Sun Microsystems Inc.'s bold acquisition of Storage Technology Corp. (StorageTek) for $4.1 billion yesterday received...
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
a positive response from both companies' users, despite Wall Street analysts' reservations about the deal.
The ability to buy tape libraries and disk storage from the same vendor and to have one person to deal with for maintenance and support prompted a welcome sigh of relief from many users.
The notion of one throat to choke was the main reason why Charles Becker, IT director with MedImpact Healthcare System Inc., gave the deal the thumbs up. He recently experienced a Network Data Management Protocol backup problem and faced finger-pointing from all parties involved -- Sun, StorageTek, Network Appliance Inc. and Veritas Software Inc. "StorageTek said it's not us, it's the storage; Sun said it's not us, it's your library -- we had to be the middleman to bring the sides together." MedImpact has about 230 Sun servers and Sun-branded Hitachi Data Systems Inc. storage as well as L80 and L700 tape libraries from StorageTek.
Chuck Sears, director of research at Oregon State University, agreed that the acquisition suggests Sun is trying to create a complete offering for the data center -- which he believes is the right approach. "There is less and less value in point solutions." Sears is also looking for more movement from Sun on its relationship with Microsoft, and he hopes that StorageTek, as a heterogeneous provider, might help with this. The university has 50 TB in production split between Sun, IBM, Hewlett-Packard Co., Apple Corp. and Silicon Graphics Inc. storage.
Wall Street weighs inShebly Seyrafi, analyst with Merrill Lynch & Co. Inc., questions Sun's decision to buy versus partner with a tape company in order to beef up its portfolio. EMC Corp, for example, has a reseller agreement with tape library company Advanced Digital Information Corp., he said in a note to investors.
"Additionally, we will be interested to see if Sun will be able to successfully upsell StorageTek's installed base with Sun products as tape is typically attached to a server sale -- not the other way around."
Others analysts note that tape sales are in decline. The introduction of disk-based backup and virtual tape technologies is causing many customers to rethink their backup environments and wherever they can, to replace tape. That said, disk-to-disk backup is a relatively new trend and most users still view tape as a necessary [evil] part of their archival strategy.
From Sun's perspectiveStorageTek's sales force and services expertise was a large reason for the deal. StorageTek adds about 1,000 salespeople to Sun's 10,000 plus salespeople. Combined, the company will have a total of over 17,000 customers.
"StorageTek is in lots of accounts where we're not. They can broaden Sun's position in the data center, in the data management area," said Mark Canepa, executive vice president of network storage at Sun. For StorageTek's part, approximately 50% of its sales are on the mainframe so its business should benefit from a better attachment rate of storage to server sales.
Pat Edwards, vice president of sales for Alliance Technology Group, StorageTek's largest reseller on the coast said he was up at the crack of dawn figuring out how the deal will affect his business. "Sun doesn't have a storage channel to speak of so we think we will get a lot more business out of the combined company," he said.
There is some product overlap between the two companies, but not much, according to Randy Kerns, partner and analyst with the Evaluator Group. Both companies have been developing a disk-based fixed-content archival system, but neither product is on the market yet. "They might be able to do some positioning by segment to get around this," he said. At the low end there is some overlap between Sun's 3000 line and StorageTek's FlexLine 200 products but Kerns believes this becomes a moot point with technology changing so fast.
"There are a couple of areas of overlap, but when you line up the products, they are pretty complementary," Sun's Canepa said.
Click here for more of today's news.