News:
Making the headlines both left and right this week have been the rumor and then announcement that International Business Machines (IBM) purchased Israeli grid storage start-up, XIV.
Background:
According to XIV’s Company Profile on its website,
“XIV was founded in 2002 by five graduates of Talpiot, Israel’s preeminent military incubator for technology leaders. The company spent three years developing Nextra’s innovative technology prior to implementing the first customer system. XIV has built an outstanding team of storage and computing talent, including veterans of IBM, EMC, and other storage giants, and world-class engineers. All bring their vast best-practice knowledge to every aspect of the company’s endeavors. XIV is led by Moshe Yanai, one of the key architects of modern data storage.”
Analysis: What the media is saying and what you actually need to know
The sale of XIV to IBM is all over the news and blogosphere. Most articles have focused on different aspects of what is generally the same four things: IBM making this move to try to get an advantage over competitor EMC, how IBM gains not just a fast-growing successful company but a highly-regarded “brain” in the field and, sometimes, the actual benefits of XIV’s product, NEXTRA.
When the acquisition had just started to spark rumors earlier this week, while speculating on the at-the-time still-in-talks IBM-XIV acquisition, Mary Jander of the Storage Networking site, Byte and Switch, took the opportunity to sum up the major storage-related deals that IBM’s competitors, EMC, Dell and Double-Take have made. She also reminded everyone of the next major deal that will shake up the storage world, which is “a potential sale of all or part of Hitachi Global Storage Technologies (HGST) by its Japanese parent.”
While competition is one reason why IBM made this deal, the company’s internal development strategy shouldn’t be overshadowed by it. According to David Needle on InternetNews, IBM made the purchase to “address the demanding storage requirements of Web 2.0 applications and digital media.” Also, as it is soon after IBM’s purchase of Cognos, it shows IBM’s “more aggressive stance on intellectual property ownership.” Of course, solidifying the company’s storage strategy and, in the process, snagging up XIV Chairman, Moshe Yanai, an ex-EMC employee and technology storage legend, is pretty much the best of both worlds for IBM.
Moshe Yinai’s claim to fame in the technology storage world is his having “designed and built EMC’s key Symmetrix [now the “DMX series”] product line.” He is a legend and as having made his name with a major IBM competitor, the media, such as eWeek, has emphasized Yinai’s “changing sides.” Though it is a great story that will be interesting to watch unfold over the next few years, Yinai’s involvement is still only as XIV’s chairman, offering the guidance. He wouldn’t be back in the fold without the five young Israelis having started the company and developed its break-through product, Nextra, which, according to Duncan Riley on the Ajax-Blog,
“is a storage system based on a grid of standard hardware components. XIV will become part of the IBM System Storage business unit of the IBM Systems and Technology Group.”
Shaun Nichols on Venunet explains that,
“XIV’s flagship Nextra platform allows multiple storage devices and applications to be managed under a single system…The company estimates that Nextra systems are responsible for managing more than four petabytes of data worldwide… Big Blue plans to use Nextra as the basis for many of its future enterprise storage offerings.”
Indeed, aside from just publicity, XIV and Nextra, should provide IBM with a strong foundation for the trend of moving the enterprise onto the Internet and dealing with Web 2.0 in the coming years. XIV will remain and fully operate in Israel. Globes estimates that XIV was sold for between $300 million to $350 million after only having $3 million put into it.
Additional Resources
CIO.com: IBM Buys Israeli Storage Startup XIV
Congratulations to Moshe Yanai. I Hope the Shorts Fit.
Wanna make a quick $300 million? Sell your startup to IBM
IBM buys into massively parallel storage
An IBM developer’s perspective on the deal
A Forrester analyst’s perspective on the acquisition
EMC’s Vice President of Technology Alliances perspective on the deal
