Adaptec Buys Snap Appliance

 
 
By John S. McCright  |  Posted 2004-07-13 Email Print this article Print
 
 
 
 
 
 
 

Updated: Enterprise storage vendor Adaptec looks to expand its footprint in the network-attached storage market with the acquisition of Snap Appliance.

Adaptec Inc. is expanding its breadth of storage offerings with the purchase of Snap Appliance Inc. The two companies announced the $100 million deal Tuesday afternoon, saying that together they will be able to provide data storage solutions that connect anywhere on the network to any size company. Snap brings to Adaptec its new storage subsystem technology, an expanded sales channel and customers in a variety of industries. Specifically, Snaps GuardianOS software provides the ability to manage both block and file data.
The San Jose, Calif., company is the leader in NAS (network-attached storage) sales, analysts said, and represented an important hole in Adaptecs product line that has now been filled.
"Few companies can offer this breadth of product," said Mark Delsman, senior vice president of business strategy at Adaptec, of Milpitas, Calif. Executives of both companies said the acquisition would be a simple addition: Adaptec has focused mainly on component sales to OEMs, so the channel and systems business Snap owns will grow Adaptec. Snaps sales have reached into 60 percent of Fortune 500 companies in such verticals as automotive, chemicals, utilities, banking, pharmaceuticals, government and education; collectively, the two companies serve 90 percent of the Fortune 500, according to Mark Pollard vice president of marketing and business development.
The deal, which will include $91 million in cash and about $9 million in stock, is expected to add $40 million to Adaptecs bottom line over the next four quarters, Adaptec officials said. To read eWEEK Labs evaluation of the 3TB Snap Server 4500/Snap Disk 10 NAS combo, click here. The Snap acquisition, which is expected to close by the end of the month, is just the latest indication that Adaptec is serious about expanding its footprint in the storage market. Adaptec late last month acquired RAID products and intellectual property from IBM. But while that purchase appears to be geared more toward selling to OEMs, the Snap deal looks to fuel Adaptecs courting of enterprise customers. Adaptecs Delsman said he doesnt expect the new additions to overlap the JBOD (just a bunch of disks) and SCSI-based RAID, Fibre Channel and Serial ATA solutions that Adaptec acquired from Eurologic Systems over a year ago. The next step? Driving toward higher-capacity products and a possibly tighter alliance with Windows, suggested one analyst. "Theyre pretty much in the low end right now," said Brian Babineau, an analyst with the Enterprise Strategy Group in Milford, Mass. "They could expand the Snap protocol to Microsoft Windows worlds through a partnership or through the channel—thats one opportunity for them. They also probably could use some more sophisticated software to drive the systems, such as object-based storage." Click here to a review of Adaptecs iSCSI-based iSA 1500 Storage Array. Snap CEO Eric Kelly will stay on as head of Adaptecs new Snap Appliance division, and report to Adaptec President and CEO Robert Stephens. Editors Note: This story was updated to include information from a company briefing with eWEEK.com and opinions from analysts. Mark Hachman of eWEEK.com contributed to this report. Check out eWEEK.coms Storage Center at http://storage.eweek.com for the latest news, reviews and analysis on enterprise and business storage hardware and software.

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