Storage giant EMC June 7 acquired its second company in 26 days, snaring privately owned nLayers Inc. and adding to the consolidation in the application dependency discovery and mapping space.
The deal was announced by EMC CEO Joe Tucci at an analysts conference in New York. Financial terms of the transaction were not disclosed.
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 Hopkinton, Mass.-based IT giant swallowed Internosis, another Microsoft-centric IT services firm.
EMC, which had struck an OEM deal with San Jose, Calif.-based nLayers earlier this year to resell its flagship nLayers InSight appliance, just 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 in a time-based, behavioral model. The acquisition will help round out EMCs already formidable information lifecycle management (ILM) software offering portfolio.
InSight uses patent-pending software called Application Behavior Modeling (ABM), which continuously discovers and monitors application components, resource dependencies, service levels and usage within data centers, an nLayers spokeswoman said.
nLayers claims to be the industrys first complete configuration management database (CMDB) 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 spokeswoman 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-cause and present a plan of action for critical problems across the entire IT infrastructure, the spokeswoman 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, nLayers Founder, President and CEO.
"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 lifecycle."
CEO promises double-digit growth
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 relationship, EMC evaluated other players in the space before it settled on nLayers, which has the best technology, according to Chris Gahagan, senior vice president of resource management software for EMC in Hopkinton, Mass.
"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," described Gahagan.
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, Gahagan added.
Thanks to the existing OEM deal struck in the first quarter, EMC has 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," said Gahagan.
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, 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," said Gahagan.
In fact, such "enabling technology" as application dependency discovery and mapping can be used for a range of IT disciplines, believes Dennis Drogseth, vice president at Enterprise Management Associates in Portsmouth, NH.
"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.
Material impact expected on EMC revenues
Although EMC did not say how much it is paying for the privately held nLayers, Gahagan sees the acquisition over time as having a "material impact" on EMC revenues.
While nLayers had integration partnerships with BMC Software and the HP OpenView organization, it had no other OEM arrangements. Gahagan believes the 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 Configuration Management Database (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," described Bob Quillan, vice president of marketing at nLayers in San Jose, CA.
Insight Version 5, which was to be launched on Monday, also adds the ability to federate nLayers data with others to "integrate into a larger CMDB or provide the foundational elements for a CMDB," said Quillan.
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 Drogseth.
No layoffs are planned as a result of the acquisition, and nLayers founder and Ranaan committed to stay with EMC to bring the technology forward.