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Sun's StorageTek buy makes Sun a significant player in storage

Sun's StorageTek buy makes Sun a significant player in storage

On June 2, Sun announced its intent to acquire StorageTek in a cash purchase. At US$4.1 billion, this is one of the largest high-tech acquisitions in recent history, bigger than EMC's US$1.7 billion purchase of Documentum, although far smaller than HP's US$25 billion purchase of Compaq.

Historically, Sun has been a systems builder that also did storage, while SorageTek has always been a pure storage and storage services play. By any standard, Sun's acquisition of a company that brings in US$2.2 billion in storage revenue instantly makes Sun a much more significant player in storage.

Granted Sun now immediately gets a larger footprint in storage, but a deal like this is rarely just about buying market share. In this case, it is also about synergies.

At their announcement of the acquisition, the two companies identified the following as their "five points of alignment": software/management products, hardware products, management talent, global selling and service teams, development and operations teams.

Take the first two points as given: it is easy to understand the two companies' storage product sets as being complementary - Sun has focused on spinning disk in distributed environments, while a large piece of StorageTek's business is tape for the mainframe. As for the third point, it probably means more than that the two groups of execs enjoy drinking coffee together, but we'll have to wait at least two quarters to see if this is more than just an obligatory platitude.

Whatever. It is the last two points that are the really important ones.

For quite some time Sun has said it wants to invest more heavily in support personnel for storage. When Sun execs sign off on the acquisition they bring on board all of StorageTek's field expertise in storage, including sales, support and professional services. This is a pool of expertise - real, not virtual - of perhaps 2,000 people. That is a lot of storage experience, and Sun will want to make use of all of it. Also, these folks can help get Sun products a hearing in the mainframe environments they are already servicing.

The development teams will be able to work independently for a short while, but we should all expect Sun to fast-track connectivity between the various groups.

In terms of storage resource management, both sides of the deal are well committed to the SMI-S management standard, so they go into the new relationship with a common understanding of the need for using standards where appropriate.

Are the synergies really there? It certainly may be the case, but the success of groups that need to work together synergistically depends as much on the "soft issues" - personalities of the managers, corporate cultures, and so forth - as they do on the more tangible things. Insensitivity to such issues can lay waste to even the best laid out strategies. We will all follow this with interest.

In the mean time, at least two things are certain: first, this is a watershed event for Sun, as it provides the company with a proven access route to help penetrate mainframe environments; and second, once again Sun has made things interesting for the rest of the industry.


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