Microsoft acquires maker of secure file access software

Microsoft Corp. further advanced its push into the data storage space yesterday with the acquisition of XDegrees Inc., a small, 2-year-old company in Mountain View, Calif., that makes software that enables secure access to information stored across enterprise systems.

Terms of the deal weren't disclosed, and Microsoft declined to comment on the acquisition beyond a prepared statement.

"XDegrees' focus on delivering solutions for distributed information access has natural synergies with Microsoft's focus on storage," said Ben Fathi, director of Windows file services technologies at Microsoft. "As we continue our drive toward making Windows the best platform for advanced data storage, having the XDegrees' team and know-how on board will be extremely valuable."

Michael Tanne, CEO of XDegrees, said his company's software permits continuous access to resources, regardless of where they are, without having to deliberately address a given disk or file system.

"Our system allows you to have a name or link to that file system, just like a URL, and when you click on that link, you get the file," Tanne said. "You didn't have to know or think in advance where that file is. You reference the file by its link or its name, and the location of the file is abstracted away from the user."

XDegrees' technology assets and some members of its 14-employee team, many of whom are graduates of Stanford University, will be relocated to Microsoft's campus in Redmond, Wash., effective immediately. Tanne said he won't be joining Microsoft, but an unspecified number of the company's engineers plan to do so.

XDegrees was acquired by Microsoft's core file services group, which is headed by David Thompson, a corporate vice president, according to Tanne. He added that his group obviously has ties to the enterprise storage group formed late last year under Microsoft Senior Vice President Bob Muglia.

Analysts have been speculating for months about the direction Microsoft's product plans will take in the storage space. Since Muglia took the reins of the company's newly formed enterprise storage group late last year, that group has been quiet about its plans.

Muglia's group is charged with developing "a cohesive product and business strategy for the evolution" of Microsoft file systems, network-attached storage, storage-area networks, backup, continuous availability, near-line storage and storage resource management, according to Microsoft's Web site.

A Microsoft spokesman said earlier this year that Muglia's group would be considering partnerships and potential technology developments. But beyond that, no business decisions had been made.

Laura Koetzle, an analyst at Forrester Inc. in Cambridge, Mass., said the XDegrees software should be useful technology for Microsoft, with its ability to insert a "virtual logical file system layer" between users and their various storage disks, creating a unified view that is searchable as a single resource.

"I'm not sure how terribly strategic it is, but it'll certainly be an incremental improvement over the existing Microsoft .Net file system technology," she said.

Koetzle said Microsoft currently has a distributed file system that lets users put together existing shared storage resources and create an additional shared resource that can then be searched.

Bill North, director of storage software research at Framingham, Mass.-based IDC, speculated that there will be tighter integration between the way applications deal with data and the way the Windows operating system stores the files and associated information for applications.

"There's a lot of room for improvement in that area in all the operating environments out there today," he said.

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