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)
Showing posts with label Ocarina. Show all posts
Showing posts with label Ocarina. Show all posts
Sunday, January 2, 2011
Wednesday, August 11, 2010
Top 10 storage acquisitions of 2010
UPDATED August 16, 2010 – I originally posted this Top 10 acquisitions piece last week, with EMC's acquisition of Greenplum in the #1 spot. Today's announcement that Dell plans to acquire 3PAR for a whopping $1.15 billion clearly catapults that deal into the #1 position. As such, here's my revised list of the Top 10 storage acquisitions of 2010, in ascending order:
#10: EXAR – NETERION
This one probably wouldn’t have made the Top 10 list except for the fact that it’s Exar’s second storage-related acquisition in the last year, indicating that this relatively unknown vendor is up to something in the storage market.
The acquisition of Hifn last year put Exar in the storage optimization market with data deduplication, compression and encryption technology. Which put them into discussions that include Storwize (acquired by IBM, see below), Ocarina Networks (acquired by Dell, see below) and Permabit.
The acquisition of Neterion this year (reportedly for $10 million to $11 million) puts Exar in the 10GbE/FCoE adapter space, and might get them a place in conversations typically focused on vendors such as Emulex, QLogic, Brocade, Broadcom and Intel.
“We see a lot of synergy between Neterion’s virtual I/O technology and Hifn’s data compression, security [encryption] and data deduplication technologies,” said John Williams, vice president of Exar’s datacom and storage business.”
Interesting, but does an engineering-focused company have the marketing might to compete with the big boys? Well, Neterion OEMs include EMC, HP, IBM, Fujitsu and Hitachi, so the company at least knows how to play with the big boys.
See “Exar to acquire Neterion”
#9: SOLARWINDS – TEK-TOOLS
As with Exar, this one made the Top 10 list in large part due to the surprise factor: Few in the storage world had ever heard of SolarWinds, which specializes in network and applications management software.
Tek-Tools has for a long time specialized in storage resource management (SRM) tools, and SolarWinds plans to integrate Tek-Tools’ Profiler SRM suite into its Orion portfolio by the end of this year. Sounds like a good fit, but since when did any acquisition-driven integration project get completed on schedule?
SolarWinds paid $42 million for Tek-Tools. And if that seems steep, consider the fact that Tek-Tools partners and resellers include 3PAR, AdviStor, Agami, Bell Micro, Brocade, CA, Cambridge Computer, CDW, Dell, EMC, GlassHouse, the Harding Group, HP, IBM, Kisdata, LSI, the Microsoft Developer Network, MySQL AB, NetApp, Novell, PC Mall, Quantum, Red Hat, Siemens Business, Sun, Syncsort, Techmate, VMware and Xiotech.
See “SolarWinds acquires Tek-Tools for SRM”
#8: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing. PMC-Sierra acquired Adaptec for $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
The interesting thing about this acquisition is that it puts PMC-Sierra in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought on the semiconductor front.
See “PMC-Sierra to buy Adaptec’s channel storage business”
#7: NETAPP – BYCAST
The terms of this deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software.”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#6: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE – a market owned largely by Broadcom and Intel.
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s (at the time) loose footing. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines.”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), most notably with HP. This puts Emulex at the table with Intel and Broadcom (which it beat out for the HP business) and may strengthen its position vs. QLogic and Brocade. In addition to HP, Emulex has design wins with vendors such as Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#5: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody. And this one (along with #4, see below) confirmed that storage optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
That led some analysts to predict that Dell is pursuing a one-size-fits-all approach to data deduplication where Ocarina’s technology will be used across the storage spectrum. If true, that would be bad news for Dell dedupe partners Symantec, CommVault and maybe even EMC Data Domain. But I don’t think that’s Dell’s game plan, at least not for the foreseeable future.
I think Dell will initially leverage Ocarina’s technology in specific image-intensive, fixed-content applications, and only on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will continue to use Symantec, CommVault and Data Domain where those companies’ technologies make more sense, or where customers demand it.
Besides, the Ocarina technology could be used in conjunction with deduplication technology from vendors such as Symantec and CommVault.
And in a related Top 10 acquisition . . .
#4: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in the #1 spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
IBM didn’t lay out specific plans, and it already has some good data reduction technology, but it looks like Big Blue will apply the Storwize technology to its high-end XIV system, Scale-Out Network Attached Storage (SONAS) platform, System Storage Easy Tier, and maybe even its ProtecTIER deduplication products.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
Read the full story on InfoStor partner site Enterprise Storage Forum: “IBM to Buy Storwize for Real-Time Data Compression.” And check out Kevin Komiega’s blog post: “IBM to Acquire Storwize.”
#3: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor (because Vision Solutions isn’t exactly well-known in the storage community) and it also ranked high on dollars, being valued at $242 million. Those two factors earned it the #2 ranking, although IBM-Storwize and Dell-Ocarina may be more interesting and certainly got a lot more ink.
The $242 million amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, but the smart money was on vendors such as Dell and HP as potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#2: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list. And besides, what would a Top 10 Storage Acquisitions list be without an EMC entry?
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum will become the foundation of a new division within EMC’s Information Infrastructure business.
So it’s a nice fit with EMC’s private cloud initiatives, but it also roughens up the competition between EMC, Oracle, IBM and Sun. Do you have a feeling that there’s at least one more big – very big – acquisition on the way?
See “EMC acquires data warehousing vendor Greenplum.”
#1: DELL -- 3PAR
At approximately $1.15 billion, Dell's planned acquisition of 3PAR is in the same ballpark as EMC's acquisition of Data Domain last year, both of which qualify as game changers.
Dell has commenced a tender offer to acquire all outstanding shares of 3PAR stock for $18 a share, or about an 86% permium over 3PAR's closing price on Friday.
That hefty price tag suggests that there were other bidders for 3PAR. And if anyone doubted that Dell wants to be a real (as opposed to reseller) player in the storage space, the 3PAR acquisition should assuage those doubts.
This announcement will probably once again call into question Dell's reseller partnership with EMC, but I don't see why. The Dell-EMC marriage will run its course one way or the other, but the outcome won't have anything to do with the 3PAR deal.
However, when you look at all of Dell's storage acquisitions (3PAR, Ocarina, EqualLogic, Exanet, Scalent and probably more to come), Dell and EMC could be on an accelerated path to splitsville. (Reportedly, Dell says that there is only about a 20% overlap between the 3PAR and Dell/EMC product lines.)
Historically, the summer months have been ripe for storage acquisitions so, given the prevailing climate, fasten your seatbelts. I may have to update this Top 10 list within the next two weeks.
#10: EXAR – NETERION
This one probably wouldn’t have made the Top 10 list except for the fact that it’s Exar’s second storage-related acquisition in the last year, indicating that this relatively unknown vendor is up to something in the storage market.
The acquisition of Hifn last year put Exar in the storage optimization market with data deduplication, compression and encryption technology. Which put them into discussions that include Storwize (acquired by IBM, see below), Ocarina Networks (acquired by Dell, see below) and Permabit.
The acquisition of Neterion this year (reportedly for $10 million to $11 million) puts Exar in the 10GbE/FCoE adapter space, and might get them a place in conversations typically focused on vendors such as Emulex, QLogic, Brocade, Broadcom and Intel.
“We see a lot of synergy between Neterion’s virtual I/O technology and Hifn’s data compression, security [encryption] and data deduplication technologies,” said John Williams, vice president of Exar’s datacom and storage business.”
Interesting, but does an engineering-focused company have the marketing might to compete with the big boys? Well, Neterion OEMs include EMC, HP, IBM, Fujitsu and Hitachi, so the company at least knows how to play with the big boys.
See “Exar to acquire Neterion”
#9: SOLARWINDS – TEK-TOOLS
As with Exar, this one made the Top 10 list in large part due to the surprise factor: Few in the storage world had ever heard of SolarWinds, which specializes in network and applications management software.
Tek-Tools has for a long time specialized in storage resource management (SRM) tools, and SolarWinds plans to integrate Tek-Tools’ Profiler SRM suite into its Orion portfolio by the end of this year. Sounds like a good fit, but since when did any acquisition-driven integration project get completed on schedule?
SolarWinds paid $42 million for Tek-Tools. And if that seems steep, consider the fact that Tek-Tools partners and resellers include 3PAR, AdviStor, Agami, Bell Micro, Brocade, CA, Cambridge Computer, CDW, Dell, EMC, GlassHouse, the Harding Group, HP, IBM, Kisdata, LSI, the Microsoft Developer Network, MySQL AB, NetApp, Novell, PC Mall, Quantum, Red Hat, Siemens Business, Sun, Syncsort, Techmate, VMware and Xiotech.
See “SolarWinds acquires Tek-Tools for SRM”
#8: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing. PMC-Sierra acquired Adaptec for $34 million.
In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.
The interesting thing about this acquisition is that it puts PMC-Sierra in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought on the semiconductor front.
See “PMC-Sierra to buy Adaptec’s channel storage business”
#7: NETAPP – BYCAST
The terms of this deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically dispersed locations into a single pool for storing fixed content data.”
See “NetApp to acquire Bycast for cloud storage software.”
NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.
Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.
#6: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE – a market owned largely by Broadcom and Intel.
The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s (at the time) loose footing. Emulex paid a high price for ServerEngines, but there wasn’t any choice.
According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”
But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”
See “Emulex to acquire ServerEngines.”
The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), most notably with HP. This puts Emulex at the table with Intel and Broadcom (which it beat out for the HP business) and may strengthen its position vs. QLogic and Brocade. In addition to HP, Emulex has design wins with vendors such as Dell, EMC, HDS, HP, IBM and NetApp.
ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.
#5: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody. And this one (along with #4, see below) confirmed that storage optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.
According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”
That led some analysts to predict that Dell is pursuing a one-size-fits-all approach to data deduplication where Ocarina’s technology will be used across the storage spectrum. If true, that would be bad news for Dell dedupe partners Symantec, CommVault and maybe even EMC Data Domain. But I don’t think that’s Dell’s game plan, at least not for the foreseeable future.
I think Dell will initially leverage Ocarina’s technology in specific image-intensive, fixed-content applications, and only on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will continue to use Symantec, CommVault and Data Domain where those companies’ technologies make more sense, or where customers demand it.
Besides, the Ocarina technology could be used in conjunction with deduplication technology from vendors such as Symantec and CommVault.
And in a related Top 10 acquisition . . .
#4: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in the #1 spot among Hot Storage Technologies.
Rumors put this deal in the range of $140 million.
IBM didn’t lay out specific plans, and it already has some good data reduction technology, but it looks like Big Blue will apply the Storwize technology to its high-end XIV system, Scale-Out Network Attached Storage (SONAS) platform, System Storage Easy Tier, and maybe even its ProtecTIER deduplication products.
Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.
It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.
Read the full story on InfoStor partner site Enterprise Storage Forum: “IBM to Buy Storwize for Real-Time Data Compression.” And check out Kevin Komiega’s blog post: “IBM to Acquire Storwize.”
#3: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor (because Vision Solutions isn’t exactly well-known in the storage community) and it also ranked high on dollars, being valued at $242 million. Those two factors earned it the #2 ranking, although IBM-Storwize and Dell-Ocarina may be more interesting and certainly got a lot more ink.
The $242 million amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.
Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, but the smart money was on vendors such as Dell and HP as potential acquirers.
Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.
See “Vision Solutions to acquire Double-Take”
#2: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list. And besides, what would a Top 10 Storage Acquisitions list be without an EMC entry?
Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.
In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum will become the foundation of a new division within EMC’s Information Infrastructure business.
So it’s a nice fit with EMC’s private cloud initiatives, but it also roughens up the competition between EMC, Oracle, IBM and Sun. Do you have a feeling that there’s at least one more big – very big – acquisition on the way?
See “EMC acquires data warehousing vendor Greenplum.”
#1: DELL -- 3PAR
At approximately $1.15 billion, Dell's planned acquisition of 3PAR is in the same ballpark as EMC's acquisition of Data Domain last year, both of which qualify as game changers.
Dell has commenced a tender offer to acquire all outstanding shares of 3PAR stock for $18 a share, or about an 86% permium over 3PAR's closing price on Friday.
That hefty price tag suggests that there were other bidders for 3PAR. And if anyone doubted that Dell wants to be a real (as opposed to reseller) player in the storage space, the 3PAR acquisition should assuage those doubts.
This announcement will probably once again call into question Dell's reseller partnership with EMC, but I don't see why. The Dell-EMC marriage will run its course one way or the other, but the outcome won't have anything to do with the 3PAR deal.
However, when you look at all of Dell's storage acquisitions (3PAR, Ocarina, EqualLogic, Exanet, Scalent and probably more to come), Dell and EMC could be on an accelerated path to splitsville. (Reportedly, Dell says that there is only about a 20% overlap between the 3PAR and Dell/EMC product lines.)
Historically, the summer months have been ripe for storage acquisitions so, given the prevailing climate, fasten your seatbelts. I may have to update this Top 10 list within the next two weeks.
Monday, July 19, 2010
Dell to acquire Ocarina for data deduplication
July 19, 2010 – Dell dropped a bombshell on the data deduplication market today with the announcement that is has signed an agreement to buy Ocarina Networks. The amount of the deal was not disclosed (but I’m working on that). We’ll be following up on this announcement in the near future as we get more info, but for now:
Ocarina has content-aware storage optimization technology – data deduplication plus compression – that until recently it sold bundled in appliances. Less than a month ago, the company announced an embeddable version of its ECOsystem data reduction technology targeted at OEMs.
Since that announcement came amidst rumors that IBM was about to buy Storwize (an Ocarina competitor) for $140 million, the Ocarina announcement led to speculation about which vendors might adopt the technology, as well as which of Ocarina’s partners might acquire the company. (The IBM-Storwize rumor has, at least for now, fizzled out.)
In a blog on Ocarina’s announcement, I opined that HP might be interested in Ocarina (see “Ocarina: 4 dedupe predictions, and an OEM strategy,” a June 22 blog post). Along with EMC, Hitachi Data Systems, BlueArc and others, HP is one of Ocarina’s partners.
That level of perspicuity is why I don’t invest in storage vendors.
Until the announcement of the embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive storage.
In Dell’s press release on the acquisition announcement, Ocarina CEO Murli Thirumale was quoted as saying “This brings deduplication to not only primary storage, but also to key storage workflows including backup, replication, migration and tiering.”
However, the release also stated that “Ocarina brings a leading deduplication capability to complement Dell’s EqualLogic solutions.” And Brad Anderson, senior vice president in Dell’s Enterprise Product Group, also singled out the EqualLogic product line in a quote: “Ocarina provides an important component of our data management portfolio and our EqualLogic ecosystem . . . .”
So, the Ocarina technology will be applied only to the EqualLogic line of iSCSI arrays? Or will it be applied across the board; in other words, all of Dell’s storage systems? And if the latter is correct, what does that mean for Dell’s existing data deduplication technologies and partners?
Will Dell still need deduplication partners CommVault and Symantec?
What are the implications for Dell’s reseller deal with EMC for Data Domain deduplication systems?
Will Dell eventually have one deduplication technology, or will the company maintain a menu of options?
Where does this leave other data reduction specialists, such as GreenBytes, Exar and Permabit, which recently announced an embeddable version of its storage optimization technology (see “Permabit deduplicates primary storage”)?
And how will the deduplication kingpins – NetApp and EMC – react?
For now, more questions than answers.
Related blog posts:
“Ocarina: 4 dedupe predictions, and an OEM strategy” (June 22)
IBM to acquire Storwize for $140 million? (June 14)
And here's a blog post on the Dell-Ocarina acquisition from David West, CommVault's vice president of marketing and business development: http://news.commvault.com/DavidWest/000049_A_Complementary_Approach_to_Deduplication.asp
Ocarina has content-aware storage optimization technology – data deduplication plus compression – that until recently it sold bundled in appliances. Less than a month ago, the company announced an embeddable version of its ECOsystem data reduction technology targeted at OEMs.
Since that announcement came amidst rumors that IBM was about to buy Storwize (an Ocarina competitor) for $140 million, the Ocarina announcement led to speculation about which vendors might adopt the technology, as well as which of Ocarina’s partners might acquire the company. (The IBM-Storwize rumor has, at least for now, fizzled out.)
In a blog on Ocarina’s announcement, I opined that HP might be interested in Ocarina (see “Ocarina: 4 dedupe predictions, and an OEM strategy,” a June 22 blog post). Along with EMC, Hitachi Data Systems, BlueArc and others, HP is one of Ocarina’s partners.
That level of perspicuity is why I don’t invest in storage vendors.
Until the announcement of the embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive storage.
In Dell’s press release on the acquisition announcement, Ocarina CEO Murli Thirumale was quoted as saying “This brings deduplication to not only primary storage, but also to key storage workflows including backup, replication, migration and tiering.”
However, the release also stated that “Ocarina brings a leading deduplication capability to complement Dell’s EqualLogic solutions.” And Brad Anderson, senior vice president in Dell’s Enterprise Product Group, also singled out the EqualLogic product line in a quote: “Ocarina provides an important component of our data management portfolio and our EqualLogic ecosystem . . . .”
So, the Ocarina technology will be applied only to the EqualLogic line of iSCSI arrays? Or will it be applied across the board; in other words, all of Dell’s storage systems? And if the latter is correct, what does that mean for Dell’s existing data deduplication technologies and partners?
Will Dell still need deduplication partners CommVault and Symantec?
What are the implications for Dell’s reseller deal with EMC for Data Domain deduplication systems?
Will Dell eventually have one deduplication technology, or will the company maintain a menu of options?
Where does this leave other data reduction specialists, such as GreenBytes, Exar and Permabit, which recently announced an embeddable version of its storage optimization technology (see “Permabit deduplicates primary storage”)?
And how will the deduplication kingpins – NetApp and EMC – react?
For now, more questions than answers.
Related blog posts:
“Ocarina: 4 dedupe predictions, and an OEM strategy” (June 22)
IBM to acquire Storwize for $140 million? (June 14)
And here's a blog post on the Dell-Ocarina acquisition from David West, CommVault's vice president of marketing and business development: http://news.commvault.com/DavidWest/000049_A_Complementary_Approach_to_Deduplication.asp
Tuesday, June 22, 2010
Ocarina: 4 dedupe predictions, and an OEM strategy
June 22, 2010 – A couple of recent news announcements/rumors have focused attention on data reduction (compression/deduplication) for primary storage, also referred to as primary storage optimization, capacity optimization, storage efficiency, and many other terms that may be confusing end users.
First, Permabit announced a software-only version of its data deduplication technology designed for storage hardware and software OEMs (see “Permabit deduplicates primary storage”). If Permabit succeeds in nailing a major OEM deal or two (and the company claims to have at least one in the works) this could be a game changer. For a second opinion on that, see Jeff Boles’ blog post.
Second, the rumors are still swirling around IBM’s alleged negotiations to buy primary storage compression specialist Storwize (see “IBM to acquire Storwize for $140 million?”).
I recently spoke to Murli Thirumale, CEO at Ocarina Networks, which is a Storwize competitor and soon-to-be Permabit competitor. Leading up to a product/strategy announcement that Ocarina made today (see below), Murli offered four predictions on data reduction for primary storage:
--“Every major storage vendor will have primary storage deduplication in their portfolio by 2011, whether by building it or buying it. And by 2012 every major host vendor – including servers and virtualization platforms – will have data reduction built in.”
--“The compression vs. deduplication argument will go away as users realize that you need both. Each technology has advantages/disadvantages for different data types and access patterns.” [Ocarina’s technology combines compression and deduplication.]
--“The industry will eventually have solutions integrated across all tiers of storage, rather than point solutions for different tiers. You shouldn’t have to re-hydrate across tiers or workflows. Once you shrink the data, keep it shrunk.”
--“Deduplication is not a feature; it’s a business. The data deduplication market will exceed $3 billion within five years. And I think it will ramp faster on primary storage than it did in the backup market.”
Which sort of leads into the announcement that Ocarina made today. In a strategy similar to Permabit’s, Ocarina announced a software-only, ‘embeddable’ version of its ECOsystem data reduction technology targeted at OEMs. (Ocarina’s existing data reduction technology is delivered as a software-hardware appliance.)
Ocarina may not be a household name, but note that its partners/resellers include, among others, HP, EMC, Hitachi Data Systems and BlueArc, although Ocarina didn’t make any OEM announcements for its embeddable software today. (It takes a long time to qualify and integrate technology like this into a vendor’s existing stack.)
One differentiator that Ocarina may have is a content-aware data reduction technology with a combination of data compression and deduplication. In addition, Ocarina CEO Thirumale says that the OEM version of the company’s technology can be applied anywhere in the IT infrastructure – from primary storage devices to archiving platforms – and on any type of data (e.g., files or blocks), enabling data to remain in compressed/deduped form throughout its lifecycle. In addition, the software can be implemented in a post-process, in-band or hybrid approach.
In other data deduplication news today, GreenBytes announced its entry into the European market with a variety of reseller partnerships. GreenBytes packages its data deduplication software in inline GB-X appliances that combine solid-state disk (SSD) drives and 2.5-inch SATA drives in what the company refers to as a Hybrid Storage Architecture (HSA). GreenBytes’ block-level deduplication can be used in NAS or SAN environments.
First, Permabit announced a software-only version of its data deduplication technology designed for storage hardware and software OEMs (see “Permabit deduplicates primary storage”). If Permabit succeeds in nailing a major OEM deal or two (and the company claims to have at least one in the works) this could be a game changer. For a second opinion on that, see Jeff Boles’ blog post.
Second, the rumors are still swirling around IBM’s alleged negotiations to buy primary storage compression specialist Storwize (see “IBM to acquire Storwize for $140 million?”).
I recently spoke to Murli Thirumale, CEO at Ocarina Networks, which is a Storwize competitor and soon-to-be Permabit competitor. Leading up to a product/strategy announcement that Ocarina made today (see below), Murli offered four predictions on data reduction for primary storage:
--“Every major storage vendor will have primary storage deduplication in their portfolio by 2011, whether by building it or buying it. And by 2012 every major host vendor – including servers and virtualization platforms – will have data reduction built in.”
--“The compression vs. deduplication argument will go away as users realize that you need both. Each technology has advantages/disadvantages for different data types and access patterns.” [Ocarina’s technology combines compression and deduplication.]
--“The industry will eventually have solutions integrated across all tiers of storage, rather than point solutions for different tiers. You shouldn’t have to re-hydrate across tiers or workflows. Once you shrink the data, keep it shrunk.”
--“Deduplication is not a feature; it’s a business. The data deduplication market will exceed $3 billion within five years. And I think it will ramp faster on primary storage than it did in the backup market.”
Which sort of leads into the announcement that Ocarina made today. In a strategy similar to Permabit’s, Ocarina announced a software-only, ‘embeddable’ version of its ECOsystem data reduction technology targeted at OEMs. (Ocarina’s existing data reduction technology is delivered as a software-hardware appliance.)
Ocarina may not be a household name, but note that its partners/resellers include, among others, HP, EMC, Hitachi Data Systems and BlueArc, although Ocarina didn’t make any OEM announcements for its embeddable software today. (It takes a long time to qualify and integrate technology like this into a vendor’s existing stack.)
One differentiator that Ocarina may have is a content-aware data reduction technology with a combination of data compression and deduplication. In addition, Ocarina CEO Thirumale says that the OEM version of the company’s technology can be applied anywhere in the IT infrastructure – from primary storage devices to archiving platforms – and on any type of data (e.g., files or blocks), enabling data to remain in compressed/deduped form throughout its lifecycle. In addition, the software can be implemented in a post-process, in-band or hybrid approach.
In other data deduplication news today, GreenBytes announced its entry into the European market with a variety of reseller partnerships. GreenBytes packages its data deduplication software in inline GB-X appliances that combine solid-state disk (SSD) drives and 2.5-inch SATA drives in what the company refers to as a Hybrid Storage Architecture (HSA). GreenBytes’ block-level deduplication can be used in NAS or SAN environments.
Thursday, April 30, 2009
Welcome to the data dedupalooza
May 1, 2009 – I’ve been looking into data reduction (or capacity optimization) technologies for primary data storage recently, including data de-duplication, compression and others. Of course, compression and de-duplication are well-proven and now common on secondary storage devices such as VTLs and other backup/archiving systems.
However, despite the fact that vendors such as NetApp and Storwize have been selling (or, in the case of NetApp, giving it away for free) data reduction software tuned for primary storage for some time, end-user adoption has been relatively slow.
It looks like that’s about to change.
For one, EMC’s entry into the market with (free) data de-duplication and compression for its Celerra file servers lends legitimacy to data reduction on primary storage devices. See “EMC adds de-dupe, SSDs to NAS.”
Two, NetApp is seeing some real traction in this space. The company claims to have shipped more than 30,000 systems with its ‘NetApp deduplication’ technology. The question is how many of those customers have actually fired up the data de-duplication functionality. The answer is “at least 15,000,” according to Larry Freeman ( aka Dr. Dedupe ), senior marketing manager for storage efficiency at NetApp. And it’s probably a lot more, because the 15,000 are only the ones that NetApp can track via its autosupport feature, which not every customer uses.
Since NetApp can de-dupe across all of its storage platforms (including FAS, V-Series, and VTLs), the next question is: Of those 15,000+ systems that are actually running de-duplication, what percentage are primary systems? That one’s difficult to track, but Freeman estimates that “about 60% of those systems are de-duping at least one primary application.”
Interesting stats, but any way you slice it the entry of EMC, and the success of NetApp, in data reduction for primary storage means that this market is poised for takeoff – despite end users’ lingering concerns about performance and data availability and reliability issues which have, for the most part, been addressed by the vendors.
And a rising tide lifts all boats (maybe), which is good news for the smaller players and startups in this space, including vendors such as greenBytes, Hifn, Storwize and Ocarina Networks (which recently inked about six partnership agreements).
All of the vendors go about data reduction in very different ways, but the end goal is the same: A reduction in primary storage capacity, which results in cost savings and/or purchase deferments, as well as power, cooling and space savings. In this economic climate, who can argue with that?
More on this topic as I delve deeper, but for now . . .
The best article that InfoStor has posted on this subject is “Primary storage optimization moves forward,” by the Taneja Group’s Eric Burgener.
Also check out SNIA’s Data Management Forum’s Data De-duplication and Space Reduction Special Interest Group.
And sign up to attend an upcoming InfoStor Webcast, titled "Leveraging Capacity Optimization to Reduce Datacenter Footprint and Storage Costs," Tuesday, May 12 at 10:00 PST, 1:00 EST. Presenters will include Noemi Greyzdorf, research manager, storage software, at IDC, and Peter Smails, senior vice president of worldwide marketing at Storwize. The Webcast will cover data reduction for all types of data, including primary, nearline and secondary data. To register, click here.
However, despite the fact that vendors such as NetApp and Storwize have been selling (or, in the case of NetApp, giving it away for free) data reduction software tuned for primary storage for some time, end-user adoption has been relatively slow.
It looks like that’s about to change.
For one, EMC’s entry into the market with (free) data de-duplication and compression for its Celerra file servers lends legitimacy to data reduction on primary storage devices. See “EMC adds de-dupe, SSDs to NAS.”
Two, NetApp is seeing some real traction in this space. The company claims to have shipped more than 30,000 systems with its ‘NetApp deduplication’ technology. The question is how many of those customers have actually fired up the data de-duplication functionality. The answer is “at least 15,000,” according to Larry Freeman ( aka Dr. Dedupe ), senior marketing manager for storage efficiency at NetApp. And it’s probably a lot more, because the 15,000 are only the ones that NetApp can track via its autosupport feature, which not every customer uses.
Since NetApp can de-dupe across all of its storage platforms (including FAS, V-Series, and VTLs), the next question is: Of those 15,000+ systems that are actually running de-duplication, what percentage are primary systems? That one’s difficult to track, but Freeman estimates that “about 60% of those systems are de-duping at least one primary application.”
Interesting stats, but any way you slice it the entry of EMC, and the success of NetApp, in data reduction for primary storage means that this market is poised for takeoff – despite end users’ lingering concerns about performance and data availability and reliability issues which have, for the most part, been addressed by the vendors.
And a rising tide lifts all boats (maybe), which is good news for the smaller players and startups in this space, including vendors such as greenBytes, Hifn, Storwize and Ocarina Networks (which recently inked about six partnership agreements).
All of the vendors go about data reduction in very different ways, but the end goal is the same: A reduction in primary storage capacity, which results in cost savings and/or purchase deferments, as well as power, cooling and space savings. In this economic climate, who can argue with that?
More on this topic as I delve deeper, but for now . . .
The best article that InfoStor has posted on this subject is “Primary storage optimization moves forward,” by the Taneja Group’s Eric Burgener.
Also check out SNIA’s Data Management Forum’s Data De-duplication and Space Reduction Special Interest Group.
And sign up to attend an upcoming InfoStor Webcast, titled "Leveraging Capacity Optimization to Reduce Datacenter Footprint and Storage Costs," Tuesday, May 12 at 10:00 PST, 1:00 EST. Presenters will include Noemi Greyzdorf, research manager, storage software, at IDC, and Peter Smails, senior vice president of worldwide marketing at Storwize. The Webcast will cover data reduction for all types of data, including primary, nearline and secondary data. To register, click here.
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