Top 10 Storage Acquisitions of 2010 - EnterpriseStorageForum.com

Top 10 Storage Acquisitions of 2010

After the blockbuster HP-3PAR buyout, the storage industry capped a crazy year of M&A activity with the EMC-Isilon and (not yet completed) Dell-Compellent acquisitions. Although any Top 10 list is somewhat arbitrary, here’s our list of the biggest and/or most influential storage acquisitions of 2010.

#10: PMC-SIERRA – ADAPTEC

Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing. PMC-Sierra acquired Adaptec in mid-2010 for a mere $34 million.

In addition to Adaptec’s technology and products, PMC gained access to Adaptec’s extensive channel partners.

PMC-Sierra’s acquisition of Adaptec puts the company in even more intense competition with arch rival LSI. Now PMC competes in the channel with LSI at the board level, whereas previously the battle was fought primarily on the semiconductor front.

Related articles:

PMC-Sierra to buy Adaptec’s channel storage business (on partner site InfoStor)

PMC-Sierra ships 6Gbps SAS controllers (InfoStor)

#9: NETAPP – BYCAST

The financial terms of the NetApp-Bycast deal were not disclosed. According to InfoStor’s original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically-dispersed locations into a single pool for storing fixed content data.”

NetApp plans to leverage Bycast technology, including its StorageGRID virtualization software, in markets such as digital media, Web 2.0, healthcare, and cloud services.

Related article: “NetApp to acquire Bycast for cloud storage software” (InfoStor)

#8: EMULEX – SERVERENGINES

Prior to acquiring the company, Emulex was licensing critical technology -- including 10GbE ASICs -- from ServerEngines. Acquiring its supplier was key to Emulex’s 10GbE strategy, and the company paid a high price (which could exceed $200 million, depending on a number of factors).

Emulex is now going head-to-head with Ethernet giants Broadcom and Intel, as well as long-time rival QLogic and others.

The acquisition seems to have paid off. Emulex has racked up a number of OEM design wins with Tier-1 vendors for its 10GbE/FCoE/iSCSI adapters, including Dell, EMC, HDS, HP, IBM and NetApp.

ServerEngines was founded in 2004 by former Broadcom engineers who were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.

See “Emulex to acquire ServerEngines” (InfoStor)

#7: DELL – OCARINA

Dell’s acquisition of Ocarina, rumored to be in the $150 million ballpark, came as a surprise and (along with #6, see below) confirmed that capacity optimization (data deduplication and/or compression) of primary storage could be one of the top storage technologies in 2011.

Dell now has its own capacity optimization technology, as well as existing reseller deals with CommVault, EMC (Data Domain) and Symantec.

Related blog post: “Dell to acquire Ocarina for data deduplication” (InfoStor)

And in a related Top 10 acquisition . . .

#6: IBM – STORWIZE

IBM’s acquisition of Storwize had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in a top spot among hot storage technologies.

Rumors put IBM-Storwize deal in the range of $140 million.

Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.

The Storwize product line is now part of the IBM Real-time Compression business unit.

See “IBM to Buy Storwize for Real-Time Data Compression” (Enterprise Storage Forum)

#5: VISION SOLUTIONS – DOUBLE-TAKE

This one ranked high on the surprise factor and it also ranked high in dollars, being valued at $242 million, or about $10.55 per Double-Take share. (Double-Take went public in 2006 at about $11 a share.)

Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, with vendors such as Dell and HP considered potential acquirers.

Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.

See “Vision Solutions to acquire Double-Take” (InfoStor)

#4: EMC – GREENPLUM

The financial terms of EMC’s acquisition of Greenplum were not disclosed. Greenplum specializes in data warehouses and analytics, and claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.

In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing.

Greenplum became the foundation of a new division within EMC’s Information Infrastructure business.

See “EMC acquires data warehousing vendor Greenplum” (InfoStor)

#3: DELL – COMPELLENT

Dell’s acquisition of Compellent has not been officially finalized yet. The latest offer is $27.75 per share, which translates into about $960 million, or $820 million net of Compellent’s cash.

It will be interesting to see how Dell positions Compellent’s disk arrays relative to its EqualLogic product line (which grew 66% in revenues over the last year), but it will be even more interesting to see what happens to Dell’s EMC reseller agreement.

#2: EMC – ISILON

EMC shelled out around $2.25 billion for scale-out NAS vendor Isilon Systems, net of Isilon’s existing cash balance. That’s an eye-popping amount of cash, particularly considering that Isilon was barely profitable. However, market researcher IDC predicts that the scale-out NAS market will grow on average about 36% annually over the next four years, reaching an estimated $6 billion in 2014.

According to EMC’s press release on the announcement: “EMC’s Atmos and Isilon’s solutions will offer customers a highly scalable, low-cost storage infrastructure for managing ‘Big Data’ . . . EMC Atmos object storage provides the perfect complement to Isilon for massive globally distributed environments and object access to data for usages like Web 2.0 applications.”

EMC officials estimated that the combined revenue from the Isilon and Atmos platforms will hit a $1 billion run rate during the second half of 2012. EMC also emphasized synergies between Isilon’s clustered scale-out NAS platforms and systems/software from Greenplum.

See “EMC snaps up Isilon for $2.25 billion”

Isilon wasn’t EMC’s only acquisition this year. The company bought Bus-Tech about a week prior to the Isilon announcement. Bus-Tech specializes in VTL technology for mainframe environments. The financial terms of the Bus-Tech acquisition were not disclosed.

#1: HP – 3PAR

By virtue of its price ($2.4 billion) and the drama of the bidding war with Dell (which started at $1.15 billion), HP’s acquisition of 3PAR was clearly the #1 storage acquisition of 2010.

The acquisition of 3PAR puts HP in a much better competitive position, but it will be interesting to see what happens to the rest of HP’s disk array lineup, particularly the venerable EVA line. Months after the acquisition was announced, we still have more questions than answers on this acquisition.

2010 wasn’t a record-setting year in terms of the number of storage acquisitions, but it certainly was a record setter in terms of the amount of money that was shelled out.

As we enter 2011, the big question is: Who will be acquired next? According to the financial analyst community, CommVault is the most likely storage vendor to be acquired, but other possibilities cited by analysts include Brocade, BlueArc, FalconStor, NetApp and Xiotech.

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