M&A heats up, but so do start-ups

Mergers and acquisitions have hit the storage industry at a fairly steady pace over the last couple of years, but the action in the first half of this year suggests that the pace may be picking up.

Just a sampling of deals that were completed or announced in the first six months include Hewlett-Packard-AppIQ, Sun-StorageTek, QLogic-Troika, Seagate-Maxtor, HP-OuterBay, Brocade-NuView, Microsoft-String Bean Software, EMC-Kashya, Quantum-ADIC, and Packeteer-Tacit, the last three of which are covered in the June 2006 issue (see EMC buys replication vendor, Quantum acquires ADIC, and Packeteer acquires Tacit— pp. 10, 11, and 14, respectively).

Although we always hate to see the plucky start-ups get swallowed by the big fish, this is a healthy contraction in an industry with too many vendors (approximately 240 if you include the chip makers).

However, offsetting the acquisitions to a degree, a number of interesting start-ups recently emerged from stealth mode. Three are covered in the June 2006 issue: Scentric, Caringo, and Attune, (see Scentric emerges from stealth mode, Caringo launches software-based CAS, and Attune enters file virtualization arena on pp. 12, 17, and 18, respectively).

Scentric, an interesting start-up that recently emerged from stealth mode, is entering the storage market with data classification software, also referred to as information classification and management (ICM), which in turn, is a component of information lifecycle management (ILM). Unlike some of its competitors (most of which are also start-ups), Scentric’s Destiny software tackles all data types: unstructured, semi-structured, and structured.

Caringo is entering the content-addressed storage (CAS) market, which is dominated by EMC. However, there’s a twist here: One of the founders (and currently CTO) of Caringo-Paul Carpentier-was also one of the founders of FilePool, a small Belgian company that was arguably the original CAS vendor, which was acquired by EMC in 2001. FilePool’s CAS technology made its way into EMC’s wildly successful Centera CAS platform.

Carpentier’s back, and this time he’s taking shots at EMC. But the interesting thing about Caringo is that its CAS technology is a pure software play, with no proprietary hardware required.

(The name “Caringo” is derived from the last names of its founders: Paul Carpentier, Jonathan Ring, and Mark Goros.)

Attune enters the relatively uncrowded field of players in the NAS/file virtualization space, which is sometimes referred to as network file management (NFM). Other players in this market include Acopia Networks, Brocade (via its acquisition of NuView), EMC (via its acquisition of Rainfinity), and NeoPath Networks.

Whether these start-ups get acquired is probably irrelevant to most end users, as long as the technology-which appears to be very promising-survives.

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Dave Simpson

This article was originally published on June 01, 2006