HDS and BlueArc Finally Tie the Knot
One of the first things I thought of when I heard the news about HDS acquiring BlueArc was that it reminded me of a guy that has been dating the same woman for years and years and everyone always asks him - "when are you going to propose to her"? And for years he would always answer - "what's the rush?" Interestingly, it sometimes takes another guy to come around and show interest before the first guy realizes that he is about to lose a really good thing. Rumor has it that IBM made the first offer on BlueArc and that drove HDS to finally "propose". And the rest of us are shaking our head saying "it is about time".
You have to understand that file storage is growing far greater than block and there are only a finite number of players that have any credible solutions . NetApp is the king. EMC just become a lot more interesting with Isilon. And if NetApp is the king then Microsoft is the pope. And everybody else kind of sucks in terms of revenue and footprint.
BlueArc has a great file system and competitive NAS solution but their biggest challenge is having the resources to scale their business. HDS provides additional resources to make this happen. Additionally, HDS has been focusing on SAN storage primarily and adding the BlueArc folks gives them the best independent team in the NAS world.
So think about what I said earlier. File storage growth is eclipsing all other storage types. And there are fundamentally only three players. HDS just made a move that could make them the fourth player. BlueArc is an Enterprise-class NAS solution and that is who HDS sells to. What does IBM do now? HP? Oracle? Dell? They have no real answer to fastest growing segment in storage. HP, IBM and Dell all have file system solutions but none of them can address Tier 1 NAS.
Interestingly, from a bevy of vendors and startups only three NAS players have really been successful including NetApp, Isilon and BlueArc. And arguably only NetApp has been able to do it all on their own. Compare this to the massive number of SAN-based storage system vendors that have achieved amazing success. And yet, file storage is experiencing massive growth and will continue to do so for the foreseeable future.
This is the biggest acquisition by HDS and they have yet to prove they know how to leverage their resources including sales, marketing, operations and engineering to create a meaningful accelerated trajectory for BlueArc especially when compared to Dell with EqualLogic, EMC with Data Domain (and others) or even HP with LeftHand. And since HDS has OEMed BlueArc for several years, will owning the company change the dynamics in any substantive way? Hopefully HDS has an integration plan that will make this a home run for them. I think this is a smart and overdue move for HDS but you know what I'm saying.
I think Mike Gustafson did a great job and the purported $600 million acquisition price is a big win. BlueArc has a great file system and their solution is arguably the only Enterprise-class NAS, based on its scalability and performance. They really were the last man standing in the NAS marketplace and HDS did the right thing by finally becoming betrothed.
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