Storage technology maker Network Appliance announced Tuesday that it has agreed to buy rival server and software manufacturer Spinnaker Networks in a $300 million stock deal.
Through the deal, NetApp gains control of Spinnaker's collection of network-attached storage (NAS) server hardware and operating system software products. Privately held Spinnaker, based in Pittsburgh, specializes in storage system architectures, distributed file systems, clustering technologies and virtualization software.
The aspect of Spinnaker most coveted by Sunnyvale, Calif.-based NetApp, which makes both NAS and storage area network (SAN) systems, is the vendor's OS software. Dan Warmenhoven, CEO of NetApp, said the two companies' respective storage hardware products are very similar, but he added that Spinnaker's software products bring a range of new functionality into his company's control.
"We feel they've developed a first-class technology core in their operating system that can be very complementary to our own," Warmenhoven said. "These are two companies that have come from different places have actually been headed toward the same end point."
To that end, Warmenhoven thinks that Spinnaker fits nicely into his company's overarching vision of "storage grid" computing. Much like the emerging concept of utility computing, which enables multiple systems in a network to work on a shared task, storage grid computing allows access to and manipulation of data that's stored across a number of devices and locations without any indication that the information is widely distributed.
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Warmenhoven said the horizontal scalability model Spinnaker developed will enable NetApp to begin delivering on the concept of the storage grid, whereas in the past, the company could only talk about it.
"The (horizontal scalability model) is a technology that can make multiple devices appear as a single machine," he said. "Adding this to Network Appliance's existing technology is a dramatic way of introducing the vision of the storage grid."
NetApp executives said they expect the deal to close sometime around January of 2004 and do not expect any job cuts at either company as a result of the merger. Spinnaker employs roughly 83 people; NetApp employs 2,400.
Warmenhoven said the company would move quickly to fold Spinnaker's SpinServer hardware technology into its own product lines. He said Spinnaker's team of 60 engineers would begin working with NetApp developers as soon as possible and indicated that several technology projects at both companies, specifically related to their respective operating system software, would be integrated.
At least one industry analyst was encouraged by the merger. Steve Duplessie, principal analyst at Enterprise Storage Group, wrote in a statement that he believes that through the deal, NetApp is increasing its reach in the high-end storage market.
"This will enhance (NetApp's) competitive position and time to market with the next new (storage technology) advance," Duplessie wrote. "I can?t find a single thing I don?t like about this deal."