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Advanced Digital Information Corporation (ADIC) will acquire Australia's Rocksoft Limited for $63 million in a move aimed at helping companies get a handle on exploding data growth.
Rocksoft's data de-duplication software detects and eliminates redundant data, improving the utilization of disk resources and data transport networks. ADIC said it plans to use the technology to help customers manage, move, retain and protect their data more effectively on different kinds of storage resources.
Data de-duplication is an "emerging technology that promises to play a major role in a broad range of applications for protecting and retaining data, including backup and recovery, long-term archiving, continuous data protection (CDP) and secure retention for compliance," ADIC said in a statement.
The technology also offers potential benefits for applications that benefit from efficient data transmission, such as remote replication and wide-area network optimization. Wide area file services (WAFS), WAN optimization and remote data management and protection have been one of the hottest areas in storage over the last year, with McData the latest to enter the fray this week with OEM agreements with Riverbed and FalconStor.
Arun Taneja, founder and consulting analyst at the Taneja Group, said for a small, OEM-focused company, Rocksoft achieved a high profile "because the topic of compression is hot right now. Diligent, Data Domain and Avamar have good technology, and others are trying to hustle before it becomes a real issue. Hence the move on the part of ADIC. It is a lot of money to pay for a 'feature' company, but like they say, it's all about time and place."
Rocksoft's Blocklets software de-duplication engine can be easily integrated into storage and data transmission products, ADIC said. ADIC plans to integrate the software into its branded products and to offer it to licensees.
"The addition of Rocksoft's expertise and their de-duplication software will allow us to introduce new solutions based on powerful increases in resource efficiency," ADIC CEO Peter van Oppen said in a statement. "For applications that lie outside ADIC's traditional storage markets, we plan to leverage partners and licensees to help the technology reach its full potential."
Rocksoft's technology applies flexible, large-scale de-duplication techniques both within files and across large data sets, finding duplicated elements among many different files and storing them only a single time. The result can be compression gains of 20:1 or more, the company claims. Besides reducing the storage needed for a given data set, the technology also offers efficient data transport over networks by eliminating the need to send repeated elements. For applications that require higher levels of security and compliance, the software engine also offers additional data services such as data integrity checking and encryption.
Rocksoft CEO Jim Johnson said the technology will be combined with ADIC's disk backup and archive solutions for easier and more cost effective disk backup and for consolidating backup and archiving operations between sites.
"It will enable the creation of highly optimized disk-based storage for the archiving applications that ADIC's data management software supports today, and the development of new solutions for long term retention, compliance and remote transmission, including ILM applications," Johnson said.
Analyst Daniel Renouard at R.W. Baird wrote in a research note that Rocksoft's technology is "interesting from a storage management and retrieval perspective; however, it does not fit cleanly into ADIC's core business, and we believe may prove distracting."
"We are not sure how Rocksoft will complement ADIC's core library business," Renouard wrote. "Management will use Rocksoft in current StorNext software and Pathlight VX disk/tape products, as well as introducing a new software product, capable of interfacing with existing disk products from storage OEMs, which some (EMC) may perceive as a competitive product. Ultimately we believe the technology would make more sense in the hands of a disk storage vendor."
ADIC will pay approximately $63 million in cash upon the closing of the transaction. The acquisition is subject to a number of closing conditions, including approval by Rocksoft's shareholders and an Australian court, and is expected to close over the summer. ADIC has agreed to provide a $5 million loan to Rocksoft which may be repaid or converted into Rocksoft shares, and it has obtained the option to acquire a source code and patent license if the transaction does not close under certain conditions. ADIC also has an option from significant shareholders of Rocksoft to directly acquire up to 19.9% of outstanding shares.