Wednesday, August 05, 2009

Is NetApp going to be acquired?

Whenever NetApp acquisition rumors start I get customers and analysts calling to ask what I think of the news. Yesterday afternoon it seems another rumor was floated and folks wanted to know my thoughts.

Tech Rumor of the Day: NetApp Touted as M&A Bait
James Rogers
08/04/09 - 01:41 PM EDT

Storage may offer a bright spot for investors in the slowly-recovering economy, as M&A chatter again swirls around NetApp(NTAP Quote).

"We do believe it would make sense for a larger IT company to acquire NetApp as it would be attractive from a product portfolio and accretion perspective," wrote Brian Marshall, an analyst at Broadpoint AmTech, in a note released Tuesday. The storage specialist could be particularly attractive to a "more mature" IT company like Cisco(CSCO Quote), IBM(IBM Quote) or Hewlett-Packard(HPQ Quote), he added. Although not exactly the tech sector's equivalent of The Graduate, there has already been speculation touting NetApp as a possible target for the cougar-like IBM.

These things come in cycles and I imagine eventually something will happen which is why it concerns our several hundred NetApp support clients. Customers are looking for a safe harbor for the continuing support of their equipment, they want to make certain that their storage strategy is secure, and these rumors force them to look at other storage companies who may be able to provide a longer term solution. No one wants to have a proprietary storage solution that competition has eliminated from the path of storage evolution.

In my opinion, these rumors may help NetApp's larger storage competitors because their sales people can leverage the uncertainty about NetApp's future into sales of their products, or at least by planting the seed of doubt into their competitive sales pitch.

On the other hand, the smaller competitors like Isilon and 3Par can leverage the uncertainty about NetApp to customers who ask about whether they are big enough to compete. They can spin a story about how NetApp's future is as uncertain as theirs is, anyone can get acquired and products can get eliminated from support.

Zerowait can and will continue to provide service and support for Filers if NetApp is acquired, just as we have been supporting the NetCache line since it was sold. We will assist our several hundred customers in migrations if required, and help them with the disposition of their superseded storage assets. Our customers know that they can trust us to provide them with an honest, well thought our migration path. If there is an acquisition, and they are forced to move to a competing technology, our intention is to help our customers with a long term service and support solution that will help them migrate to a competing technology as smoothly as possible, when they need to.

Thanks for the link

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