Hewlett-Packard will buy LeftHand Networks for US$360 million to fill in its storage virtualization and iSCSI lines with products for medium-size companies and remote offices and branches.

The Boulder, Colorado, company was an early developer of SANs (storage area networks) built around iSCSI (Internet Small Computer System Interface). It sells software that runs on existing storage and industry-standard server platforms. It was founded in 1999. The purchase agreement, announced Wednesday, is expected to close in HP's fiscal 2009 first quarter, which will end in January.

View slide show of 2008's hottest M&A deals.

SANs and storage virtualization help enterprises centralize their storage capacity and allocate it as needed, potentially cutting costs and energy consumption. LeftHand will help HP extend its virtualization offerings to the midmarket, the companies said in a news release. Among the features of LeftHand's products are data replication for backup and disaster recovery, and an "intelligent cloning technology" that can reduce the amount of required disk space by as much as 97 percent, the companies said.

LeftHand's products already work with many of HP's, including Proliant servers, BladeSystem platforms, ProCurve networks and Insight Control management software.

LeftHand has 215 employees, and its products are distributed by more than 500 resellers and distributors around the world. With about 3,000 customers, its products are installed at more than 11,000 sites, the companies said.

The IDG News Service is a Network World affiliate.