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Storage giant EMC on June 7 acquired its second company in 26 days, snaring privately owned nLayers, which specializes in application discovery and mapping software. The move continues a trend toward consolidation in the application-dependency discovery and mapping space.
EMCs acquisition follows Symantecs acquisition in February of nLayers rival Relicore, IBMs acquisition of Collation in November and Mercury Interactive Corp.s acquisition of Appilog in 2004.
On May 11, EMC, based in Hopkinton, Mass., acquired Interlink Group, a privately held IT services firm focused on Microsoft technology offerings. In November 2005, the IT giant swallowed Internosis, another Microsoft-focused IT services firm.
The EMC-nLayers deal was announced by EMC CEO Joe Tucci at an analysts conference in New York. Financial terms of the transaction were not disclosed.
EMC, which had struck an OEM deal earlier in 2006 with nLayers, based in San Jose, Calif., to resell its flagship nLayers InSight appliance, launched its rebranded offering at the end of April. The Application Discovery Manager is software sold under EMCs Smarts brand.
nLayers InSight is an agentless appliance that automatically discovers, maps, and models the relationships and dependencies between applications, servers and devices on a time-based, behavioral model. The acquisition will help round out EMCs already formidable ILM (information lifecycle management) software portfolio.
InSight uses patent-pending software called ABM (Application Behavior Modeling), which continuously discovers and monitors application components, resource dependencies, service levels and usage within data centers, an nLayers spokesperson said.
nLayers claims to be the industrys first complete CMDB (configuration management database) infrastructure solution—combining discovery/application-dependency mapping capabilities with reconciliation, federation, analytics and dashboards.
The acquisition of nLayers will enhance EMCs ability to conduct automated comprehensive root cause and impact analysis across all technology domains, including networks, applications and storage, a company spokesperson said. The acquisition is not expected to have a material impact on revenues or EPS for 2006, she added.
Over time, nLayers will better enable EMC storage management software to intelligently correlate, determine root causes and present a plan of action for critical problems across the entire IT infrastructure, the spokesperson said.
nLayers will become a part of EMCs Resource Management Software Group. Additionally, nLayers Israel-based R&D operation will contribute to the overall efforts of EMCs recently created Israel Software Development Center.
“This acquisition is a significant win for both companies customers,” said Gili Raanan, founder, president and CEO of nLayers.
“As application, network and storage domains continue to converge and become more complex, companies require insight into the behavior of these domains and how they drive core business services. Together, EMC and nLayers technologies will provide customers with a more powerful solution for managing their IT infrastructure information throughout the entire life cycle,” Raanan said.
At the analysts meeting, Tucci promised continued double-digit growth in EMCs core storage business, despite increased pressure on storage pricing. He also said that no fewer than five business units, those focused on virtualization, content management, resource management, storage virtualization and security, will all reach $1 billion in revenues.
Despite the two companies pre-existing relationship, EMC evaluated other players in the space before it decided to acquire nLayers, which has the best technology, according to Chris Gahagan, senior vice president of resource management software for EMC.
“What they have thats key is two-stage application discovery. The first is passive. [The appliance] sits on a mirror port [on a core network switch] and passively listens to network traffic to understand what processes are running on what server and how they talk to each other. It doesnt inject any load onto servers and you get a nice top-level view of your application infrastructure. From there you can decide where you want to dive deep, and then you can probe into the servers to get a wealth of information,” Gahagan said.
Such an approach requires much less overhead than competing agent-based technologies, and it can quickly prove its value in proof-of-concept deployments for prospective customers, he said.
Thanks to the OEM deal struck in the first quarter of 2006, EMC had already begun integrating nLayers technology with its Smarts root-cause analysis software for network and server availability management.
“We can map the physical infrastructure Smarts discovers on the IP and server side to those applications running on the servers. When Smarts detects an issue in the network or with the servers, now we can say that a root cause has an impact on these specific applications because we can link the two,” Gahagan said.
EMC is also working to integrate nLayers discovery and mapping with its new Storage Insight for Availability tool. “With this we now can map storage events back to applications affected by a storage event,” he said.
Beyond that, Gahagan said, EMC sees other integration opportunities in its backup and recovery product lines as well as for business continuity. “In the services-oriented world, an application is made up of multiple components on multiple servers. nLayers can build that [dependency] map that lets the backup product know which servers it needs to treat as a unified entity in that backup procedure. We found so many other ways to repurpose the information nLayers was providing,” he said.
In fact, such “enabling technology” as application dependency discovery and mapping can be used for a range of IT disciplines, said Dennis Drogseth, vice president at Enterprise Management Associates, in Portsmouth, N.H.
“Its polymorphic. It can support troubleshooting, asset and capacity planning, service planning, chargeback and cost, IT governance. Looking at where you can optimize to that design point is where the market is going,” he said.
Although EMC did not say how much it is paying for nLayers, Gahagan said he sees the acquisition over time as having a “material impact” on EMC revenues.
While nLayers had integration partnerships with BMC Software and the HP [Hewlett-Packard] OpenView organization, it had no other OEM arrangements. Gahagan said he believes those relationships are still complementary.
“Were more competitive with HP going up against Smarts. Those vendors will have to determine whether they want to change the relationships,” he said.
Still, the latest version of nLayers Insight adds new capabilities that set the stage for EMC to be able to enter the CMDB fray, pitting it squarely against HP, BMC and IBM.
“We have all the components that build out a CMDB. Now we are adding a reconciliation engine that lets us reconcile diverse data sources from diverse discovery elements. And we have new distributed collection capability and new CMDB dashboards,” said Bob Quillan, vice president of marketing at nLayers.
Insight Version 5, to be launched June 12, also adds the ability to federate nLayers data with other products to “integrate into a larger CMDB or provide the foundational elements for a CMDB,” Quillan said.
Whether the nLayers acquisition will serve to spur further acquisitions in the fast-growing arena is anyones guess. Independent players still standing include Tideways, Cendura, mValent and Troux, according to Enterprise Management Associates Drogseth.
No layoffs are planned as a result of the acquisition, Gahagan said, and nLayers founder Raanan is committed to staying with EMC to bring the technology forward.
Editors Note: This story was updated to include analyst comments and comments from EMC and nLayers executives.