‘Twas the season to acquire

Last year about this time, I realized we had arrived at the collision of two aspects of importance to the high-tech community: the holiday season, and yet another invasion of Ferengi business practices. One year later the earth continues to move in its orbit, it’s once again the holiday season for many people and… the phenomenon repeats itself. Thus …

‘Tis the season to acquire,

Fa-la-la-la-la, la la la la!

“M and A” budgets don’t expire,

Fa-la-la-la-la, la la la la!

Buy before valuation increases,

Fa-la-la-la-la, la la la la!

Technology comes in bite-sized pieces!

Fa-la-la-la-la, la la la LAAA …

I admit this barely scans, but the Ferengi have been out in force this season and really, these days you can’t tell the players without a scorecard – and a recently updated one at that. So it’s time to look at the latest round of industry restructuring. Besides, where else but here – at the industry’s nexus of technology and aesthetics – can you come away with the sure-to-be-therapeutic feeling that maybe your own poetry might not be so bad after all?

In 2005, the big deals were HP acquiring AppIQ, EMC buying Rainfinity, Sun buying StorageTek, Symantec buying Veritas, CA buying iLumin, and Iron Mountain’s purchase of LiveVault. In 2006 we saw the trend continue.

The big deal in switching has been Brocade’s purchase of McDATA. The process was announced in August, is due to close in the first quarter of the New Year, and reduces the number of major switch players to two. Expect Brocade to have a much stronger market position vis-a-vis Cisco but, as I mentioned when I first wrote about this, we’ll have to wait and see whether it will be strong enough. I still expect this to open up opportunities for QLogic, as viable markets (and surely, switching is one of those) rarely tolerate just two players.

When you talk about the big vendors, CDP has been a lot like the weather – everybody talks about it but most of them don’t do too much about it. Some do (IBM), some partner with a provider (HP, with Mendocino), and others just go out and buy. In 2006, we saw EMC buy Kashya, CA purchase XOsoft (a product you can download off the net), and just recently, Symantec bought Revivio. All were purchased to fill “holes” in the company’s storage lineups. Expect each of these purchased technologies to be merged into their new parent’s product lines, eventually becoming more-or-less integrated aspects of a larger product offering rather than stand-alone products.

Quantum bought not-really-a-rival ADIC (got-to-market approach and product sets were quite different), gaining that company’s direct sales markets to go along with Quantum’s own wide-spread channel relationships. A hidden gem in this deal may be several pieces of ADIC software – including a 64-bit file system (targeted at rich media environments) – and ADIC’s partnerships with both EMC and HP. Quantum’s stock price has taken a hit since the acquisition, but it still looks like a synergistic deal to me.

Not a believer in tape? Many folks aren’t, so they send tape over the wire to remote sites for archiving. In 2005, Iron Mountain bought LiveVault to give them this capability. Recently, Seagate got into the game, buying eVault for the same reason. Seagate has the wherewithal to make a big splash in this category, and may almost single-handedly resurrect the idea of the storage service provider, albeit in a new incarnation offering high-value services and not just plain storage.

WAN optimization and long-distance replication saw consolidation as well. Packeteer bought Tacit Networks last May, an indication that, at last, the industry is taking seriously the issue of protecting data in remote offices. Network Appliance’s acquisition of Topio brings that company the ability to do remote replication across heterogeneous platforms, and brings them into further balance with EMC’s Rainfinity NAS management capability.

And so it went in 2006.

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The issue of storage consolidation will be a big deal in 2007. Is your company looking into this? Is it a hot topic?

If so, I’d like to know what you think the biggest issues are going to be for your site. Are you concerned about “vendor lock-in”? Do you expect to save equipment costs by doing this? Are you hoping for a simpler infrastructure and lower OPEX? Please send me a quick note listing your feelings on this topic to mkarp@emausa.com.