IBM, NetApp Ink OEM Pact

IBM will OEM NetApp's product line and phase out its own NAS wares

April 7, 2005

3 Min Read
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IBM Corp. (NYSE: IBM) will OEM products from Network Appliance Inc. (Nasdaq: NTAP) in a move aimed at battling the influence of EMC Corp. (NYSE: EMC) in the storage market.

Financial terms were not disclosed. The deal is not exclusive to either party. In a joint conference call with reporters this morning, Andy Monshaw, general manager of IBM Storage Systems, and Dan Warmenhoven, CEO of NetApp, described the arrangement as a "standard OEM relationship" in which the following items will unfold:

  • IBM will rebrand solutions based on NetApp's iSCSI SAN and NAS products, including NearStore, V-Series, and associated software, through its channels worldwide.

  • IBM will soon withdraw its 500G NAS product from the market. That product was first announced last August (see IBM Turns a New NAS Leaf Again).

  • IBM will more closely integrate NetApp software into Tivoli Storage Manager.

  • NetApp will get a wider channel network via IBM than it has with any other OEM.

  • NetApp will make IBM its "preferred supplier of tape systems" to business customers.

  • IBM and NetApp will look into "additional strategic opportunities."

The news is the latest volley in IBM's obsessive fight against EMC. It was characterized by both IBM and NetApp today as a move to match EMC's broad-based approach to enterprise storage market (see Tucci Touts ILM). "Customers want end-to-end solutions," says Monshaw. "We have not really had a full set of NAS offerings."

The alliance is also designed to rival the NAS deal EMC has with Dell Inc. (Nasdaq: DELL), as well as an earlier NAS alliance between EMC and Cisco Systems Inc. (Nasdaq: CSCO). (See Dell & EMC May Do NAS and Cisco & EMC Close NAS Deal.) It follows a slew of other announcements about NAS strategies from big SAN vendors (see Sun Delivers on NAS Strategy and NAS Up Next for Hitachi).

The news raises a lot of questions, many related to how the two companies will deal with potential competitive confusion from their new arrangement. IBM and NetApp have answered some of them open-endedly. Here is a sampling:

  • Q: Is this really the first OEM deal IBM and NetApp have had?A: Yes. IBM and NetApp have had a resale relationship before, but not an OEM one. NetApp's gFiler (now incorporated into the new V-Series, (see NetApp Makes Virtual Upgrade) has been sold by IBM and Hitachi Data Systems (HDS) as a NAS gateway for storage systems. "IBM was not OEMing any product from NetApp before today's agreement," writes NetApp spokesman Eric Brown in an email today.

  • Q: What about IBM's iSCSI SAN? Will that be discontinued, too, in favor of NetApp's IP SAN?

    A: IBM will not discontinue the sale of its own IP SAN, Monshaw says. That product resulted from an OEM deal with Adaptec Inc. (Nasdaq: ADPT). (See IBM Slips iSCSI Into SAN.) Monshaw offered no comment on how the two products may be presented non-competitively.

  • Q: How will IBM and NetApp square their competing virtualization products, namely V-Series and SAN Volume Controller?

    A: Monshaw and Warmenhoven denied any overlap when asked about this on today's call. Warmenhoven says the V-Series was complimentary to the SAN Volume Controller, and the two could be used together. "We believe virtualization is here to stay and customers want different approaches," says Warmenhoven.

    IBM and NetApp both released broadly worded strategy announcements about virtualization in the same recent timeframe (see IBM SVC Hits 1,000 Mark and NetApp Makes Virtual Upgrade). Given that both are committed to this area, it's possible they'll extend their relationship in this area. NetApp's latest virtual overhaul pointedly lacks EMC compatibility, though NetApp blamed EMC for the omission.

Bottom line? IBM and NetApp customers and resellers may not know for awhile how the two plan to resolve any competitive quandaries. For the moment, the message is they've formed an anti-EMC tag team, and they're open to doing more together.— Mary Jander, Site Editor, Byte and Switch

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