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NetApp to buy change management software player Onaro

Analysts say the merger has the potential to take both companies' products into new environments, though the future for Onaro users is uncertain.

Network Appliance Inc. (NetApp) today revealed that it will acquire configuration and change management software player Onaro Inc. -- a deal the storage vendor hopes can bring it into larger Fibre Channel SAN accounts.

NetApp did not disclose the acquisition price because the amount is not material to its business. The acquisition is expected to close by the end of March. Onaro had $9.5 million in venture capital funding, and its executives said the startup was profitable over the past year. Onaro claims 32% of the Fortune 50 companies as customers.

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Analysts and NetApp officials said that Onaro stands out in the storage resource management (SRM) market, mainly because its SANScreen and Application Insight products are agentless software modules -- they sit on a switch in the environment and trap data from devices connected to the network using SNMP, APIs and open source methods. The software then reports on data paths in the environment and alerts administrators when configurations are unstable.

Another differentiator for Onaro's products, according to John Webster, principal IT advisor with Illuminata Inc., is recently announced integration with VMware. Onaro used VMware's custom API to create Onaro VM Insight, a module that plugs into Application Insight. Webster said Onaro appears to have the complete checklist of features for managing VMware environments, including the ability to connect virtual machines to the storage fabric and disk arrays down to the individual disk level.

NetApp and Onaro officials said they did not know how many joint customers the two companies have, but one NetApp customer said he's looking forward to checking out Onaro software. Rich DeBrino, CIO at Advances In Technology, wrote in an email that he was excited about the acquisition. "NetApp has always been a good, strong product, but this should also allow them to challenge EMC Corp.'s hold on the enterprise market, since this management piece has been one of the key missing elements, in my opinion," he wrote.

Onaro users could not be reached for comment as of press time, but analysts warn that the acquisition could disrupt the existing customer base. "Many of Onaro's existing customers may have liked the fact that they were independent, something Onaro also prized," said Andrew Reichman, analyst with Forrester Research. "Now they've lost that independence."

According to NetApp chief marketing officer Jay Kidd, NetApp doesn't plan to integrate Onaro's product too deeply into its OnTap operating system because it wants to preserve the heterogeneity of the product. Kidd said the pricing structure will remain the same for the product "at least at first," and that existing Onaro customers who do not have NetApp products will receive support through NetApp. It has yet to be determined whether there will be a dedicated support team or if Onaro users will have to go through NetApp's main support centers.

"Onaro will become a part of NetApp," Kidd said, "but it has been doing very well just as it is."

Competitors are watching the deal closely. EMC vice president of technology alliances Chuck Hollis wrote a detailed analysis of the acquisition on his blog. He points out that Onaro's customer base is generally in high-end complex Fibre Channel SAN environments, while NetApp's strengths have been in NAS, multiprotocol products and iSCSI. "Simply put," Hollis wrote, "Onaro's products aren't targeted at NetApp's classic customers, and NetApp's products aren't targeted at Onaro's classic customers. I'd rate the strategic alignment part of this as "poor." Moreover, Onaro has only recently added support for NAS, with the announcement of NAS Insight Manager 1.0 last month.

Though as a competitor Hollis' view should be taken with a generous helping of salt, (and some in the industry point out that if EMC is throwing cold water on the deal publicly, it's probably an indicator of concern), analysts said he has a point. However, according to Gartner analyst Dave Russell, the "lack of synergy" between Onaro and NetApp is probably the point, not a drawback. "This is all about Fibre Channel and about achieving better penetration for NetApp in big accounts," he said.

Reichman pointed out Onaro may have felt a squeeze on its end because it was late with NAS management and still doesn't have iSCSI monitoring capabilities. "Fibre Channel, as a transport mechanism, isn't really the future of storage. Do Onaro and its customers want to box themselves into that?" he asked.

According to Onaro's vice president of marketing Bryan Semple, Onaro anticipates it will get a boost in its NAS and Ethernet development from NetApp. Meanwhile, according to Kidd, "this will help NetApp penetrate more deeply into the SAN world."

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