Tag: Data Domain

The year of the privately held storage supplier?

Contact: Simon Robinson

The storage M&A market is expected to favor smaller private providers this year, as recent activity has reduced the number of available midsize public targets. Indeed, in the past 24 months, Data Domain, 3PAR, Isilon Systems and Compellent have all been taken off the market. And buyout speculation caused by this recent spate of activity has bloated valuations at remaining public firms, such as CommVault, making them less likely to be acquired next.

But while recent public storage acquisitions may have halted the sales of their public peers, they may have actually benefited private suppliers. For example, EMC’s reach for Isilon highlighted the growing requirement for high-scale storage systems in markets where the exponential growth of highly rich – or ‘big’ – data is a key pressing challenge. Indeed, that deal could be important in refocusing attention on the remaining privately held players.

We took a look at several of the remaining private targets in a recent Sector IQ and noticed that would-be buyers still have several options to choose from. Though the IPO window has been closed for a couple of years, there are many attractive storage specialists that are fairly mature on both the product and go-to-market fronts, and a closer examination reveals a number of storage system specialists that were formed in the late 1990s that are still making headway today. Click here for our full report on potential targets in the storage sector.

Storage sector M&A holding steady

Ben Kolada

Contact: Ben Kolada, Henry Baltazar

In its eighth storage play, IBM announced last week that it is acquiring data compression vendor Storwize. The move, which came quickly on the heels of Dell’s purchase of data de-duplication provider Ocarina Networks, brings the number of storage deals we’ve tallied in 2010 to 19. That’s roughly on par with the volume of storage transactions in the same period last year.

Of course, deal flow in the sector last year was dominated by a bidding war over Data Domain, which sold to EMC for $2.3bn after NetApp put the data de-dupe specialist in play but then got topped. We would note that EMC – the most active acquirer in the storage industry, having picked up some 15 storage companies over the past eight years – has been out of the storage market since it bought Data Domain. However, the storage giant may figure into the industry’s most recent deal. What do we mean?

Big Blue’s purchase of Storwize appears to be a reaction to EMC’s announcement in May that it was adding compression to its midrange Clariion and Celerra platforms. (The Storwize deal was first rumored in June, just after EMC’s announcement.) Storwize is unique in the storage space because it offers real-time data compression of up to 80%. Further, my colleague Henry Baltazar claims that IBM has already been working with Storwize for about a year. Storwize’s appliances run on System x servers, which Big Blue points out should ease the integration process – and help it to match the competitive moves by rival EMC.