Yesterday, NetApp announced the acquisition of the Engenio storage division of LSI for $480 million. Engenio is mainly known as an OEM provider of storage systems with a broad partner list that includes IBM, Sun, Blue-Arc, Teradata, Panasas, RAID Inc., SGI and Huawei.
This move follows a busy year of storage acquisitions with HP, EMC and Dell each spending more than a billion dollars on buys in the space. $480 million represents the biggest acquisition ever for NetApp, more than they spent this past year on Bycast and Akorri, or previously on Onaro, Topio, Decru or Spinnaker.
Most of the money in storage acquisitions has gone to software that can be mated to industry standard (or nearly standard) hardware, but this deal goes in a different direction with LSI being a vendor known for meat and potatoes Fibre Channel storage hardware without a lot of frills. NetApp is largely a software company that sells OEM hardware running their DataONTap operating system, chock full of some of the most features and protocol options in the industry. Focusing on differentiated software has allowed NetApp to enjoy high margins and a consistent, unified family of products from entry level to enterprise class. So why would NetApp want to jump into the fairly commoditized storage hardware business?
Read more