News Director Jo Maitland or News Writer Beth Pariseau.
More storage mergers and acquistions: Opsware acquires CreekPath for $10M Server and network management software maker Opsware Inc. announced Thursday that it has signed a definitive agreement to acquire storage resource management (SRM) startup Creekpath Systems. CreekPath's flagship product, Acuity, will be discontinued, according to Opsware officials, but the "back end" of the product, including its information gathering, replication and capacity planning tools, will be folded into Opsware's Server Automation and Network Automation platform. According to Opsware vice president of marketing Eric Vishria, the product is slated for release in the first half of 2007.
According to Vishria, once the product is integrated, its SRM features will be developed further by Opsware, but the one area he said Opsware will not tackle is storage provisioning.
"We keep getting feedback from customers that they're happy with their vendor tools and by and large. there isn't much interest in heterogeneous storage provisioning," he said.
Still, the company, which was acquired for $10 million plus an "earn-out protection" option that will pay its additional stakeholders up to $5 million should Opsware sell any of the Acuity product, had been struggling for some time."This was a salvage move on the part of CreekPath's investors," said John Webster, analyst with Data Mobility Corp. "I think they did a good job to salvage what they could."
"If you look at the SRM space in general, outside of AppIQ [Inc.], many have struggled or refocused their efforts," said Greg Schulz, founder and analyst with the StorageIO Group. "CreekPath had some good technology, however, as we have seen time and time again, great technology is not always enough -- you also need to have customers who will pay."
Following a similar strategy of an integrated IT platform, CA Inc. acquired replication software maker XOsoft Inc. for an undisclosed amount on Tuesday. (See CA acquires XOsoft, adds replication to ArcServe, July 12.)
Sun's VSM Open put out of its misery Sun Microsystems Inc. announced Monday that it will can the Virtual Storage Manager (VSM) Open product, initiated by StorageTek long before its acquisition last year. According to multiple industry sources familiar with the project, the attempts to develop an open systems equivalent of StorageTek's mainframe virtual tape library (VTL) had been an ongoing headache for both companies.
The project was initiated within StorageTek four years ago; eventually, when internal development stalled, the project was outsourced to developers in India. According to sources, when Sun purchased StorageTek, the Indian subcontractor had virtually nothing to show for months of work. The project was brought back in to Sun/STK after the acquisition, but after project deadlines were repeatedly missed, sources say, Sun decided to cut its losses.
"VSM Open has had a long and storied history with StorageTek," said a source who asked not to be identified. "[Sun] has been offering FalconStor [Software Inc.] for a while but never really brought it up because then they'd have to deal with the obvious questions about VSM Open."
Now that this move has been made, Sun is in the midst of re-evaluating its VTL partners. Some in the industry believe that it could be either adding a new partner for the high-end customers VSM Open was meant to target or replacing FalconStor entirely, soon. At one time, StorageTek was rumored to be looking into acquiring Dilligent Technology Corp., currently the partner with Hitachi Data Systems Inc. (HDS) for VTL products, also announced this week. It might be a logical step for Sun to work with either Dilligent or HDS or both, given its history of partnership with HDS. Fujitsu Siemens Co. has also been a rumored VTL partner for Sun in the past.
"Sun is taking stock of its entire portfolio and evaluating which technologies will help it grow and get back on the path to profitability," Sun said in a statement on its Web site. "Our major focus in the open systems virtual market is continuing momentum in the midrange with the VTL product, which will get a major boost in the fall timeframe with an enhanced VTL solution and a VTL for the super user in Q1 2007."
In the same statement, Sun also promised to get back into the VSM Open project next year, but insiders say the project is probably dead.
"The VSM open development team will be notified that they will be on the Aug. 3 RIF [reduction in force] list," according to one source. There are also rumored engineering layoffs coming at Sun this summer, part of the reorganization undertaken by new CEO Jonathan Schwartz since his succession to the position in late April. (See Sun reorganization trickles down to storage division, June 29.)
Big boys have troubles on Wall Street EMC Corp. said Monday that it missed its revenue guidance of $2.66 billion for the second quarter of 2006 by around $100 million and said the discrepancy was due to higher than expected orders for the new DMX-3 systems over the DMX-2, which resulted in an inventory snafu. The company's shares, which had already taken an 8.5% hit after Wall Street analysts expressed their disapproval with the acquisition of security company RSA Security on July 30, tumbled 7% during trading Thursday, to finish at $9.98 per share.
But Network Appliance Inc.'s (NetApp) shares fell even further midweek, closing at $28.60 on Wednesday -- a loss of $2.13 (6.93%) from its opening price. Since a high of $38.50 on April 20, the stock has depreciated by nearly 26% to $28.60, as of Wednesday's close.
NetApp's slide was attributed to a note to clients sent out this week by Kaufman Brothers LP analyst Shebly Seyrafi, who cited a rising finished-goods inventory and a weak channel in Europe for his worries over the stock's future.
The company's latest Securities and Exchange Commission (SEC)10-K filing showed that NetApp's finished-goods inventory -- Wall Street-speak for unsold products -- increased from $34 million, or 53% of inventory in the third fiscal quarter, to $46 million, or 72% in the fourth quarter, the highest level since 2000. A more typical level is 50% to 55%, he said.
The 10-K filing also indicated that NetApp had received a "routine" letter of inquiry from the SEC regarding its accounting practices, another contributor to the stock "sell-off" on Wednesday.
"[The concern over the SEC inquiry] reminds me of the old 'E. F. Hutton' commercial," Schulz said. "When someone says 'SEC,' everyone stops and looks to see who is being talked about ... I think and hope that this is all just market jitters and due diligence."
Intel offers channel-friendly storage system Intel Corp. announced a new storage server hardware platform that can be customized for small and midsized businesses (SMBs). System builders and integrators can couple the Intel Storage System SSR212CC with various software products to create a network attached storage (NAS) or storage area network (SAN) appliance.
Intel announced its intentions to get into the storage business through a partnership with EMC at Storage Networking World in San Diego on April 4.
Gear6 secures $10M New storage performance acceleration startup Gear6 announced a $10 million round of funding led by InterWest Partners, and joined by previous investor U.S. Venture Partners (USVP). The financing will support the market entry of Gear6 products, "designed to address the widening gap between increasingly powerful servers and constrained, disk-based storage systems," according to a press release.Xiotech adds solid-state disk drives Xiotech Corp. announced support for Fibre Channel-attached solid-state disk (SSD) drives in its Magnitude 3D 3000 storage systems. Solid-state disk offers higher performance than traditional Fibre Channel.