The big acquisition story of 2015 and 2016 (and surely the millennium thus far) was Dell/EMC, and there’s a good chance that won’t be topped for a long time. But, if there’s a single storage OEM that has made a big splash thus far in 2017, it’s obviously HPE. The technology giant made headlines in February with an announcement to acquire SimpliVity and a mere 18 days later (!) broke the news that it would acquire Nimble Storage.
Multiple questions usually come to mind when a major acquisition occurs, and most of them can be traced back to these two initial reactions:
- Why did this happen?
- How will it affect me?
In the case of HPE’s acquisitions of Nimble and SimpliVity, only time will tell. However, what we can do is refer back to a few marquis moments when a well-known IT company acquired a lesser-known yet more innovative technology.
HP buys 3PAR; Sept. 2, 2010 ($2.4 billion)
Remember 2010? It was a huge year for acquisitions, highlighted by Dell and HP’s bidding war for 3PAR and IBM’s purchase of Storwize. (Remember IBM storage???) HP obviously won the war, which prompted Dell to make a play for Compellent (more on that later).
So why did HP pick up 3PAR?
HP was losing market share and was considered an afterthought in the storage market with its EVA product line. 3PAR gave HP a legitimate contender to battle the likes of EMC VNX and NetApp in the highly-sought-after multi-protocol midrange space.
And how did it affect customers?
HP sales reps expectedly turned their attention away from EVA in favor of 3PAR. Will they now turn their attention away from 3PAR in favor of Nimble? After picking up SimpliVity, what will become of ConvergedSystem? In both cases, we’re waiting to see if HPE will shift its focus to the newly acquired technologies or if it will distinguish between them depending on the use case.
Dell acquires Compellent; Dec. 13, 2010 ($960 million)
Dell actually received $72 million from 3PAR as a “break-up fee,” as the two had at one time agreed on a deal that went south when HP upped the ante. Three months later, Dell bought Compellent.
Speaking of break-ups, Dell’s relationship with EMC (which consisted of Dell’s ability to resell CLARiiON with a Dell sticker) was dissolving, and it needed something like Compellent to stay relevant.
Effect on customers?
Dell innovated the new product line in part by adding a software feature that allowed for seamless data migration between arrays. Dell also took Compellent’s award-winning Copilot support brand and used some of its concepts to influence Dell’s support structure going forward, which had customers noting an improved support experience within 6 months. HPE is looking to do the same with Nimble’s award-winning InfoSight, which is an industry leader in predictive analytics. If HPE can pull this off, its customers will certainly see a benefit as well.
NetApp purchases SolidFire; Feb. 2, 2016 ($870 million)
NetApp, not really known for growing by acquisition due to its strong internally-developed software suite, bought SolidFire for its third flash solution.
Why would they do that?
Years earlier, NetApp rose dramatically in the storage market and had begun to threaten EMC. Unfortunately, it started losing market share and needed a truly innovative all-flash solution to regain some of it.
How were customers affected?
NetApp customers, especially those who had just adopted one of its other all-flash offerings, were left to wonder if they had made a mistake. SolidFire customers, on the other hand, now had NetApp—a company with whom they may have had no relationship previously—flooding their offices with a seemingly unrelated line of products to sell. Obviously, Nimble and SimpliVity users will meet a similar fate with HPE.
If you’re a Nimble, SimpliVity, or 3PAR user, there are several things to consider. What will happen to the product line you’re using? Will support get better or worse? Will the product undergo further innovation or be left in the dust in favor of the hot new item? Will HPE send its entire sales force to convert you even if you’re a happy EMC, Dell, or NetApp customer who happened to have a SimpliVity use case? What will HPE promote going forward, for which scenarios, and will it be consistent with that messaging?
As always (but probably more than usual), it’s an exciting and uncertain time to work in IT.