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Sun Microsystems $4.1 billion bid to acquire StorageTek, set to play out this summer or fall, is proof that Sun is indeed serious about becoming a key player in the storage market.
Like all big transactions, Suns acquisition has its share of both risks and rewards. If successful, the acquisition will give Sun the storage resources it needs to become a force in the regulatory compliance market—and the ability to seize a large chunk of the storage market.
But theres a darker side to this proposed merger. With Suns revenues sinking, the push into storage was a gamble it could not afford to pass up. And if this acquisition turns out to be a multibillion-dollar failure, things will get really ugly for the company.
That said, I think the acquisition is more a sensible deal than a desperate ploy for revenue. StorageTeks extensive product portfolio includes enterprise-class disk arrays, gargantuan tape libraries and storage management software.
StorageTek will give Sun a wide array of products it can use to build compliance-friendly solutions—just as the need for compliance is forcing IT managers to upgrade their storage infrastructures to preserve their business data and make it more searchable.
These types of solutions are complex not only to build but also to maintain, so Sun also would be getting a financial boost from consulting and maintenance contracts associated with selling these solutions.
I recently spent a week at Suns labs in Newark, Calif., getting a look at the companys StorEdge 6920 array and its CIS (Content Infrastructure System). Based on what I saw, Sun is clearly working hard to create storage solutions that complement its servers.
Likewise, StorageTeks products would fit in well with the new CIS platform, which leverages Suns SAN file system technologies to automatically migrate reference data from expensive Fibre Channel-based disks to inexpensive SATA (serial ATA) arrays and tapes.
With StorageTeks products on its roster, Sun will be able to create compelling server-storage bundles that not only give customers their primary storage but also tend to their nearline, archive and backup needs.
Because Sun is already a major OEM of StorageTek, Suns employees and reseller channel are already familiar with many of its products, a key factor in making the acquisition run smoothly.
I dont doubt Suns ability to push its products out to Sun shops where IT managers have already invested in Sun software and servers. In these shops, having “a single throat to choke” when server or storage problems arise is a powerful tool to push sales and maintain platform loyalty. But for long-term success, Sun will have to be able to sell to shops where it is not the primary platform.
StorageTeks products are already being used in non-Sun shops, and Suns first priority should be to assure those customers that products developed after the acquisition will be strong for all server platforms, not just Suns.
A merged Sun-StorageTeks ability to woo non-Sun shops to its storage products will determine whether this acquisition is simply a bandage to stop Suns revenue bleed or a strong foundation stone for rebuilding its business.
eWEEK Labs Senior Analyst Henry Baltazar can be reached at [email protected].