Sun Microsystems on Monday announced plans to acquire privately-held storage management developer HighGround Systems, Inc. In a conference call yesterday, Sun's President an COO Ed Zander said that the company intends to compete heavily with the likes of EMC Corp. and Network Appliance, Inc. in the storage arena and the acquisition of HighGround's storage resource management (SRM) technology will allow Sun to leap frog its competition.
Under the terms of the agreement, Sun will acquire HighGround in a stock-for-stock transaction worth approximately $400 million. The deal is expected to close in the third quarter, which ends March 30, 2001, of Sun's fiscal year 2001.
Zander said that the two companies will operate as independent entities until the deal is closed and declined comment on any projected revenues or future product lines that will result from the acquisition. Sun did say that the acquisition would expand Sun's offerings to include new storage resource management capabilities and multi-platform tools for management of data and efficient control of resources.
According to Ron Lloyd, vice president of engineering for Sun Network Storage, the entire HighGround team will be brought over to Sun to continue developing the SRM products. "The idea is to augment our organization, not replace anyone," he said. Lloyd added that HighGround's existing storage resource management technology complements what his team is already doing and adds to Sun's overall arsenal of storage offerings. "We didn't have any activity underway in this space. We would have had to start from scratch and that would've taken a couple of years. We think it gives us a competitive tool against the likes of EMC, Tivoli, and Computer Associates," he said.
HighGround has existing partnerships with many vendors including Compaq and NetApp, deals, which Zander said, will continue. "We bought the company and with that comes obligations. We intend to honor and maintain partnerships." He added that Sun has been looking to expand its working partnership with Compaq and sees this as an opportunity to do just that.
Zander said that Sun is executing a step-by-step plan to take a lead role in the storage market. Sun has debuted a series of open systems storage products since June including the Sun StorEdge T3 array, new management software, and a suite of storage services. "The acquisition of HighGround fits perfectly with our open systems strategy and extends our product line and ultimate position in the market," he said. "We hope the acquisition will give Sun entrance into the storage resource management market. This was just a quicker way to get there. It's a slam dunk."
The Gartner Group estimates the storage resource management market will reach $1.7 billion in 2003.
Following completion of the acquisition, HighGround will become a part of Sun's Network Storage organization.
HighGround's Global Storage Resource Manager (SRM), is a family of solutions for managing storage resources in for direct-attached, network-attached storage, and fibre channel storage area network (SAN) environments. The majority of SRM's business is in the NT space, but it supports multiple environments including AIX, HP-UX, and Solaris.
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