Storage mergers and acquisitions (M&A) continued at a clip
through 2006, from run-of-the-mill market consolidation deals, to
technology additions, to completely orthogonal purchases that left
many industry analysts scratching their heads.
Quality, not quantity, is what counts on this list. We're less
interested in the size of the deal, or how many companies a vendor
has acquired. We're more interested in how vendors chose to spend
their M&A dollars and what this indicates for product
development and market trends. Some of the best acquisitions of the
year were software purchases in which a traditional storage player
added important new functionality to an existing product line.
No. 1 -- Software, software and more software
Startups selling heterogeneous replication and continuous data
protection (CDP) software cleaned up this year. As standalone
technologies, these products pulled in plenty of punters, but the
consensus among them has been that these functions need to be
integrated into existing backup and replication products. The
acquirers below are hard at work on this integration process.
EMC adds Kashya to InVista
NetApp to acquire Topio
CA acquires XOsoft, adds replication to
ARCserve
Symantec quietly snaps up Revivio's
assets
No. 2 -- ISCSI rockets ahead
Microsoft's acquisition of String Bean Software Inc. in March
was an important trigger for iSCSI adoption. It provided the
company with iSCSI target software that turns a Windows file server
into an iSCSI storage device. It lets OEMs build systems that
support file and block storage while providing snapshots through
Volume Shadow Copy Service (VSS). Hewlett-Packard Co. (HP) and Dell
Inc. are selling systems based on this software and analysts expect
these products to win the small to medium business market.
ISCSI competition heats up
No. 3 -- SAN switching market consolidates
Settling years of speculation, Brocade Communications Systems
Inc. finally acquired McData Corp. in August in an all stock deal
valued at $713 million. The move brought together two longstanding
rivals in a bid to compete more effectively with a bigger rival --
Cisco Systems Inc. The product integration details have still yet
to be made official, but Brocade has been assuring users since the
merger that none of the key McData products, namely its director
switches, will be killed off any time soon. A "converged platform"
around 10 GB technology is expected sometime in 2008, but Brocade
has been thin on details about this.
Brocade made another bold move in March, buying file
virtualization player, NuView Inc., adding to the company's
steadily growing software business. Analysts have said Brocade's
bid to diversify is a wise one, given Cisco's claws into the
market, but its success will depend on its ability to build up new
channels outside of its existing OEM partners.
Since these deals went down, Brocade's stock has steadily risen
from $5.14 to a high of $8.98 at the end of November.
Brocade acquires McData, stands up to
Cisco
Users cautious about Brocade-McData
merger
Brocade spreads its wings, acquires
NuView
No. 4 -- Virtualization gets some action, finally
Acquisitions by QLogic Corp. and LSI Logic Corp. of
virtualization "plug-ins" from Troika Networks Inc. (a chip) and
StoreAge Networking Technologies (software that runs on a switch),
as well as QLogic's acquisition of InfiniBand maker PathScale,
could bode well for network-based storage virtualization that
doesn't take a director-class switch to implement.
Analysts said at the time of the deals that the QLogic pickups
point to products that can move data really fast while also
applying intelligence to that data in the form of virtualization.
LSI and StoreAge, meanwhile, could combine to "pool" Engenio
Information Technology Inc.'s midrange arrays.
QLogic buys Troika
QLogic buys PathScale
LSI Logic buys StoreAge Technologies
No. 5 -- Security grabs headlines
Symantec Corp. and Veritas (as well as NetApp and Decru Inc.)
are saying, "I told you so!" EMC Corp. became the next big company
to jump on the storage / security bandwagon as vendors everywhere
revved their marketing engines to emphasize the importance of
securing data.
EMC raised a stir among industry watchers (to say nothing of
shareholders) when it shelled out $2.1 billion for security-token
maker RSA Security Inc.. Even those who could see wisdom in the
acquisition largely agreed that EMC had overpaid; those who didn't
agree with the acquisition considered it a potential disaster.
Meanwhile, EMC still hasn't filled in some integration gaps between
other companies it acquired years ago -- Legato and Documentum, for
example, though that has begun to change this year as well.
Skeptics are wondering if EMC bit off more than it could chew.
But in the end, among the vendors at least, the consolidation of
security and storage continues. Xiotech Corp.'s drop off the radar
in late 2006, resurfacing as a compliance company after the
acquisition of e-discovery software maker Daticon in January shows
that consolidation could float some ailing ships, as regulations
continue to tighten and federal data security statutes are just
around the corner…
EMC to buy RSA Security for $2.1B
Xiotech buys Daticon
No. 6 – Archiving a problem
Backups are not archives -- this much the industry has agreed on
over the last year and a half. But what are archives? How are they
best implemented? Should the focus be on controlling the growth of
data associated with certain applications, such as Exchange, or on
legal discovery and compliance? What about file systems and
databases other than email servers?
HP's acquisition of database archiver OuterBay was the most
interesting in this category. OuterBay pares down relational
databases while keeping the "relational" part intact through data
stubs and stores the data in an XML "wrapper" so it can be accessed
later, even if the original database application is no longer
available. These are two factors that go a long way toward solving
some of the issues with database archiving, as well as long-term
retention of data.
Iron Mountain Inc., meanwhile, has been busy branching out from
its traditional tape-handling business and adding online disaster
recovery, and archiving startup LiveVault was a big step into the
e-discovery, replication and disk-based storage market.
Finally, Zantaz Inc.'s acquisition of Singlecast adds not only
search and indexing functions to its email archive repositories but
also allows for the archiving system to take action on emails that
might be inappropriate or subject to e-discovery. This is similar
to a spam filter -- a further layer of automation for users with
enough on their plate to manage as it is.
HP buys OuterBay
Iron Mountain buys LiveVault
Zantaz buys Singlecast
No. 7 -- Tape and disk drive makers consolidate
The big guys may be on to something when it comes to
differentiating themselves through software, or it could just be a
self-fulfilling prophecy. Either way, hardware was very clearly out
of style in 2006 as tape makers Quantum Corp., Advanced Digital
Information Corp. (ADIC), Tandberg Data and Exabyte Corp., as well
as disk drive makers Seagate Technology and Maxtor Corp., banded
together for survival.
Quantum buys ADIC
Seagate buys Maxtor
Tandberg buys Exabyte
No. 8 -- SATA explodes
Emulex Corp. acquired ASIC and firmware components maker Sierra
Logic Inc. for $180 million in cash, and assumed debt and stock in
late August.
Sierra Logic's embedded bridges and routers enable integration
of low-cost SATA disk drives into Fibre Channel (FC) systems.
Sierra Logic OEMs include Engenio Information Technologies Inc.,
Hitachi LTD, NetApp., NEC Corp., Sun Microsystems Inc. and Xyratex
-- its market share in FC-SATA bridging is estimated at 85%.
Meanwhile, Emulex had been spearheading an effort to create a
direct FC-SATA protocol through the T11 standards committee, but
the acquisition suggested that either that effort wasn't going so
well, or that SATA was heating up so much that Emulex felt the need
to jump more aggressively into the market.
Emulex buys Sierra Logic
No. 9 -- WAFS take off
The remote and branch office became a major concern this year as
data growth continued everywhere. Many organizations began to
consolidate data storage both within the data center, as well as
geographically and helping them serve files from a central location
were some of this year's big winners in storage in the form of the
WAFS companies. Networking vendor Packeteer snapped up Tacit
Networks Inc. to add the capability to its product portfolio, and
while it wasn't exactly an acquisition, Riverbed Technology Inc.'s
initial public offering (IPO) was another seal of confidence on the
market as a whole.
Packeteer buys Tacit
Users mull over Brocade's WAFS options
Riverbed IPO
No. 10 -- EMC's other deals
The most interesting storage acquisition EMC made this year was
probably Avamar Technologies, which adds deduplication to backup
software and became the first dedupe IP to be folded into products
from a major storage vendor.
Other EMC deals included: Internosis, Interlink , Authentica,
NearTek, ProActivity Inc., nLayers LTD, all of which represented
further steps in EMC's attempt to transition itself into a software
company.
EMC drops $165M on dedupe firm Avamar
EMC acquires Microsoft services firm
Internosis
EMC snaps up another Microsoft partner,
Interlink
EMC acquires ProActivity
EMC acquires nLayers
EMC's Meaning of Life?