Acquisitions ripple through storage industry

Posted on October 01, 2001

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BY HEIDI BIGGAR and LISA COLEMAN

Against the backdrop of Hewlett-Packard's potential acquisition of Compaq, a number of comparatively small mergers and acquisitions in the storage industry were announced over the last few weeks. Among the more notable were McData and SANavigator, Precise Software Solutions and W. Quinn, and Exabyte and Ecrix.

Fibre Channel director vendor McData plans to acquire SAN avigator, the storage area network (SAN) management software subsidiary of Western Digital. "[The transaction] accelerates our time to market...and gives us the ability to provide...management for multi-vendor fabric environments," says Jack Mc Donnell, CEO of McData.

This summer, the company announced its SAN management software strategy with the launch of Enterprise Solutions Archi tecture (ESA), a framework designed to simplify the design, installation, and management of storage networks (see "McData breaks into storage network management," InfoStor, September 2001, p. 8).


Jack McDonnell
McData
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SANavigator's SAN management software will be positioned at the high end of ESA, explains McDonnell. "It will sit on top of our management console-Enterprise Fabric Connectivity Manager (EFCM)-and above Enterprise Operating System (EOS)." Unlike EFCM, which is limited to McData hardware, SANavigator supports heterogeneous devices.

"Managing SANs is necessary, but the tools available today are still pretty basic, mainly because the device vendors only support some subset of the fields defined in the FibreAlliance MIB," explains Carolyn DiCenzo, chief analyst for storage management software and SAN appliances at Gartner Dataquest. The SNMP-based FibreAlliance Management Information Base (MIB) is a group of parameters that defines and describes the status of a network of components, providing a common method for managing heterogeneous devices in a SAN. DiCenzo says that improved manageability at the SAN, or fabric, level hinges on broader API support among device vendors.

"McData is working on its API and that work can benefit from a close working relationship with SANavigator," continues DiCenzo. "In addition [new releases of SANavigator software] would take McData device management to a higher level." McData is expected to tune a version of SANavigator to the specific requirements of its own hardware products.

SANavigator will be operated as a wholly owned subsidiary of McData and will continue to operate in San Jose, CA. SANavigator software will be available from SANavigator and through McData channels. The acquisition was valued at $29.75 million.

Precise acquires W. Quinn

The software management market witnessed another acquisition recently as Precise Software Solutions scooped up Windows-focused storage resource management (SRM) vendor W. Quinn Associates for $35 million.

Precise, a Westwood, MA-based software company specializing in products for application performance management, acquired W. Quinn to further expand into the storage market. W. Quinn also has a relationship with Microsoft, which uses portions of W. Quinn's SRM code in its server appliance kit.

Earlier this year, Sun Microsystems acquired Windows-based SRM vendor HighGround Systems for $400 million.

"We were already expanding into the storage space," says Andrew Bird, executive vice president of marketing at Precise, "and this acquisition gives us the ability to accelerate a number of our technologies in that area." Bird also emphasizes that W. Quinn's relationship with Microsoft will allow Precise to more rapidly develop products in Windows NT/2000 environments.

Last year, Precise went public and set growth goals that include acquisitions. Precise expects this merger to leverage the reseller and OEM channels of both organizations as well as expand its partnership base. The company currently has alliances with EMC, Cisco, Hewlett-Packard, Exodus, and others. Both EMC and HP license Precise technology for their storage products.

Most recently, Precise developed software for the HP Surestore XP disk arrays. The Precise/Crosspoint product links to HP's XP disk array via the HP Performance Advisor XP software to map physical device confirmation with logical performance metrics gathered by Precise/SQL from the application, database, and operating system.

Precise also delivers a suite of performance management software modules that poll database metrics directly. It correlates database and operating system activity with enterprise resource planning (ERP) application performance to locate bottlenecks in databases or operating systems.

W. Quinn will operate as a division of Precise for the immediate future, according to Bird. Joint research and development efforts will aim to blend the two companies' products together as soon as possible.

SRM focuses on reducing the complexity of storage management. Typically, SRM is responsible for managing storage assets, which comprise data that is both tangible (physical assets such as disk systems, tape libraries, and SAN communications gear) and intangible (logical volumes, files, and data constructed by specific applications).

SRM functions include space-usage management, capacity planning, asset management, business continuity planning, and management of events, performance, and configuration.

Exabyte, Ecrix to merge

The announcement that Boulder, CO-based tape vendors Exabyte and Ecrix will merge by year-end may not have sent shock waves throughout the storage industry, but it did rock the tape sector. By combining resources, and ultimately blending tape technologies, the two companies believe they will be able to accelerate sales of Exabyte's Mammoth and Ecrix's VXA tape formats.

According to the merger agreement, Exabyte will issue 10 million shares of common stock in exchange for all outstanding equity of Ecrix. The combined company will carry the Exabyte name, though the VXA label will remain at least through the next generation of 8mm tape products due out later this year.


Bill Marriner
Exabyte
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"It's an excellent move for both companies," says Bob Abraham of Freeman Reports, a tape market research firm. The deal gives cash-strapped Exabyte a $9.4 million infusion as well as a presence in traditional DDS tape markets. In return, Ecrix gets to leverage the Exabyte name and, perhaps more importantly, the company's supply-chain partnerships and distribution channels.

"VXA brings us into the lower-end/volume part of the market-where we have never played before," says Bill Marriner, chairman, president, and CEO of Exabyte. As for competitive technologies from vendors such as Seagate, Sony, Tandberg, and Seagate, he contends they are not priced right (AIT-1), don't have the market presence (SLR), or don't have adequate performance and capacity (Travan) to capture significant market share.

"The [merger gives us] the corporate infrastructure needed to service very large OEMs," explains Juan Rodriguez, Ecrix co-founder, chairman, and CEO. Rodriguez says that although Ecrix has the inventory to cover the company's recently signed deal with Compaq for SCSI and IDE VXA-1 drives and media through the end of the year, the merger ensures continued supply in the event of a steep ramp.

Ecrix currently outsources media and drive manufacturing to Sony and Aiwa, respectively, while Exabyte uses Matsu shita Electric Industrial, Sony, and TDK for media and soon, Hitachi, for Mammoth-2 drive manufacturing.

But perhaps the most interesting prospect to come out of the proposed merger is the idea of "blending" the two 8mm technologies (VXA and Mammoth) so that they are compatible formats. "Such a matrix would enable users to make a move in performance without switching technologies," says Rodriguez. This compares to compatibility between Benchmark's DLT1 and Quantum's DLT families.

Ecrix expects to begin shipping its second-generation 80GB/6MBps VXA drive later this year, while general availability of Exabyte's third-generation 120GB/14MBps Mammoth product is slated for early next year. Read-compatibility between the two formats, should it occur, will be added after this generation. Exabyte also has plans to integrate VXA into its library/autoloader families.

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