NetApp to Buy Onaro

Network Appliance plans to buy SRM vendor Onaro during the first quarter of 2008 in a deal NetApp says won't be material to its financial results. When the deal closes, Onaro will be blended into NetApp's Storage Management and Integration Software division under the leadership of general manager Louis Selincourt. The division is part of the Networked Storage and Manageability Group, which is overseen by SVP and GM Suresh Vasudevan, who in turn reports to Tom Georgens, EVP of product operations at NetApp.

Terms of the deal were undisclosed, but Onaro has claimed profitability since 2006 and has received $9.5 million in venture funding to date.

The news comes after five-year-old Onaro expanded its storage automation capabilities in September 2007 and added virtual machine and file-based NAS monitoring to its largely SAN-based wares in early December.

Onaro claims more than 100 customers, with over 32 percent in "Fortune 50" enterprises.

NetApp's chief marketing officer, Jay Kidd, says his firm plans to retain "the majority" of the Onaro team, which comprises about 60 employees, though it's not clear whether that will happen in Onaro's Boston headquarters. NetApp has nearby facilities in Waltham, Mass., and will re-evaluate which facilities to keep once the deal is done."Onaro is staffed by an extremely talented group of employees, and we expect these employees to be a great addition to NetApp. The majority of Onaro employees will be retained and integrated into NetApp," Kidd stated in an email to Byte and Switch this morning. "For R&D teams we plan to develop and extend further the Onaro storage services management software technologies and grow on the strong foundation that the Onaro SANscreen software provides."

Kidd and other sources at both companies are mum on what the status of Onaro CEO Douglas McNary will be post-merger, though McNary indicated in a prepared statement that he's "looking forward" to joining the NetApp team. Also unclear is whether co-founders Roy Alon (VP of development and customer service), Assaf Levy (CTO), or Raphael Yahalom (chief scientist) will remain with the new parent.

"We're working out the details," NetApp's Kidd told Byte and Switch in an inteview this morning. The deal was not contingent on the executive team remaining, but NetApp is bent on retaining as much talent as it can, he indicated.

NetApp plans to incorporate Onaro's wares into its own SRM lineup for both NAS and SAN. Onaro's products will continue to be sold as is for a time, albeit with NetApp branding, and, over time, NetApp will examine how to integrate them further into existing or future products. NetApp plans to sell Onaro's SANscreen series with its NearStore VTL, V-Series, VFM, ReplicatorX, and Decru DataFort products.

"I am very excited about the breakthroughs we can achieve for our customers with the addition of Onaro to our manageability portfolio," said NetApp's Tom Georgens, in a prepared statement. "This deal is not just a first for the industry, but also a new opportunity for customers to rethink their large-scale storage infrastructures -- and gain extra confidence in the strength of modular systems to manage the biggest data challenges out there."NetApp emphasizes that the acquisition won't affect Onaro's strategy of heterogeneous storage management. "One of the real appeals of SANscreen is that it supports multivendor storage," Kidd says. "We want to build on that."

One Onaro customer, who requested that he and his Boston-based company not be named due to publicity policies, said he's surprised by the announcement, but pleased nonetheless. "I've been one of their customers back to the very early days. We use Onaro to monitor our Fibre Channel SAN, and we've always gotten great service," he says. But he expresses concern that some of that service may fall by the wayside now that a big non-local company has taken over.

Analysts seem impressed with the deal. "Onaro has mostly targeted EMC shops to date; this is a target market that is clearly in NetApp's crosshairs, and it will hope that ownership of a strategic management platform will provide it with leverage in such accounts," writes Simon Robinson of The 451 Group in an email today. "Onaro has proven itself capable of beating out the major players in some very large accounts. NetApp will be hoping to take that ball and run with it."

"This gives NetApp a broader stance in the marketplace," says analyst Mike Karp of Enterprise Management Associates. "It provides increased business analytics to NetApp."

Stay tuned for updates as more information becomes available.