Opsware Opens Up on Storage

Server and network automation specialist Opsware, which reported its Q4 and full year results today, is getting ready to launch its first storage product during the next couple of months. (See Opsware Announces Q4.)

The software vendor, which picked up storage firm Creekpath last year, is also ramping up its M&A strategy, spending $30 million in cash for process automation startup iConclude today. (See Opsware Acquires iConclude, Opsware Gains CreekPath, and Storage Shopping Spree.)

Speaking on a conference call this morning, Opsware CEO Ben Horowitz promised that the launch of the vendor's Application Storage Automation System, built on Creekpath's technology, is imminent. "We will be shipping the initial release of that in the second quarter," he said, adding that this is not expected to generate much revenue until Q3.

In the meantime, Opsware posted revenues of $101.7 million for the full year today, up 67 percent from the prior year but below analyst estimates of $102.05 million.

On a non-GAAP basis, the vendor reported Q4 earnings of 3 cents on net income of $3.5 million. Quarterly earnings were in line with analyst estimates, and were unchanged from the same period last year. Net income was down slightly from $3.6 million in the year-ago quarter.Including $1.1 million in prior acquisition charges and $4.1 million of stock-based compensation, Opsware posted a GAAP net loss of $1.7 million or 2 cents per share for the fourth quarter, up from 16 cents and $16 million in the year ago quarter.

Opsware CTO Tim Howes told Byte and Switch that storage will be high priority for the vendor during the coming months as it looks to tie server, network, and storage automation together. "Storage is growing the fastest of any of the infrastructure silos within IT," he said, adding that, initially, Application Storage Automation System will be sold as an add-on to Opsware's Server Automation System.

Eventually, the storage software will be sold as a standalone product, with iConclude providing some of its monitoring capabilities. "iConclude could be used to communicate with a monitoring system such as Tivoli or OpenView to inform it that an HBA is being reconfigured or a SAN switch is being reprovisioned," he explained.

Opsware is also eyeing the IT Infrastructure Library (ITIL) opportunities presented by iConclude's Run Book Automation products. (See CA Supports ITIL and Orange Launches ITIL Support.) "It has tons of ITIL process stuff built in -- it's like ITIL out of the box," said Horowitz on this morning's call.

Essentially, ITIL locks down service levels for specific applications such as email and provides detailed procedures for systems and storage management, although some IT managers have voiced their concern about the burden of yet another compliance hassle. (See ITIL Irritates IT Managers and CA Accelerates ITIL Adoption.)That said, Opsware is trying to carve out a niche at the nexus of servers, storage, and networking devices, and tap into user demand for a single interface to control their entire data center. Other vendors, such as HP, which bought AppIQ, and IBM, are also pushing into this space, although there is currently no silver bullet to address this issue. (See Config Combo Conundrum.)

IT managers and CIOs have complained that they are still on the lookout for software that can configure both network and storage devices. This would eliminate the manual configuration errors that cause the bulk of system failures. (See Storage Left Out of CMDB Loop.)

As far as the iConclude acquisition is concerned, Howes told Byte and Switch that the bulk of the startup's 45-strong workforce will be moving over to Opsware when the deal closes in May. This will also include CEO Sunny Gupta and the bulk of the iConclude management team, although CFO Kurt Shintafeer will not to be joining Opsware, he said.

Opsware is also planning to close iConclude's Bellevue, Wash., HQ and shift the startup's staff over to their own site in nearby Redmond.

The Opsware CTO was less forthcoming on the vendor's future M&A plans. "We're always looking, but we have nothing else to announce today," he said.The market was not exactly overwhelmed by today's announcements. In early trading, shares of Opsware dropped 1 cent (1.43 percent) to $6.88.

James Rogers, Senior Editor Byte and Switch