IT Direction

Description

will Dell try to acquire another firm engaged in the enterprise storage segment of the industry? That's a potential scenario presented from investment firm Oppenheimer & Company, which issued a report speculating on possible M&A activity in storage after HP's winning $2.4 billion bid for 3Par, a Fremont, Calif.-based data center storage vendor. At least one analyst at Oppenheimer believes that Dell might be the most aggressive vendor in the storage merger and acquisition scene. A report from investment adviser Oppenheimer & Company suggests that Dell might enter the enterprise storage area networking segment by trying to acquire Brocade Communications Systems, Compellent Technologies or CommVault Systems. Oppenheimer analyst Ittai Kidron says in his report "We expect Dell, which we view as weak overall within the enterprise segment, to continue to aggressively expand its enterprise storage presence and perhaps even venture into networking a bit more. HP is more well rounded, but could also add a few pieces to the puzzle. We believe IBM, EMC and NetApp could be active but are likely to be less aggressive given their position and relative portfolio completeness." Brocade has been rumored to be an acquisition target for the past year or so. Company CEO Mike Klayko has sought to deflect talk of Brocade being acquired, however, and has done so for many months now. And while all of this is happening, EMC lacks a true scale out network-attached storage platform, according to Kidron. As a result, EMC may be looking at Isilon, another enterprise storage networking firm. Overall, Oppenheimer sees the most likely M&A moves as Dell acquiring Brocade or Compellent Technologies or CommVault, and EMC Corp. acquiring Isilon Systems. Brocade would provide a strong storage-area network switching business and solid Ethernet installed base to Dell, enabling the server company to move upward in the enterprise and the data center, Kidron suggests. Another potential storage option for Dell is Pillar Data Systems Incorporated, and possibly data warehousing players Teradata Corp. or Netezza Corp., Kidron states. "We still believe that Dell is in the most pressing need for further M&A and we think it could expand into networking to become an end-to-end player," Kidron added. And that would make sense, especially after it lost out to HP in its agressive bidding war for 3Par. "We think Isilon is the best fit for EMC with strong scalability and momentum in high-end virtualized environments," the Oppenheimer report states. EMC could also pursue private player Caringo for digital content storage, the firm added. For its part, IBM doesn't have an immediate need to extend its storage portfolio but it does lack an in-house iSCSI product, Oppenheimer notes. It may make a play for some of the smaller iSCSI vendors, such as BlueArc, DataCore, FalconStor and Nimbus Data Systems, as well as a data warehousing company like Netezza, Oppenheimer says. NetApp isn't expected to make much of any noise in M&A since it already offers "a fully baked unified storage platform," says Kidron.

Products & services

Similar companies nearby