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AN ACQUIRED TASTE

From STORAGE Magazine Vol 6, Issue 8 - October 2006

Forget the LURID headlines about what’s been happening in the football transfer market. FAR MORE ENGROSSING IS THE FLOOD OF TAKEOVER DEALS within the storage industry. THESE ARE BEING HAILED BY THOSE INVOLVED AS GOOD NEWS. BUT ARE THEY REALLY?

In a move that has come as no great surprise, Tandberg Data has acquired the US data storage company Exabyte Corporation for $28 million. The merged company, with an anticipated revenue of $215 million for 2006, will be the second largest player in data storage, OEMs not included. Meanwhile, Emulex Corporation was well along the path to finalising the acquisition of Sierra Logic, as Storage magazine went to press.

First then, Tandberg Data and Exabyte. The combined operation means that Tandberg Data will be able to offer a broad range of advanced storage and automation systems to small and medium-sized enterprises that are looking to protect ever more commercially-crucial business information, it claims.

"Tandberg Data and Exabyte complement each other well, in terms of both products and markets, and will jointly take a clear second place," comments Tandberg Data chief executive Gudmundur Einarsson. "A more advantageous size will give us better opportunities to build something even stronger, to the benefit of customers and shareholders.

"This merger opens opportunities that the two companies on their own could not have succeeded in realising in the short term. That's important at a time when the computer industry is characterised by a powerful process of consolidation. We find that our dealers constantly want more complete answers to data security. With Exabyte's technology, we'll be able to offer better solutions for data storage and automation."

"The complementary strengths of the two companies in the various geographic markets around the world will result in a truly global competitor in the storage industry," states Tom Ward, CEO at Exabyte. "In addition, the combined product portfolios of the two companies will provide our customers with the full range of state-of-the-art, cost effective products and technologies to meet their needs."

Meanwhile, Emulex Corporation is to acquire Sierra Logic, a leading provider of embedded ASIC components and firmware solutions for enterprise storage systems. The acquisition expands Emulex's position in the market for embedded multi-protocol storage products. Sierra Logic's current product portfolio, which includes embedded bridges and routers, enables connectivity of low-cost Serial Advanced Technology Attachment (SATA) disk drives within Fibre Channel-based enterprise storage systems. Further, these products are deployed by many OEMs globally in conjunction with Emulex's existing InSpeed embedded switches and I/O Controller (IOC) products to provide a fully complementary embedded end-to-end solution.

"This acquisition solidifies Emulex's embedded multi-protocol strategy," says Paul Folino, chairman and CEO of Emulex, "and is another critical step toward becoming the market leader in the end-to-end embedded storage components market. The expansion of our embedded product portfolio also provides incremental revenue opportunities and we believe extends Emulex's addressable market for embedded storage components to more than $800 million and the company's total available market to $2.7 billion by 2009.

"Further, it builds upon our prior acquisition of embedded switch supplier, Vixel, as well as our joint development efforts with Intel. Together, Emulex and Sierra Logic will provide our OEM customers with embedded solutions for the full range of enterprise server and storage systems."