Softek Joins IBM

Becomes the newest addition to IBM's Storage and Data Services unit

January 30, 2007

3 Min Read
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In buying Softek today, IBM said adding the software migration vendor to its lineup will enable it to offer ready-made storage services. (See IBM Acquires Softek.)

Softek's flagship Transparent Data Migration Facility (TDMF) software is aimed at easing the process of moving data from one storage system to another reliably and without disrupting processing -- a problem that's increased exponentially along with the flood of data hitting enterprise networks. (See New Pills for Migration Headaches.)

Softek has had a 10-year partnership with IBM, which has escalated with Softek's performance. (See Softek, IBM Advance Partnership.) Softek's wares are OEM'd or resold by a range of other players, including Dell, EMC, Fujitsu, HDS, HP, and Sun. Competitors include Brocade; CA, via its acquisition of XOsoft; Double-Take Software, which recently went public; and Kashya -- to name just a few. (See Double-Take, Isilon Go Public.) The company claims over 10,000 licenses sold and counts British Telecom, KeyCorp, and Lufthansa among its customers.

IBM plans to sell Softek's products outright and as part of integration efforts and managed service engagements. IBM will retain most of Softek's employees in its Vienna, Va., office, including about 123 sales associates.

Softek CEO Steven Murphy, who has led the company since its 2004 management-led buyout from Fujitsu, will become a VP of data mobility solutions in IBM's Storage and Data Services business unit, which is part of IBM Global Technology Services.Murphy and Val Rahmani, GM of IBM Global Technology Services, welcomed Softek's 40-odd resellers into the fold, and despite competitive pressures, will encourage IBM partners to play a role alongside IBM's latest acquisition in client engagements.

Indeed, if there's a downside, it seems to be most likely to affect other IBM partners and resellers, such as Double-Take, which may feel the merger to be the proverbial slap in the face.

But for IBM, the move is the latest in a series of efforts to beef up services (seen as driving both software and hardware sales) in a range of areas, such as data warehousing and security -- for which IBM bought ISS for $1.3 billion in August 2006. (See IBM-ISS Deal Shows Rise of Information Stewardship .) In October 2006, IBM announced offerings in the areas of ILM, including data classification; storage hardware implementation; and (prophetically, it turns out) data migration.

Though terms of the merger are undisclosed, at least one analyst, who asked not to be named, says rumor puts the deal at $150 million. Softek reportedly had over $35 million in funding from a range of backers, including a syndicate led by Investcorp, Columbia Capital, and Needham Capital Partners, which helped take the company split from Fujitsu in April 2004. (See Softek Taken in Management Buyout and Softek Secures $10M.)

The company claimed steady and significant growth. (See Softek Claims 24% Growth.) Indeed, last year execs and board members were quoted as eyeing an IPO. Still, the merger appears to be a solid option that is meeting general applause."Softek will benefit all three of IBMs major product areas, providing additional offerings to the service team, new technology to the software business, and easing a customer pain point on the hardware side by facilitating data migration to new hardware platforms," coos Allan B. Krans of Technology Business Research in a note today.

IBM shares were trading at $98.41 in early afternoon today, up $0.95 (0.99%).

— Mary Jander, Site Editor, Byte and Switch

  • CA Inc. (NYSE: CA)

  • Columbia Capital

  • Double-Take Software Inc. (Nasdaq: DBTK)

  • EMC Corp. (NYSE: EMC)

  • Hewlett-Packard Co. (NYSE: HPQ)

  • Hitachi Data Systems (HDS)

  • IBM Corp. (NYSE: IBM)

  • IBM Global Services

  • Network Appliance Inc. (Nasdaq: NTAP)

  • Softek Storage Solutions Corp.

  • Sun Microsystems Inc. (Nasdaq: SUNW)

  • Technology Business Research Inc. (TBR)

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