June 29, 2009 – While we wait for the outcomes of the proposed acquisitions of Data Domain (by EMC or NetApp) and Emulex (by Broadcom), why not turn back to the longest-running acquisition speculation in the storage industry: NetApp.
For some reason, rumors about a potential acquisition of NetApp have been around for almost as long as NetApp has been around. I never gave them (the rumors, not NetApp) much credibility because (a) I don’t see which vendor would benefit sufficiently from a (roughly estimated) $8 billion acquisition of the company and (b) NetApp looks like a real winner in standalone mode.
But I recently read a blog post from Wikibon.org president and founder Dave Vellante that calls these suppositions into question (even though Dave’s conclusion is the same as mine: That NetApp will not get acquired).
Although NetApp is looking pretty good right now, as data centers collapse (in a positive sense) around converged networks, the eventual winners will be the vendors that have the deepest penetration into the whole IT stack; say, Cisco, EMC, HP, IBM and/or Oracle-Sun. Will a pure-play storage vendor be able to prosper in that scenario?
Here are a couple snippets from Dave’s blog, and a link to the full post:
“NetApp is a $3.4 billion company with 8,000 employees and a good balance sheet. But it’s a ‘tweener’ in the IT sector. Not huge like HP and IBM, but much larger than smaller pure plays like 3PAR and Compellent. In his keynote, Warmenhoven raised the question that he said he’s frequently asked: “Who is going to buy NetApp?” His answer is essentially “no one,” because no company wants to own or can afford to own NetApp.
The question we have is how much further can NetApp go? Are we witnessing a trend similar to the minicomputer days where the likes of Prime Computer, Wang Labs and Data General, while highfliers in their day, were big but not attractive enough growth prospects to be acquired (notwithstanding DG’s smart move to re-invent the company as a storage player and subsequently sell to EMC)?
for the full post.