Network Appliance made a big move today to boost its storage management and automation capabilities with the acquisition of Onaro.
Onaro began as a change management startup and has evolved to become a big player in the emerging data center and storage automation space (see Storage and Data Center Automation Begin to Converge). Its most recent move was to add support for NAS and VMware (see Onaro Puts Storage at VMs' Service).
NetApp isn't saying what it paid for Onaro, but StorageIO Group founder and senior analyst Greg Schulz speculated that it could be in the neighborhood of the $300 million to $350 million IBM reportedly paid for XIV earlier this week, "given their proven customer installed revenue base."
Onaro raised $9.5 million in venture funding and has been profitable since 2006. It boasts more than 100 customers, including a third of the Fortune 50.
"It's a great move for NetApp," said Schulz. "The gem with Onaro is its underlying cross-technology domain event analysis correlation engine to isolate and report on infrastructure resource usage and configuration and performance similar to what EMC has with Smarts and their Backup Advisor. ... If you are looking to automate and enhance infrastructure resource management across servers, storage, networks and applications, particularly for virtual environments, you need to be looking at tools and technologies like these from the perspective of what they can do now as well as moving forward."
Enterprise Strategy Group analyst Bob Laliberte said the move is a good one for customers of NetApp's fast-growing software business. "Customers should be comforted to see them picking up a company that has a heterogeneous software solution and not a NetApp-specific solution," he said. "This should also be a nice complement to the Symantec SRM software they resell," which is also heterogeneous.
NetApp's initial focus seems more on change management than on data center automation, which Laliberte said makes sense. "I believe their focus on change management is due to the fact that it solves a real problem today," he said. "As data center environments get more complex, especially with mixed SAN and NAS environments, and demands for higher service levels are made by the business, the IT staff struggles just to maintain those levels based on the amount of daily change. Onaro solves that problem today, for customers that have not only NetApp environments but heterogeneous SAN and NAS, with a single tool. This also extends to providing support for VMware environments."
"In the longer term, I believe Onaro technology will be better positioned to extend their automation ambitions as part of NetApp's integrated data management vision than on their own," Laliberte said.
Tom Georgens, NetApp's executive vice president for product operations, said in a statement that 80 percent of all IT operational issues such as application outages, performance problems and downtime result from unanticipated changes.
"Customers tell us they are being asked to commit to almost impossible levels of service to avoid these problems, which drain precious resources," he said. "They are looking to us for a solution to obtain a better view and gain more control over their storage systems, not just as physical devices but as a set of services. With the addition of Onaro, our ability to provide the underlying modular storage architecture as well as policy-based storage management software will help enterprises commit to escalating service levels required by their business."
The deal benefits both companies by strengthening NetApp's Fibre Channel SAN offerings and boosting Onaro's Ethernet-based storage presence.
Jay Kidd, NetApp's chief marketing officer, said the addition of Onaro will also improve the heterogeneous data management capabilities of NetApp's Decru, VTL, V-Series, VFM and ReplicatorX solutions by adding delivery and management of storage services.
Service-centric management is another benefit of the deal, said Kidd, as is the ability to offer change management, efficient storage utilization and planning for VMware environments.
The acquisition is expected to close in the first quarter.