Article

Indie storage consultancy ripe for takeover

Kevin Komiega

GlassHouse Technologies Inc., doubled in size Tuesday by acquiring a pair of U.K.-based storage providers, namely Source Consulting and Sagitta Performance Systems. The acquisitions have effectively doubled GlassHouse's customer base and consulting resources, making it a tasty acquisition prospect.

GlassHouse has added 300 storage clients and raised its total number of storage specialists and consultants to 220, making it hands-down the largest independent storage consulting firm in the industry. Some of GlassHouse's clients include Biogen Idec Inc., Hartz Mountain Industries Inc., Pitney-Bowes Inc. and The Guardian Life Insurance Co. of America.

The financial terms of the acquisitions were not disclosed, but Framingham, Mass.-based GlassHouse CEO Mark Shirman said the deals were "all stock acquisitions."

Source Consulting and Sagitta Performance Systems will be merged and operated as a wholly-owned subsidiary called GlassHouse Technologies U.K. Ltd.

Shirman said the expansion of GlassHouse "across the pond" will help the firm better manage storage for its existing customers. "[Our customers] tend to have a lot of storage in the U.K., particularly in London," he said.

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Implementing storage solutions continues to be a black art
Peter Gerr
analystEnterprise Storage Group

Peter Gerr, analyst, emerging technologies and market trends at the Enterprise Storage Group, said he believes Glasshouse is in an enviable position as one of only a few companies specifically targeting one of the fastest growth segments in the market. "Implementing storage solutions continues to be a black art as the number of different products increases along with the complexity … Putting this technology together in a meaningful way is a challenge," he said.

According to Gerr, this sector is "ruled by bottom feeders and giants," and in the middle are vendors such as EMC and Hewlett Packard Co. with their own professional services organizations. He said the consulting giants, like KPMG International and Deloitte Touche Tohmatsu, tend to be more focused on business continuity, disaster recovery and large outsourcing challenges, while EMC and HP operate more of a "break/fix" service. This leaves a large gap for companies like Glasshouse to solve all the interoperability challenges that plague the market, he said.

While Glasshouse might be pleasing its customers, it will have a harder time pleasing Wall Street should it ever decide to go down this route. Wall Street doesn't traditionally value professional services as highly as components and systems vendors. IBM's continual flip-flopping on whether to spin out its Global Services organization is testament to this, analysts said.

To offset this problem, Gerr said he believes Glasshouse is building up a stable of intellectual property around tools and best practices to make itself more of an attractive asset for larger services companies or one the big storage vendors looking to beef up its services strategy.

GlassHouse's Shirman said his intent is to keep the company independent, but would not dismiss the possibility of being acquired in the future. "We're not naÏve. We recognize the fact the opportunity exists, but we don't spend a lot of time worrying about it," he said.

SAN Holdings Inc. (SANZ) based in Denver, Colo., is another company targeting the storage services market along with The Storage Group, in Oceanside, Calif.

GlassHouse Technologies U.K. will be led by Mark Vargo, former managing director of Europe CNT, Jason Rabbetts, managing director, U.K., and Andy Norman, senior vice president of Technology Services. Alan Watkins, former managing director and founder of Cisco Systems Ltd., will serve as chairman of the board for GlassHouse in Europe.

FOR MORE INFORMATION:

GlassHouse gleans $7.1 million

GlassHouse experts offer users guidance at Storage Decisions 2004

Look at independent consultants when designing a backup solution


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