There are very few of us in high tech who will miss 2002. The economic slowdown meant that it was often a year of disappointment and one when we all relearned what it means to do more with less. Things were at least as challenging for vendors.
A few start-ups slipped beneath the waves and many of those that survived were acquired by larger companies. The strategy of Star Trek's Ferengis race for make-buy decisions (Acquire! Acquire!), which many pundits assumed had peaked in 2001, continued through 2002 as a few major companies continued to make significant investments. Obviously the trend still had legs (see here for an explanation of the Ferengi rules of acquisition).
Most big storage companies exercised their merger and acquisition portfolios last year, seizing opportunities to get their hands on storage resource management (SRM) players. Here are a few notable examples:
EMC bought Prisa for the latter's VisualSAN software suite, giving the storage giant its first set of tools for managing storage-area networks containing midrange devices. The configuration, performance and network management tools that EMC also inherited through the deal can also be expected to give the company a boost when (if?) InfiniBand becomes a viable option.
But most importantly, the acquisition will support EMC's efforts to go beyond its traditional base of storage-related products and services, helping it compete in the systems area where it feels a good piece of its future lies. Time will tell.
The Tivoli division of IBM snapped up SRM vendor TrelliSoft at the end of last summer. That company's StorageAlert package gave the larger firm a set of well-automated monitoring, alerting and reporting capabilities that should integrate well with Tivoli's existing management offerings. When the existing Tivoli interfaces are brought online for use by StorageAlert and become integrated with the rest of Tivoli's product line, the company is well positioned to become a major SRM playerAnd Veritas at year-end bought up Precise/WQuinn, an SRM vendor with good management capabilities for the Windows market. This continued an acquisition strategy that began 2002 by buying up The Kernel Group (for its Bare Metal Restore disaster recovery software), and continued into November with an acquisition of NTP's reporting software (for use with Veritas's own SANpoint Control product). Veritas will look to make its newest software as robust in the Unix world as it is with Windows.
Probably the most interesting aspect of all this industry reconfiguring was the obvious growing success of HP, as it digested with barely a burp the Compaq storage business (hooray for me for having predicted this in a column in September of 2001). Most significantly, HP not only grew market share, but the growth came from nontraditional HP IT sites, and at the expense of its chief competitors.
Why do companies the size of EMC, IBM and Veritas choose to acquire an SRM solution rather than develop their own? Time to market. Excepting the marketing hype associated with pre-announcements, time to market is a function of two key elements: development time, and the time it takes to build technology and channel alliances. There is value in being first into the marketplace, and whether the software was built in-house or acquired from another company is in the end a nonissue. In each of the cases listed above, companies were acquires, but early delivery and existing alliance structures were the real values that were delivered.
In today's world, time to market trumps everything.