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Market Madness

1:30 PM -- What kind of market is this? We're barely into the month of May, and over $800 million's already been spent on EMC's purchase of Kashya, Tacit's sale to Packeteer, and Quantum's purchase of ADIC. (See EMC Pays $153M for Kashya, Packeteer Buys Tacit, and Quantum Takes Tape Rival ADIC.)

At the same time, there's been an industry-wide slowdown in spending, and investment in startups is down compared to 2005. (See Storage Financials Take a Dip and Storage '06 Funding Down.) What's more, news of a Chapter 11 filing from SGI shows it's possible to land in quicksand, despite ongoing demand for networked storage.

Lessons learned? For one thing, this market is a landscape where suppliers who can't chart the terrain fail to gain the considerable ground that's open for staking.

There's plenty of opportunity: Not a day passes without news of new customer deployments of storage, switches, and software, by companies big enough to make a difference. But users are looking for consolidation and savings, and if a product or service doesn't offer that, or offers it less than the competition does, disappointment is inevitable.

Suppliers must be aggressive, anticipating what will be required in future products and moving to build or to acquire the technology now. In this light, May's combinations make sense: Tacit has wide-area file services (WAFS), which will add to Packeteer's WAN optimization to reduce customer headaches in remote site management. Kashya brings EMC the ability to use SANs for CDP and replication, instead of relying just on servers -- a clear path to simplifying replication for big networks. (See Users Push for CDP Shapeshift .)

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