IBM & NetApp
here are rumours flashing around Wall Street that IBM is going to buy Network Appliance. NetApp shares had a second day of gains on Thursday, 12th January, with a heavy volume of trades. Shares were up almost 10 percent in value to $33.42. On Thursday 17.5 million shares changed hands. Normal NetApp trading days see 4.5 million being bought.
IBM and NetApp agreed a strategic partnership last year with IBM re-selling NetApp filers and SAN products. NetApp is capitalised at around $12.5 billion so an acquisition would be quite expensive.
NetApp is great storage company. It has a solid track record of growth, a number two position as a NAS supplier behind EMC, a no. 1 position in iSCSI storage, and a blue chip customer list. It believes in using software to add distinctive value to off-the-shelf hardware and its operating system software, common across its products, is reliable and capable.
NetApp is a quieter company than EMC and less argressive in tone. Whether NetApp CEO Dan Warmenhoeven wants to be bought out is questionable. His company is possibly the largest storage-specific company, EMC having spread its wings into server virtualisation and other server infrastructure matters.
An area of non-leadership is with storage management and multi-vendor virtualisation.
Where is the growth ahead for NetApp? If it can see its future clearly and prosperously as a storage-only supplier then independence looks attractive. But if it sees, as StorageTek did for example, that a link with a server, software and services vendor is a better route to growth then life under big blue's umbrella could be appealing.
For IBM a NetApp purchase would instantly and radically increase its storage product range and strategy credibility. Not that this range is weak, far from it. But it is threatened. HP is recovering and EMC is still aggressively growing. And then there is Dell at the low-end of the market.
So we back-of-the-envelope deal-makers can see the logic. But that doesn't mean it's true.
Hitachi & CAS
Rumour central also suggests that Hitachi Data Systems will enter the content-addressable store or CAS market, the one pioneered by EMC so successfully with Centera. This is based on a new report by Susquehanna Financial Group LLP which predicts the appearance of an HDS CAS product by Easter.
Supporting evidence is cited as HDS being active in widening the definition of XAM, an object storage standard. Apparently EMC wanted an API-led approach for the standard. HDS and others argued that file system interfaces such as NFS and CIFS should be included - and so they were.
HDS could sit back and wait for EMC's competitors in the CAS market to use Hitachi GST disks, but that benefits the greater Hitachi and not HDS. Also Hitachi GST may only get a small proportion of that market.
A HDS CAS product would have the prospect of being OEM'd by Sun. However, set against that, is the point that the CAS market is pretty full of suppliers with EMC having been joined by NetApp's NearStore, the HP RISS product, Archivas, Nexsan, Permabit, and the Sun/StorageTek IntelliStore. The fact of IntelliStore would certainly be an obstacle for Sun to OEM any HDS CAS box.
HDS would need software to do CAS and its expertise is not storage application software such as this. The rumours have HDS oem'ing Archivas CAS SW. We note that Sun's Intellistore has CAS software inside it.
HDS has a reselling relationship with NetApp so it could use NearStore for its CAS box.
The general HDS CAS idea sounds pretty logical. The details are hazy but you need haziness for rumour to spread. But that doesn't mean it isn't true.
HDS to buy NetApp
In another rumour about an acquisition ......no, I'm making this up. Have a good weekend.