Sun is buying all the intellectual property rights to the NAS technology it uses in its StorEdge 5000 NAS products. Currently it licenses it from Procom Technology. Sun will pay Procom about $50 million for the rights. Why? It wants to make and develop its NAS products more cheaply and sell them at lower prices.
Jonathan Schwartz, Sun's president and COO, said: "Sun is uniquely positioned to leverage Procom's technology to drive down the cost of NAS appliances for customers, while aiming to drive margin opportunities for Sun." In other words Sun reckons it will make well in excess of $50 million additional NAS revenue by owning the NAS technology it currently resells.
Sun foresees a booming NAS market. Mark Canepa, VP of network storage at Sun, hinted at one aspect of this: "Sun's NAS offerings serve as the central building blocks of some of our most compelling solutions, including the Sun StorEdge 5310 Compliance Archiving System which helps customers comply with government regulations and data integrity requirements."
With the agreed purchase Sun will own its own NAS IP rights and gain additional engineering expertise, enabling it to build future NAS and next-generation file-based storage systems much faster and more cost-effectively.
Subject to the usual closing conditions, the acquisition is expected to close in just over a year, in June 2005.
The NAS market is seeing booming product moves, with HDS' NAS blade for its TagmaStore and NAS program, IBM's decision to resell NetApp's NAS line, an expected EMC NAS product, and HP'S NAS Cluster Gateway.
The expectation is that NAS will become a standard storage facility in most enterprises, alongside SANs. No serious storage product provider can have a NAS hole in its product range and needs to be able to own and develop its NAS technology. With wide area file systems promising to become mainstream it makes sense for Sun to be able to develop NAS-based technology quickly and in the direction it wants rather than wait for Procom to do it.