IBM announced it will OEM the majority of Network Appliance Inc.'s NAS products in a move aimed squarely at competing with EMC Corp.
As part of the relationship, NetApp will integrate IBM's Tivoli Storage Manager with its products, positioning IBM as its preferred supplier of backup and recovery software. NetApp will do the same for IBM's tape systems.
"Make no mistake, EMC is clearly in our sights," said Andy Monshaw, general manager of IBM's storage business, on a call with press and analysts.
IBM will rebrand NetApp's unified SAN and NAS filers, as well as the NearStore, and recently announced V-Series systems, including associated software offerings.
"It's finally a serious step by IBM into the NAS marketplace," said Tony Asaro, senior analyst with Enterprise Strategy Group. "HDS, IBM, Sun and HP have all been asleep at the wheel … Letting EMC in the door with NAS was not a smart thing to do."
Asaro noted that the NAS marketplace has been a two-horse race up to this point, with NetApp in the lead and EMC a distant second. He said the IBM deal with NetApp has "the potential to hurt EMC if IBM can really execute."
To date, IBM's track record in NAS has been poor, analysts say. It used to sell a Windows NAS box but pulled that to build a Linux blade, which didn't last either. IBM's Monshaw said the company will withdraw its NAS Gateway 500 from the market over time.
Interestingly, there is no time limit on the OEM deal with NetApp, which raises the question of how long IBM might be willing to sell someone else's product? Hitachi Data Systems (HDS), only this week, severed its ties with NetApp after a three-year OEM deal, to introduce its own NAS product line.
Asaro said he believes IBM's strategy is different. He noted that it's had significant success in the mid-market selling the Engenio Information Technologies systems, re-branded the FAStT product line. "IBM is very conservative in the storage market -- it doesn't make huge leaps … OEM deals are a safe way for it to cover a market," he said.
From a field sales perspective, insiders say this announcement puts a big dent in NetApp's partnership with Veritas Software Inc. as it is now promoting Tivoli as its preferred backup supplier. "It's not Veritas versus Tivoli, it's the two of them versus EMC," said Dan Warmenhoven, CEO of NetApp.
In an e-mail responding to the deal, EMC said: "We see this OEM agreement, which is yet unsigned, as reinforcing IBM's fractured NAS strategy and an admission it has virtually no NAS success. NetApp is admitting it can't offer customers a complete tiered storage solution. It will be interesting to see how IBM positions two competing virtualization strategies especially given its recent announcement of its 1000th customer."