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EMC, CacheFlow partner to ace NetApp

In a move to catch up with rival Network Appliance, storage giant EMC signs a deal with CacheFlow to manage data distributed across the Internet.

In a move to catch up with rival Network Appliance, storage giant EMC has signed a deal with CacheFlow to manage data distributed across the Internet.

NetApp builds data storage systems that compete with CacheFlow and EMC products, including EMC's "caching" servers that distribute data across the Internet.

Now the partnership between CacheFlow and EMC will put more pressure on NetApp and others such as Inktomi and Akamai that sell products for delivering information across the Internet. Under the partnership announced Tuesday, CacheFlow software will ensure that changes in data stored on a central EMC Clariion storage system will be spread to CacheFlow servers at other points across the Net, the companies said.

The deal is a boost for CacheFlow, which has suffered a financial bruising and announced layoffs. EMC, by comparison, continues to argue that it's largely immune to the current economic slowdown.

The deal is a good idea, Banc of America Securities analysts Shaw Wu and Michael Chang said in a report. "In our view, this announcement is favorable for both companies and capitalizes on the growing demand for content delivery networks," the analysts said.

NetApp has long sold storage systems and caching servers, but getting the two products to work together became a higher priority in September, when NetApp acquired WebManage. The deal brought NetApp software that governs how data is distributed from central locations to caching servers.

Now, NetApp executives point to the company's "center-to-edge" strategy as one of the main reasons customers buy its products.

The company continues to gain momentum as it takes on EMC, which historically sold higher-end products than NetApp. But as EMC has begun encroaching on NetApp's turf, NetApp has been pushing back. The company plans to announce Wednesday that IBM's vaunted Global Services division now includes NetApp products in its array of consulting and computer system design services.

Storage companies have had a rocky time of late, in particular with sour news emerging from Emulex, which makes adapters that link servers to special-purpose storage networks that use a connection technology called Fibre Channel. Emulex lost half its value Monday after saying Friday some customers were deferring orders. Though many storage company stocks were dragged down, most, excluding Brocade, regained value Tuesday.

Merrill Lynch analyst Thomas Astle said the Emulex problem could indicate an overabundance of Fibre Channel products that have been manufactured but not sold. However, he said, the Fibre Channel market "remains healthy."

Salomon Smith Barney analysts H. Clinton Vaughan and John Dean were less optimistic. Storage companies "shrugged off" the Emulex issue, but the analysts believe "it does not bode well for the health of storage spending."