IBM acquires NovusCG: Analysis

Posted on October 26, 2007

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By David G. Hill

—On October 24, IBM announced its acquisition of NovusCG, a seven-year old, 100-or-so-employee provider of enterprise storage solutions and related tools. NovusCG will be integrated into the Storage and Data Services business unit within IBM Global Technology Services. As part of that integration, NovusCG's Storage Enterprise Resource Planner (SERP) will be made compatible with IBM's TotalStorage Productivity Center (TPC). IBM will begin integration shortly after the close of the acquisition and plans to have the integration done quickly.

SERP helps companies gain insight into how storage resources are being used internally. With this knowledge, line-of-business managers can make informed decisions relative to their storage environment which can improve their storage infrastructure, reduce costs, and enhance performance. SERP will use the information that TPC collects to streamline capacity planning, forecasting, and chargeback efforts. It will correlate that data with data from other storage resource management products and financial or asset management products.

Companies can use these new insights to better determine their storage needs and plan for better utilization and improved performance through better alignment of their storage infrastructure with their lines of business. SERP will be used by IBM as part of their storage assessment services, optimization and integration services, and managed service engagements.

The fact that SERP is a key component of a storage-focused service engagement gets to the heart of the matter. Also keep in mind that the "CG" in NovusCG stands for "Consulting Group." So IBM is essentially acquiring a consulting group whose products and expertise are typically used as part of service engagements. As a result, the NovusCG acquisition should help IBM reduce the time required and the quality related to their storage service engagements.

However, there is also a challenge here, since NovusCG has business partner relationships with most, if not all, of the large storage vendors. Moreover, the storage infrastructures that IBM examines in an engagement may or may not contain any IBM storage today or, even if it does, may only be part of a heterogeneous mix of storage. As a result, IBM must maintain vendor neutrality as part of its services engagements even though it is integrating NovusCG's products not only with TPC, but with other IBM storage products as well, including Tivoli Storage Manager.

This may seem like a fine line to walk, but it is not new to IBM. For example IBM's Global Technology Services provides multi-vendor services today and has relationships with all the major storage equipment providers in the market. In addition, the company's Tivoli storage software is designed to support virtually every major—and many minor—storage vendor's solutions, so IBM is knowledgeable about and capable of doing what is necessary to make the NovusCG acquisition a success.

Given IBM's size, the NovusCG acquisition is not a large one. However, the deal should fundamentally help IBM build upon its storage and data capabilities by moving up the value chain from baseline IT services to more-sophisticated support of evolving storage usage and buying patterns. NovusCG can help provide customers detailed, actionable storage strategies with step-by-step business justification and demonstrable return on investment as well as metrics to track and measure progress. Better storage analytics is a good step forward toward better storage performance, and IBM should be able to leverage its investment of NovusCG across its entire storage services portfolio in helping its clients transform information into insight.

David Hill is an analyst with the Mesabi Group research and consulting firm. This article also appeared in the Pund-IT newsletter. For more information, go to www.pund-it.com

For more details about the acquisition, go to IBM to buy storage services provider NovusCG.


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