Consolidation in the storage industry is in full stride as Hitachi Data Systems (HDS) announced on Wednesday that it had acquired BlueArc, its long-time partner for network attached storage (NAS) systems.
For the past five years, HDS had been an OEM customer for BlueArc's Titan Series Servers.
BlueArc makes high-end storage systems for managing unstructured data--files, spreadsheets, digital content and images--that are used by high-performance computing (HPC), oil and gas companies, life sciences and post-production digital content providers. It also specializes in storage systems that can attack big data, as do rivals such as EMC and IBM.
Hitachi, which previously only sold block-level storage, can now add the intellectual property of BlueArc to its portfolio. Hitachi needs BlueArc to supplement its block-based Virtual Storage Platform and Universal Storage Platform and to sell to the large customers that are outside of Hitachi's traditional grasp.
"We actually a lot of customers saying that 'We love the technology, but you don't really have control of your destiny because you don't own BlueArc,'" said Linda Xu, senior director of worldwide product marketing for File, Content and Cloud at HDS. "We have had some pushback from our largest customers, and understandably so. With the acquisition, we are able to offer enterprise guarantees and extend our reach into the HPC."
BlueArc's high-end NAS systems may, at first blush, seem to overlap with HDS's own HNAS. According to Xu, that's not the case. "We have been very successful with our OEM'ed product HNAS in the enterprise space, while BlueArc has been very successful in the high-performance workload space--oil and gas, life sciences, and research. So there is very little overlap, if any," says Xu.
The consolidation could be one of the last in a long line of storage acquisitions. In September, 2010, HP acquired 3PAR; in November, 2010, EMC acquired Isilon; in December, 2010, Dell snapped up Compellent; and, in June, 2011, Oracle reeled in PillarData.
There are few pure-play storage hardware companies left. Among them are EMC and NetApp and both of them have block-level and file-level storage systems. IBM also has block-level storage with its mid-to-high-end IBM System Storage DS8000 and file-level storage with its OEM partnership with NetApp for NAS systems.
For BlueArc, this was a good time to get acquired. While many in the industry assume that Hitachi amounted to a majority of its sales, last year revenues from Hitachi amounted to 41%, according to its S-1 filing for fiscal year 2011.
BlueArc, while it had received funding somewhere north of $200 million, couldn't dominate the NAS market on its own. It needed a partner. With the acquisition by Hitachi and its intellectual property girth, it has nailed that market down.
The cost of the acquisition was not disclosed.
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Deni Connor is founding analyst for Storage Strategies NOW, an industry analyst firm that focuses on storage, virtualization, and servers.