GlassHouse Grabs Israeli Firms

GlassHouse Technologies is said to be buying Israeli storage firms MBI Advanced Computer Systems and Integrity Systems in an attempt to bolster its backup story and boost its presence on the other side of the Atlantic.

The storage service provider refused to comment on the deals, although a spokesperson told Byte and Switch that the firm will be making an announcement next week. There is also no information on financial terms of the acquisitions, though Israeli technology Website Globes estimates that GlassHouse paid a total of around $24 million for the two firms.

At least one analyst thinks that acquiring MBI and Integrity Systems would make perfect sense for GlassHouse. "This is very much in line with the direction they are going," says Mike Karp, senior analyst at Enterprise Management Associates. "They are trying to extend their IT consulting into additional areas, particularly storage."

MBI is a systems integrator specializing in areas such as security, virtualization, and backup and recovery. The vendor has a strong presence in both Israel and Europe, listing Unilever and telecom firm Orange as customers.

Integrity, which is MBI's sister company, sells software products for monitoring the performance of storage systems and backup processes. In 2002, Integrity licensed its Backup Operator Manager (BOM) software to Legato. Legato's software is now sold as EMC's NetWorker Operations. (See Legato Plays Nice With QLogic SANbox, Pacific Coast Picks Legato, and Legato Supports Windows .)Integrity claims to have more than 350 customers for its products, including Coca-Cola, Dassault Systmes, NDS, and the Israeli Defense Forces.

Increasingly, GlassHouse is focusing its attention on backup services. Late last year, for example, the firm signed a deal with insurer Health Insurance Plan of New York to overhaul its backup systems. (See HIP Chooses GlassHouse and GlassHouse Helps HIP.) This followed a deal to build a new storage and backup network for 12,000 students at the University of New Hampshire . (See GlassHouse Wins in NH.)

In March 2006, the vendor took the wraps off its Operational Support Services (OSS), which is essentially a managed service for firms that want to outsource their backup.

The acquisition of MBI and Integrity would represent a return to the M&A arena for Glasshouse after a two-and-a-half year hiatus. In 2004, the firm bought U.K. firms Source Consulting and Sagitta Performance Solutions and U.S. consultancies CycleBridge and the Storage Group. Back in 2003, GlassHouse also picked up around 330 customer support contracts from bankrupt NAS vendor Auspex. (See GlassHouse Picks Auspex's Bones, GlassHouse Buys Auspex Unit, and Auspex Shuts Down.)

More M&A activity is now likely, particularly in Europe, where smaller firms tend to get consulting services via their resellers, according to EMA's Karp. "A lot of [GlassHouse's] growth is going to have to come by acquiring other companies," he said.Whether the vendor is also looking to expand its partner list remains to be seen. GlassHouse has already racked up some big-name partners in the form of CA and HDS and recently announced plans to move into the email archiving market. (See HDS, GlassHouse Collaborate, CA, GlassHouse Team Up, GlassHouse Exec Ends Dry Run, and Glasshouse Offers Service.)

According to the Globes Website, MBI's CEO Doron Rosenblum and president Michael Burstein will become, respectively, general manager of GlassHouse Israel and GlassHouse's vice president of international development. Integrity's CEO Dan Zilberstein will reportedly become a senior exec within GlassHouse's Israel division.

— James Rogers, Senior Editor Byte and Switch