When I wrote my bit around "Desperate Times In Storage Land?" I had no idea we'd see so many strategic transactions from storage vendors.
So, what's up?
What I Said At The Time
I basically had two theses about the storage market back in early Sept 2007.
First, the server vendors weren't taking storage seriously, and that was hurting them. I guess Dell and IBM agreed with my sentiments, HP is mum so far, and Sun ... well, Sun ... never mind.
Second, our favorite "pure play" vendor (other than EMC!) NetApp was stuck in a squeeze play with folks like EMC coming down from above, and smaller, more nimble vendors from below.
And today, NetApp acquires Onaro
To Be Honest, I"m Conflicted
Taking off my EMC fanboy hat for just a moment, I have to say I'm conflicted.
Despite my past NetApp bashing over certain marketing practices I find abhorent, I respect them as a company and as a competitor. They deliver decent products, have loyal customers, etc. They're a legit player in the Storage League, and good competition is good for customers and good for the marketplace.
Onaro carved out a nice niche around SAN configuration management. A few EMC customers with high-end SANs really liked what they did, and how they did it. They'd use Onaro for what it did well, and things like EMC's ControlCenter for what it did well. Again, a company to respect for what they did.
[not that EMC is entirely asleep at the wheel, our ControlCenter group saw what Onaro had done, and added many of the same features to ControlCenter, so I'd offer that the gap is less than it's been in the past]
So, part of me likes it when two good companies connect.
But is it a good fit?
I don't think so, and here's why.
Big SAN, Meet Little SAN
Onaro's strengths are in large, mission-critical FC SANs. The bigger and the more important your SAN, the more you're likely to consider something like Onaro to handle config management and related tasks.
Now, I don't know about you, but the phrase "large, mission-critical FC SAN using NetApp" is a bit of an oxymoron for me. Sure, they sell a decent amount of FC protocol to their customers, but they tend to be smaller, and certainly not mission critical.
And, to the best of my knowledge, Onaro has little to offer in iSCSI management. If you look at the broader category of SRM (storage resource management), it's pretty obvious that Onaro (now NetApp) has a long ways to go before they could be considered seriously as a top-tier SRM player.
Simply put: Onaro's products aren't targeted at NetApp's classic customers, and NetApp's products aren't targeted at Onaro's classic customers. I'd rate the strategic alignment part of this as "poor".
One aspect might have made this more appealing to NetApp: Onaro has figured out how to support VMware well with their SAN config management tools, no easy trick. And, of course, anything with any sort of VMware affinity these days is incredibly appealing.
And The Track Record Is Not Pretty
Spinnaker. Topio. Decru. Maybe a few more NetApp acquisitions I forgot about. None of them really worked out as anyone thought. I won't go into the gory details, but I don't see NetApp as successful as they'd like to be with their past acquisitions.
Buying great companies is only half the battle. Finding strategic alignment, well, that's the really fun part of the M+A game.
Back To The Thesis
OK, I admit it, I feel a bit vindicated about the original post. Some of the commentary at the time was, well, a bit negative. Not that it bothers me, I'm not trying to win a popularity contest here ... ;-)
So, given what we've seen so far, what else might we see in the near future?
HP has to say or do something to remain relevant. I'm sure they're saying a lot to their loyal base of customers and resellers, but very little to the marketplace and the world at large. And, yes, they've got some serious gaps in their portfolio that will hurt them in the near future.
Sun, well, I guess Sun could make some sort of move or another. There's lots of small storage-related companies left to be snapped up, some of them pretty good. The real problem, though, is Sun, not the availability of interesting companies to buy.
The wild card for me is the "other" pure storage player out there, namely HDS. They've done OK with the USP (aka Tagma) at the high end, but that's just one category of many, many segment they need to play in. I'd expect some sort of move from them in the near future.
Storage Is Becoming A "Must Win" Game In The Industry
Guess what? IT is becoming more about information, less about technology. If a customer trusts you to store their information, they'll probably trust you for other things as well.
If you're a server vendor, you've been commoditized in spades. VMware is hyper-accelerating the process of server commoditization, as are trends like cloud computing. If you make your living selling x64 chips in nice racks, you've got to do something different in the near future, don't you?
And if you're a "pure play" storage vendor, not only do you have to cover a wide range of storage segments and niches horizontally, you've got to start adding value above the stack with management, ILM, archiving, backup, etc. Not easy to do.
So, yes, it's still desperate times in storage land. And the gap between the winners and losers is causing all sorts of M+A activity.
Who said this was a boring industry?