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Let the primary reduction deals begin

IBM is looking to grab primary data reduction vendor Storwize for $140 million, according to Israeli financial news websites Globes and TheMarker. Whether that deal comes off or not, you can expect a series of either OEM deals or outright acquisitions involving large storage vendors and suppliers of primary reduction technology – which now includes Permabit Technology, Ocarina Networks and Storwize.

Permabit and Ocarina each say they have one large OEM primary deduplication deal nailed down and are working with more storage vendors to secure others. Dell, Hewlett-Packard, Hitachi Data Systems, IBM, and LSI are all believed to be on the prowl for the technology and it’s a matter of whether they will forge OEM deals or acquire the technology outright. NetApp and EMC already have primary reduction capabilities.

Ocarina has been the subject of acquisition rumors, and Ocarina director of marketing Mike Davis says an IBM-Storwize deal would raise his company’s value.

“There’s demand for this technology, and we’ve had contact and serious conversations with all the OEMs out there,” Davis said. “We don’t know how serious IBM’s interest is [in Storwize], but Storwize only does a subset of what Ocarina does. So if they’re worth $140 million, Ocarina should be worth even more than that.”

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