Network Appliance has bought Onaro, the supplier of SANscreen storage service management software.
Onaro is privately-held and backed by three venture capital companies. It was started up in 2002, has about 60 employees and has received $9.5 million in funding. The company is based in Boston, USA, and has offices in London and elsewhere. It also intended to open a Tel Aviv-based R&D centre early last year. The company has been profitable since 2006.
Onaro's products are used by almost a third of the Fortune 50 companies. A partial customer list includes AOL, CareGroup Healthcare System, JetBlue Airways, Priority Healthcare, State Street Global Advisors, and Wyeth Pharmaceuticals. One user, United Airlines, uses SANscreen with Hitachi Data Systems storage and gets the storage assets sweating more because of it.
SANscreen focused on cross-vendor SAN infrastructure change management and has added an application focus with storage seen as a service for applications and not just as a bunch of networked boxes in the data centre. A SAN's network paths, director and switch resources, disk arrays and capacities are all monitored by the product and grouped by application. Predictive modelling can be carried out to see how resource use changes over time.
An application-centric view of performance, availability, and change management results in better levels of service for each application on a storage network, making consolidation and migration projects easier to plan for and manage.
In March last year Gartner placed both NetApp and Onaro in the visionaries' segment of its Magic Quadrant for storage resource management. NetApp may be hoping to move the now combined entry into the leaders' quadrant where IBM and EMC are placed.
Onaro has also recently added support for NAS environments and VMware ones. Both of these are obviously highly important to NetApp. The VM Insight module can track all the way from applications in virtual machines right through a storage infrastructure to individual drives. NAS Insight Manager was added in December, 2007.
Recently HP bought Opsware for its datacentre automation capabilities as a way of helping customers cope with the increasing complexity and cost of managing the datacentre.
NetApp's SANscreen acquisition will help it supply datacentre storage service management to its own customers as well as continuing the sale of Onaro products to non-NetApp customers. NetApp also sees it as a way of strengthening the appeal of its products versus ones such as Symmetrix from EMC. Its release stated that customers 'will need to rely on monolithic legacy systems that are expensive and cumbersome in today's era of rapid datacentre evolution.'
Onaro will probably be treated in a similar way to Decru and become a NetApp business unit rather than being absorbed totally into NetApp. This means that it will still, NetApp no doubt hopes, maintain its existing OEM, distribution and reseller-type agreements. Onaro needs good relationships with other vendors because it interrogates their storage products to gain information for SANscreen.
Over time Onaro technology may well find its way into Data ONTAP, NetApp's storage array operating system. Links with NetApp's replication products will also probably be strengthened.
Ironically, coming soon after IBM bought Israeli-based XIV, the founders of Onaro are both ex-Israeli defence forces people and NetApp is buying, in effect, Israeli-developed storage technology just like IBM.
No financial information about the acquisition was released but we might reasonably assume that the venture capitalists have crystallised their near $10 million investment and made a good return, say a minimum of $20 million and possibly as much as $120 million according to an Israeli report.
Most Onaro employees are expected to join NetApp although the company's executive management ranks may be thinned by people cashing in stock options and leaving for fresh start-up activities.
We should see the Onaro acquisition as helping to bolster NetApp's enterprise SAN credentials and helping it compete better with EMC and HP for enterprise storage customers. Existing Onaro customers may look at the acquisition with mixed feelings if they aren't existing NetApp customers also. They will be reassured, hopefully, by NetApp's intention to run Onaro as a near-autonomous division.
Potential NetApp SAN customers will be encourage by the much improved SAN management facilities that NetApp can now bring to the table. NetApp should also be able to develop Onaro's NAS and iSCSI capabilities and profit from them.
This does not look as dramatic an acquisition as IBM's of XIV or EMC's of VMware. But, like Decru and Topio (replication) it gives NetApp new capabilities that it needs. As long as it continues to grow revenues at 20 percent plus per year, its strategy is working.
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