The move gives DNF a new weapon with which to accelerate its iSCSI development aspirations toward larger enterprise deployments, and brings a broader cache of backup and Fibre Channel SAN (storage area network) optimization capabilities under its hood.
StoneFly Networks will act as a wholly owned subsidiary of DNF.
The company will be primarily responsible for pushing its business outside U.S. borders and expanding its turnkey iSCSI product line beyond entry-level and midrange offerings to include heftier SANs capable of scaling up to 100 terabytes, according to Mo Tahmasebi, president and CEO of DNF, based in Hayward, Calif.
Tahmasebi said he will operate as president and CEO of both DNF and StoneFly. StoneFlys current director of operations, Dennis Hergert, will stay on and run DNFs new storage division, which will remain at its San Diego facilities.
Demand for iSCSI is heating up as enterprises and even SMBs (small to midsize businesses) are building up their SAN deployments and want to enable data transfers and remote backups, as well as more easily manage their storage over longer distances at lower price points.
According to IT research firm IDC, based in Framingham, Mass., the iSCSI storage systems market will grow from $119 million in 204 to $4.7 billion by 2009.
DNF made a small investment in StoneFly last December, but at the time Tahmasebi deemed the joint venture to simply be a strong partnership. However, the acquisition officially answers any lingering questions of whether or when StoneFly would fall completely under DNF ownership.
Raising $34 million in funding over the last five years, StoneFly has struggled over the last 24 months to find additional funding to keep pace with large-scale storage vendors slowly encroaching on the iSCSI support arena or niche iSCSI competitors such as EqualLogic and Lefthand Networks.
Backed by its DataStor, FlexStor and StorBank storage products, DNFs technology portfolio includes SAN, NAS (network-attached storage), RAID, backup and iSCSI systems.
The organization began its existence in 1989 as a U.S. subsidiary of CSK Electronics, a Japanese IT company. CSK Electronics refined its strategy for DNF in 1998 by turning the hardware division toward storage. Less than a year later DNF was spun off as an independent, privately held company.