Sun Seeks Benefits of Bundling with StorageTek Buy

With its $4.1 billion acquisition of StorageTek, Sun Microsystems will be able to bundle servers and storage as a complete package, much like IBM and Hewlett-Packard already do.

While taking many by surprise, Sun Microsystems purchase of StorageTek is largely believed to be a good move for the Santa Clara, Calif.-based company.

Sun has been struggling to compete in the storage world for some time—something the $4.1 billion acquisition of StorageTek might help rectify, said Michael Karp, a senior analyst at Enterprise Management Associates of Boulder, Colo.

"Everybody is going to have to stand up and take notice that Sun has just made an enormous commitment to storage," he said.

Although the company had begun to put more emphasis on storage, its sales force wasnt well-versed enough in the technology. As a result, Sun never seemed to gain the momentum it needed to succeed in the storage realm, Karp said.

But the acquisition of StorageTek (Storage Technology Corp.) may give Sun Microsystems Inc. the shot in the arm it needs: access to a cadre of storage sales, support and consulting experts, as well as the products it needs to round out its storage portfolio, he said.

And by being able to bundle servers and storage as a complete package, much like IBM and Hewlett-Packard Co. already do, Sun will be able to compete on a more level playing field, said Dianne McAdam, a senior analyst at Data Mobility Group of Nashua, N.H.

"Sun has been successful in the server business, so if they can bring in storage as part of the deal, they can chip away at storage-only vendors market share," she said.

The acquisition also will allow Sun to compete with companies such as HP, IBM and EMC Corp. for the biggest prize of all—dominance in the next-generation data center, said Arun Taneja, founder of Taneja Group of Hopkinton, Mass.

The next-generation data center will be built on the grid concept, Taneja explained—one that includes a virtualized pool of compute power, a virtualized pool of network bandwidth and functionality, and a virtualized pool of storage—all of which is triggered by the application and by SLAs (service-level agreements).

"But to make that happen, the equipment supplier must have control of more than just one piece of the puzzle, and thats what IBM, HP and EMC—and now Sun—are preparing themselves for," he said.

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IBM, HP and Sun must venture out of the server realm into storage to prepare themselves, while EMC must go up the stack outside of storage, Taneja said. With this acquisition, Sun is doing what it has to do—strengthening its traditionally weak storage offerings and data-protection capabilities, he said.

Its too early to tell how Sun will incorporate StorageTeks products into its portfolio or whether it will consolidate operations, but McAdam said she expects a combination approach.

"I would think that the engineering part of StorageTek that builds the tape robotics will probably remain in Colorado as a separate entity, since its a distinct side of the business," she said. There may be more consolidation in the product management side, she said, and less so on the product side, where there is little overlap.

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