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Hitachi Data Systems snaps up BlueArc

By Sonia Lelii, Senior News Editor

Hitachi Data Systems earlier today announced it has scooped up its OEM partner BlueArc for $600 million, and hours after the news broke, not many seemed to be taken aback by the acquisition that gives HDS its own NAS platform.

“Little surprise, big deal,” said Arun Taneja, founder, president and consulting analyst for Taneja Group. “BlueArc has one large OEM partner, and Hitachi has never had a NAS box to speak of. They had a poor NAS offering until they signed a deal with BlueArc. The company has become more and more important to HDS. Hitachi is highly dependent on these guys, and HDS is BlueArc’s lifeblood.”

SAN vendor HDS and BlueArc have had a successful five-year OEM relationship: HDS sold BlueArc’s SiliconFS file system with its storage arrays to give HDS platforms NAS capability. BlueArc was founded in 1998 and it had refiled for an IPO in June this year. The company initially filed for an IPO in September 2007 but withdrew after the housing bubble burst. The 13-year-old company has had a long stint as a startup, losing a total of $230.3 million since it began shipping storage systems in 2001. “BlueArc has had a lot of ups and down over the years,” said Taneja. “This current management team has steadied the ship and slowed down the bleeding.”

The company helps accelerate filer I/O in HPC environments with its enterprise-level Titan Series Servers and midrange Mercury Series Servers. It also offers three storage arrays, data protection software, file system software, and virtual and tiered storage products. Taneja said BlueArc’s filer products came with a high cost premium compared with market leader NetApp because the company designed and built its own NFS ASICs. “Their average cost is definitely higher than NetApp,” said Taneja. “It’s the only company I know of that does NFS in ASIC. BlueArc has a solid product.”

This deal follows several high-profile purchases of storage startups last year, including Hewlett-Packard’s $2.4 billion purchase of 3PAR, Isilon Systems’ sale to EMC for $2.25 billion and Dell’s $820 million purchase of Compellent Technologies.

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