NetApp Grabs Topio

Drops $160 million, following EMC's recent data protection pickups

November 9, 2006

3 Min Read
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Network Appliance moved to beef up its data protection software today by acquiring replication startup Topio for $160 million. (See NetApp Pockets Topio.)

Topio is NetApp's answer to EMC's $153 million pickup of replication and CDP startup Kashya last May. (See EMC Coughs Up for Kashya.) EMC plunked down another $165 million on data de-duplication vendor Avamar last week. (See EMC Picks Up Avamar.)

Topio's Data Protection Suite (TDPS) enables replication between different vendors' hardware, a capability NetApp plans to use to let customers replicate and migrate data from EMC, Hewlett-Packard, and Hitachi Data Systems arrays to its own.

NetApp also intends to build Topio's replication into its NearStore Virtual Tape Library (VTL) and SnapVault remote office backup products. Like EMC did with its recent acquisitions, NetApp is looking to beef up its disk-backup capabilities.

"I guess they're trying to keep up with EMC," analyst Greg Schulz of The StorageIO Group says. "People may compare it to EMC buying Avamar because it's fresh in our minds, but where Topio really comes into play is against Kashya."Patrick Rogers, NetApp VP of products and partners, says the difference between Topio and Kashya is that Topio supports host-based and iSCSI storage while Kashya only supports Fibre Channel SANs.

"Kashya is SAN-only," he says. "This covers all types of storage, primary data center or remote office."

But why would NetApp pay $165 million for technology it already had access to as a partner? Since August, TDPS was integrated with NetApp's Data OnTap 76 operating system and FlexClone software that replicates data between NetApp systems. (See Topio Replicates NetApp.)

Apparently, NetApp's management sees an opportunity to grow a promising product line. "We can accelerate the growth of this technology," Rogers says. "What's most important is the development team. They come from the IBM mainframe world, and they're good at doing efficient wide area replication." Rogers says NetApp can put more resources into sales and developing future releases of the product that Topio would be able to on its own.

Regarding the value of Topio, one source with knowledge of the company says it was generating "a few million dollars" in revenue each quarter, mostly through a partnership with IBM Global Services, which is likely to continue under NetApp's management. Topio had $21.1 million in funding over three rounds, with the last round of $8 mllion coming in April of 2005. (See Topio Taps $8M.)"NetApp paid a lot," says the source. "But they may have been feeling the pressure after EMC got Avamar."

NetApp expects the deal to close in December. Rogers says Topio's 60 employees, including founder and CEO Yoram Novick, will be offered jobs. NetApp will retain Topio's R&D site in Haifa, Israel, and the employees in Topio's Santa Clara, Calif., office will move to NetApp's Sunnyvale office.

Dave Raffo, News Editor, Byte and Switch

  • World Cellular Information Service (WCIS)

  • Hewlett-Packard Co. (NYSE: HPQ)

  • Hitachi Data Systems (HDS)

  • IBM Corp. (NYSE: IBM)

  • Network Appliance Inc. (Nasdaq: NTAP)

  • The StorageIO Group

  • Topio Inc.

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