’ expectations. But who cares about expectations? Let’s look at the (impressive) raw numbers.
For the quarter, NetApp (NASDAQ: NTAP) raked in revenue of $1.14 billion, which is a 36% increase over the same quarter a year ago ($838 million), although a 3% drop vs. the previous quarter.
GAAP net income was $142 million, vs. $52 million a year ago, while non-GAAP income was $183 million, vs. $76 million a year ago.
“With total revenue growth for the quarter of 36% and product revenue growth of 51% year over year, NetApp has begun our fiscal year with great momentum,” understated president and CEO Tom Georgens.
Company officials followed that up with predictions of $1.16 billion to $1.21 billion in revenue for the next quarter.
Highlights
The biggest growth in revenue came from hardware (which NetApp refers to as “product” revenue): At $720.8 million for the quarter, that’s a 51% increase over the same period a year ago (although down 5% sequentially). Total systems shipped increased 78% over the previous year’s quarter, with nice numbers across all segments, including entry-level (+107%), midrange (+37%) and enterprise (+102%).
The only negative I noticed was a 38% quarter-to-quarter decline in shipments of NetApp’s V-series systems, although shipments of that product line increased 42% year-over-year.
On the software revenue front (which NetApp refers to as “software entitlement & maintenance revenue”), the company pulled in $174.7 million – an increase of only 6% year-over-year and 0.5% sequentially. Hey, what do you expect when a market leader in a particular technology – data deduplication – gives it away for free? But software is the area that I would expect NetApp to improve on going forward.
Services revenue came in at $242.3 million, up 25% year-over-year and 1% sequentially.
(You may be noticing that NetApp’s quarter-to-quarter performance was not nearly as astounding as its year-over-year performance, but that’s in part because it’s previous quarter was, in fact, astounding: see “NetApp wows Wall Street, doubles quarterly profits.”
More fun facts
NTAP's gross margin in its first quarter was 64.5% (on a non-GAAP basis), while operating margin was 18.8%.
And what would any write-up on NetApp be without some fun facts on data deduplication? The company claims to have achieved “more than an exabyte of storage with deduped storage-system deployments” (which doesn’t really make sense to me) and to have “deployed more than 87,000 deduped storage systems” (again, does that mean systems with dedupe functionality baked in, or, systems that are actually using the dedupe functionality?)
But here’s the really interesting number in my opinion: NTAP's balance sheet shows $2.61 billion in cash. In light of recent acquisitions (Dell-3PAR, Dell-Ocarina, IBM-Storwize, etc.), you just have to wonder who NetApp is going to buy.
As I’ve speculated before (without an iota of knowledge in the matter), Permabit might be a palatable morsel, but maybe I’m just drunk on the dedupe juice.
Look for some acquisition speculation in my next post.
Related blog posts:
EMC breaks Q2 revenue record
Earnings recap: ELX, QLGC, CVLT, SYMC, PAR, CML, STEC, HDS
Top 10 storage acquisitions of 2010
For the quarter, NetApp (NASDAQ: NTAP) raked in revenue of $1.14 billion, which is a 36% increase over the same quarter a year ago ($838 million), although a 3% drop vs. the previous quarter.
GAAP net income was $142 million, vs. $52 million a year ago, while non-GAAP income was $183 million, vs. $76 million a year ago.
“With total revenue growth for the quarter of 36% and product revenue growth of 51% year over year, NetApp has begun our fiscal year with great momentum,” understated president and CEO Tom Georgens.
Company officials followed that up with predictions of $1.16 billion to $1.21 billion in revenue for the next quarter.
Highlights
The biggest growth in revenue came from hardware (which NetApp refers to as “product” revenue): At $720.8 million for the quarter, that’s a 51% increase over the same period a year ago (although down 5% sequentially). Total systems shipped increased 78% over the previous year’s quarter, with nice numbers across all segments, including entry-level (+107%), midrange (+37%) and enterprise (+102%).
The only negative I noticed was a 38% quarter-to-quarter decline in shipments of NetApp’s V-series systems, although shipments of that product line increased 42% year-over-year.
On the software revenue front (which NetApp refers to as “software entitlement & maintenance revenue”), the company pulled in $174.7 million – an increase of only 6% year-over-year and 0.5% sequentially. Hey, what do you expect when a market leader in a particular technology – data deduplication – gives it away for free? But software is the area that I would expect NetApp to improve on going forward.
Services revenue came in at $242.3 million, up 25% year-over-year and 1% sequentially.
(You may be noticing that NetApp’s quarter-to-quarter performance was not nearly as astounding as its year-over-year performance, but that’s in part because it’s previous quarter was, in fact, astounding: see “NetApp wows Wall Street, doubles quarterly profits.”
More fun facts
NTAP's gross margin in its first quarter was 64.5% (on a non-GAAP basis), while operating margin was 18.8%.
And what would any write-up on NetApp be without some fun facts on data deduplication? The company claims to have achieved “more than an exabyte of storage with deduped storage-system deployments” (which doesn’t really make sense to me) and to have “deployed more than 87,000 deduped storage systems” (again, does that mean systems with dedupe functionality baked in, or, systems that are actually using the dedupe functionality?)
But here’s the really interesting number in my opinion: NTAP's balance sheet shows $2.61 billion in cash. In light of recent acquisitions (Dell-3PAR, Dell-Ocarina, IBM-Storwize, etc.), you just have to wonder who NetApp is going to buy.
As I’ve speculated before (without an iota of knowledge in the matter), Permabit might be a palatable morsel, but maybe I’m just drunk on the dedupe juice.
Look for some acquisition speculation in my next post.
Related blog posts:
EMC breaks Q2 revenue record
Earnings recap: ELX, QLGC, CVLT, SYMC, PAR, CML, STEC, HDS
Top 10 storage acquisitions of 2010
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.
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, May 27, 2010
More musings on NetApp's earnings
May 27, 2010 – The investment community was still atwitter today after NetApp’s earnings report yesterday which, among other eye-openers, included fourth quarter revenue of $1.17 billion, fiscal year revenue of $3.93 billion, and profits of 50 cents a share, excluding items (or “adjusted income”), which was well ahead of analysts’ predictions of 44 cents per share (see “NetApp wows Wall Street, doubles quarterly profits”).
NetApp (NSDQ: NTAP) shares were trading at $38.06 at one point today, up 17.36% and representing a three-year high, despite many financial analysts putting a “hold” recommendation on the stock yesterday.
Disclosure: I do not, and never did (unfortunately), own NetApp stock. That’s partially due to journalistic ethics, and partially because I’m stupid.
Another interesting tidbit that I failed to mention in our news coverage was that 71% of NetApp’s revenue came from indirect (channel) sales, and that Avnet/Arrow accounted for 27% of total revenue.
In a report on NetApp’s earnings, Canaccord/Genuity analyst Paul Mansky noted that “NetApp is firing on all cylinders and has been for three to four quarters.” However, in the “investment risk” portion of his report, Mansky reiterated his opinion that:
“Longer term, it is unclear how NetApp plans to maintain its current level of relevance as the market consolidates to vendor-centric vertical stacks. The company’s sole OEM partnership, IBM, has not evolved as planned. Absent a greater breadth of solutions, partners and services, NetApp could be relegated to a niche vendor in the data center of tomorrow.”
Which turns the old “Who will acquire NetApp?” question into perhaps a more relevant query: “Who will NetApp acquire?”
NetApp is about 18 years old, and to paraphrase one of the financial analysts: NetApp is 18, but still growing like it’s an adolescent.
Realizing NetApp’s age led me to a strange, but true, observation. I only have a couple professional memories from a period almost 20 years ago, but one is my first meeting with NetApp (Network Appliance at the time) execs when they introduced their first product. We had written some articles about Auspex, and the Network Appliance propeller heads wanted to show us their better mousetrap.
The fact that this meeting was one of only a couple that I can remember from my professional life 20 years ago can be attributed to either (a) my professional life was rather uneventful at the time, (b) my brain cells have eroded in accordance with my age and beverage preferences, or (c) I was extremely astute and prescient and recognized immediately that this “appliance” thing they had would truly shake up the storage industry. Place all bets on (a) or (b).
My thought at the time: What respectable IT person would buy something that the vendor called an “appliance?” Moreover, who would buy from a vendor that actually incorporated that word in its company name? At the time, an appliance conjured up an image of a toaster, or a Cuisinart. (Remember: This was back when a SAN was called a VAXcluster.)
The rest, as they say, is storage history.
NetApp (NSDQ: NTAP) shares were trading at $38.06 at one point today, up 17.36% and representing a three-year high, despite many financial analysts putting a “hold” recommendation on the stock yesterday.
Disclosure: I do not, and never did (unfortunately), own NetApp stock. That’s partially due to journalistic ethics, and partially because I’m stupid.
Another interesting tidbit that I failed to mention in our news coverage was that 71% of NetApp’s revenue came from indirect (channel) sales, and that Avnet/Arrow accounted for 27% of total revenue.
In a report on NetApp’s earnings, Canaccord/Genuity analyst Paul Mansky noted that “NetApp is firing on all cylinders and has been for three to four quarters.” However, in the “investment risk” portion of his report, Mansky reiterated his opinion that:
“Longer term, it is unclear how NetApp plans to maintain its current level of relevance as the market consolidates to vendor-centric vertical stacks. The company’s sole OEM partnership, IBM, has not evolved as planned. Absent a greater breadth of solutions, partners and services, NetApp could be relegated to a niche vendor in the data center of tomorrow.”
Which turns the old “Who will acquire NetApp?” question into perhaps a more relevant query: “Who will NetApp acquire?”
NetApp is about 18 years old, and to paraphrase one of the financial analysts: NetApp is 18, but still growing like it’s an adolescent.
Realizing NetApp’s age led me to a strange, but true, observation. I only have a couple professional memories from a period almost 20 years ago, but one is my first meeting with NetApp (Network Appliance at the time) execs when they introduced their first product. We had written some articles about Auspex, and the Network Appliance propeller heads wanted to show us their better mousetrap.
The fact that this meeting was one of only a couple that I can remember from my professional life 20 years ago can be attributed to either (a) my professional life was rather uneventful at the time, (b) my brain cells have eroded in accordance with my age and beverage preferences, or (c) I was extremely astute and prescient and recognized immediately that this “appliance” thing they had would truly shake up the storage industry. Place all bets on (a) or (b).
My thought at the time: What respectable IT person would buy something that the vendor called an “appliance?” Moreover, who would buy from a vendor that actually incorporated that word in its company name? At the time, an appliance conjured up an image of a toaster, or a Cuisinart. (Remember: This was back when a SAN was called a VAXcluster.)
The rest, as they say, is storage history.
Wednesday, May 19, 2010
Solid storage growth in HP’s Q2 report
May 19, 2010 – Storage wasn’t the brightest spot in HP’s fiscal Q2 earnings report yesterday, but it was far from the darkest spot. In fact, there weren’t any dark spots.
The only laggards were software (down 1% from last year) and services (which grew only 2% from the previous year, to $8.7 billion).
Overall, HP (NYSE: HPQ) posted revenue for the second quarter of $30.8 billion, up 13% over the same quarter last year. Net earnings were $2.2 billion for the quarter, an increase of 28% from fiscal Q2 2009.
It’s difficult to put context on earnings these days because of the relative macro economic conditions today vs. a year ago, but by anyone’s estimates this was a stellar performance by HP in a still-tough climate.
In fact, it prompted The Motley Fool to pen a column comparing HP to IBM (see “HP is the New Big Blue”).
Unfortunately, HP does not get real granular in breaking down its product lines, but the Enterprise Storage and Server segment racked up $4.5 billion in total revenue, up 31% over the previous year. That segment was led by Industry Standard Server revenue, which increased 54%, while the Storage segment revenue increased a solid 16%, with the EVA product line up 3%.
Operating profit for the Enterprise Storage and Servers segment was $571 million (12.6% of revenue), which was up from $250 million (7.2% of revenue) in Q2 2009.
HP is clearly a bellwether for the overall IT industry, although not so much for the storage sector. However, NetApp and Brocade are bellwethers for the storage industry. Brocade (NSDQ: BRCD) will report results for its fiscal second quarter after the market closes tomorrow (Thurs., May 20), and NetApp (NSDQ: NTAP) will announce results for its fiscal fourth quarter next week (Wed., May 26).
Stay tuned to see if you’re in the right business or not as the market turns.
For comments on the results from Brocade’s and NetApp’s previous quarter earnings report, see my blog posts:
Brocade’s earnings a mixed bag
NetApp hit$ a home run
The only laggards were software (down 1% from last year) and services (which grew only 2% from the previous year, to $8.7 billion).
Overall, HP (NYSE: HPQ) posted revenue for the second quarter of $30.8 billion, up 13% over the same quarter last year. Net earnings were $2.2 billion for the quarter, an increase of 28% from fiscal Q2 2009.
It’s difficult to put context on earnings these days because of the relative macro economic conditions today vs. a year ago, but by anyone’s estimates this was a stellar performance by HP in a still-tough climate.
In fact, it prompted The Motley Fool to pen a column comparing HP to IBM (see “HP is the New Big Blue”).
Unfortunately, HP does not get real granular in breaking down its product lines, but the Enterprise Storage and Server segment racked up $4.5 billion in total revenue, up 31% over the previous year. That segment was led by Industry Standard Server revenue, which increased 54%, while the Storage segment revenue increased a solid 16%, with the EVA product line up 3%.
Operating profit for the Enterprise Storage and Servers segment was $571 million (12.6% of revenue), which was up from $250 million (7.2% of revenue) in Q2 2009.
HP is clearly a bellwether for the overall IT industry, although not so much for the storage sector. However, NetApp and Brocade are bellwethers for the storage industry. Brocade (NSDQ: BRCD) will report results for its fiscal second quarter after the market closes tomorrow (Thurs., May 20), and NetApp (NSDQ: NTAP) will announce results for its fiscal fourth quarter next week (Wed., May 26).
Stay tuned to see if you’re in the right business or not as the market turns.
For comments on the results from Brocade’s and NetApp’s previous quarter earnings report, see my blog posts:
Brocade’s earnings a mixed bag
NetApp hit$ a home run
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 $1.4 billion), followed by EMC with a 15.7% cut. Again, a little surprising because I would have guessed NetApp was in the #2 position.
You may have noticed that Hitachi Data Systems does not show up in the top five anything in the IDC report. That’s because IDC does not include OEM sales in its tracking. As such, HDS sales revenues do not reflect their OEM sales to HP, nor to Sun -- a partnership that’s set to expire on March 31.
See Kevin Komiega’s new story, Oracle-Sun ends HDS partnership
and my blog post, Who wins/loses in the Oracle-HDS breakup?
And you can read the full IDC press release here.
Thursday, February 18, 2010
NetApp hit$ a home run
February 18, 2010 – Maybe it’s a sign that the IT spending turnaround is ramping up, and maybe it’s just an indication of NetApp executing well, but the company wowed Wall Street yesterday with the results of its fiscal third quarter, which ended January 29.
Highlights: GAAP revenues for the quarter were $1.01 billion, topping both internal and external expectations. That compares to $746 million in the same period last year.
GAAP net income for the fiscal third quarter 2010 was $108 million, compared to a net loss of $82 million in Q3 of the prior year. Non-GAAP net income in the most recent quarter was $144 million.
Gross margins were estimated at 63.2%.
And the surge may carry into the fiscal fourth quarter: NetApp execs estimated revenues for Q4 at $1.07 billion to $1.10 billion.
In his prepared statements, NetApp president and CEO Tom Georgens gushed: “The NetApp team demonstrated remarkable execution this quarter. With record revenues, record profits and record EPS, the company produced double-digit year over year revenue growth and our operations team shipped a record number of systems, despite persistent supply constraints.”
And here’s CFO Steve Gomo: “NetApp significantly outpaced both the market and the competition and we are forecasting Q4 sequential growth at about 6% to 9%. These sequential growth numbers translate into about 22% to 25% year over year organic growth in revenue, a figure that our competitors are nowhere near achieving in their storage businesses.”
The company played up its partnership announcements in the fiscal third quarter, including those with Cisco and VMware (see “NetApp, Cisco, VMware collaborate on the cloud” ), Microsoft, and Fujitsu.
Revenues were strong across most of the company’s product lines, but execs emphasized the company’s performance in the virtualization space – both in the virtual server market and the performance of the company’s V-Series virtualization platforms. In addition, NetApp has high hopes for the cloud computing arena, where it is targeting big providers such as AT&T.
NetApp is expected to hire around 200 people in the next quarter. And that won’t be difficult: Last month, NetApp was ranked #7 in Fortune magazine’s “100 Best Companies to Work For” list for 2010.
Highlights: GAAP revenues for the quarter were $1.01 billion, topping both internal and external expectations. That compares to $746 million in the same period last year.
GAAP net income for the fiscal third quarter 2010 was $108 million, compared to a net loss of $82 million in Q3 of the prior year. Non-GAAP net income in the most recent quarter was $144 million.
Gross margins were estimated at 63.2%.
And the surge may carry into the fiscal fourth quarter: NetApp execs estimated revenues for Q4 at $1.07 billion to $1.10 billion.
In his prepared statements, NetApp president and CEO Tom Georgens gushed: “The NetApp team demonstrated remarkable execution this quarter. With record revenues, record profits and record EPS, the company produced double-digit year over year revenue growth and our operations team shipped a record number of systems, despite persistent supply constraints.”
And here’s CFO Steve Gomo: “NetApp significantly outpaced both the market and the competition and we are forecasting Q4 sequential growth at about 6% to 9%. These sequential growth numbers translate into about 22% to 25% year over year organic growth in revenue, a figure that our competitors are nowhere near achieving in their storage businesses.”
The company played up its partnership announcements in the fiscal third quarter, including those with Cisco and VMware (see “NetApp, Cisco, VMware collaborate on the cloud” ), Microsoft, and Fujitsu.
Revenues were strong across most of the company’s product lines, but execs emphasized the company’s performance in the virtualization space – both in the virtual server market and the performance of the company’s V-Series virtualization platforms. In addition, NetApp has high hopes for the cloud computing arena, where it is targeting big providers such as AT&T.
NetApp is expected to hire around 200 people in the next quarter. And that won’t be difficult: Last month, NetApp was ranked #7 in Fortune magazine’s “100 Best Companies to Work For” list for 2010.
Monday, January 25, 2010
Users’ top storage technologies, vendors for 2010
January 25, 2010 – Results from a recent end-user survey conducted by TheInfoPro research firm included a few surprises regarding what technologies are “hot” and which vendors will be “winners” this year. TheInfoPro surveyed and interviewed storage professionals in the Fortune 1000 (F1000), as well as midsize enterprises (MSEs).
According to TheInfoPro’s Heat Index, which measures user demand for technologies -- as well as the relative size of market opportunities for vendors -- data deduplication and primary storage data reduction (or online data reduction) will top the needs of both F1000 companies and MSEs in 2010.
The data deduplication entry was predictable, but users’ prioritization of data reduction technologies for primary storage came as somewhat of a surprise to me.
Not for Anders Lofgren, TheInfoPro’s chief research officer. “It’s not surprising, because the emphasis is still on cost reduction. It’s all about managing capital costs on the hardware side and managing operating costs on the staffing side,” says Lofgren.
The list is growing, but early entrants in the online data reduction space include EMC and NetApp, as well as vendors such as Exar, greenBytes, and Storwize. (See “Consider data reduction for primary storage” ). In TheInfoPro survey, not surprisingly, EMC and NetApp were mentioned most frequently.
Also ranking high in the TheInfoPro’s Heat Index were the F1000’s planned use of solid-state disk (SSD) drives, 8Gbps Fibre Channel, and virtual server data management.
TheInfoPro’s Heat Indexes also indicate increased use of technologies such as thin provisioning, email archiving, information lifecycle management (ILM), storage resource management (SRM), automated tiering and provisioning, and backup management for virtual servers. Among SMEs, interest in block virtualization is picking up steam, and MSEs plan to expand their use of remote replication, 10GbE, and enterprise-class SAS drives.
Who are the “most exciting” storage vendors in 2010? Among MSEs, the top picks were somewhat surprising: Compellent, 3PAR and Hitachi Data Systems. The top three “in use” vendors were EMC, NetApp and Compellent.
Among Fortune 1000 firms, the most exciting storage vendors are EMC, NetApp and IBM. The InfoPro noted that:
--The acquisition of Data Domain boosted EMC’s data deduplication “in use” share in the Fortune 1000 from about 5% to 25%.
--In the F1000 space, EMC’s V-Max refresh rates appear to be driving the majority of SSD discussions. For example, SSD “in use” responses quadrupled from six months ago (albeit from a base of near zero).
--In email archiving, Symantec, EMC and IBM consistently placed at the top of end users’ lists. IBM’s “in use” activity in the F1000 grew the fastest, compared to TheInfoPro’s survey of six months ago, while both Symantec and CommVault also showed significant improvement.
Visit TheInfoPro’s site for more insights from the firms’ ongoing end-user surveys.
Related InfoStor post:
The top 5 storage technologies of 2009 (and 2010?)
According to TheInfoPro’s Heat Index, which measures user demand for technologies -- as well as the relative size of market opportunities for vendors -- data deduplication and primary storage data reduction (or online data reduction) will top the needs of both F1000 companies and MSEs in 2010.
The data deduplication entry was predictable, but users’ prioritization of data reduction technologies for primary storage came as somewhat of a surprise to me.
Not for Anders Lofgren, TheInfoPro’s chief research officer. “It’s not surprising, because the emphasis is still on cost reduction. It’s all about managing capital costs on the hardware side and managing operating costs on the staffing side,” says Lofgren.
The list is growing, but early entrants in the online data reduction space include EMC and NetApp, as well as vendors such as Exar, greenBytes, and Storwize. (See “Consider data reduction for primary storage” ). In TheInfoPro survey, not surprisingly, EMC and NetApp were mentioned most frequently.
Also ranking high in the TheInfoPro’s Heat Index were the F1000’s planned use of solid-state disk (SSD) drives, 8Gbps Fibre Channel, and virtual server data management.
TheInfoPro’s Heat Indexes also indicate increased use of technologies such as thin provisioning, email archiving, information lifecycle management (ILM), storage resource management (SRM), automated tiering and provisioning, and backup management for virtual servers. Among SMEs, interest in block virtualization is picking up steam, and MSEs plan to expand their use of remote replication, 10GbE, and enterprise-class SAS drives.
Who are the “most exciting” storage vendors in 2010? Among MSEs, the top picks were somewhat surprising: Compellent, 3PAR and Hitachi Data Systems. The top three “in use” vendors were EMC, NetApp and Compellent.
Among Fortune 1000 firms, the most exciting storage vendors are EMC, NetApp and IBM. The InfoPro noted that:
--The acquisition of Data Domain boosted EMC’s data deduplication “in use” share in the Fortune 1000 from about 5% to 25%.
--In the F1000 space, EMC’s V-Max refresh rates appear to be driving the majority of SSD discussions. For example, SSD “in use” responses quadrupled from six months ago (albeit from a base of near zero).
--In email archiving, Symantec, EMC and IBM consistently placed at the top of end users’ lists. IBM’s “in use” activity in the F1000 grew the fastest, compared to TheInfoPro’s survey of six months ago, while both Symantec and CommVault also showed significant improvement.
Visit TheInfoPro’s site for more insights from the firms’ ongoing end-user surveys.
Related InfoStor post:
The top 5 storage technologies of 2009 (and 2010?)
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