Startup Swallows Smaller Startup

SAN management software startup AppIQ Corp. has acquired XStormTech Inc., a garage-stage outfit that has developed a storage resource management (SRM) application. AppIQ did not disclose financial terms of the deal (see AppIQ Acquires XStormTech).

The garage in question belongs to XStormTech founder Vijay Sarashetti, previously global engineer of applications and storage management at Deutsche Bank AG. He claims that he started his own SRM software company last year after examining the tools available in the market -- and finding none of them suitable for his needs. XStormTech, which has fewer than five employees, has no paying customers for its still-in-beta software.

Sarashetti, who will remain based in Helmetta, N.J., will head up the process of integrating his SRM software with the AppIQ suite. He will also serve as the liaison between AppIQ's software development team in Burlington, Mass., and its 10-member development and support center located in Hyderabad, India.

"This was definitely a technology acquisition," says Tom Rose, VP of marketing. "The fact that XStormTech was a very early-stage company was a positive for us, given one of the strengths of the AppIQ management suite is its tight integration across our entire solution... And lets face it, as a privately-held, VC-backed company, we can’t make large acquisitions anyway."

AppIQ has received $20 million in funding from Matrix Partners and North Bridge Venture Partners (see AppIQ Scoops Loot).The startup's headcount is currently around 65. Rose adds that the company is continuing to hire development, marketing, and sales personnel.

XStormTech's technology, according to Rose, overcomes the scaleability issues inherent in first-generation, file-oriented, SRM software, with the ability to scan millions of files in a few hours. "The first SRM tools didn't scale well -- it took two to three days to finish scanning the file system," he says.

AppIQ plans to release a version of its SAN management suite integrated with the XStormTech technology later this year.

— Todd Spangler, US Editor, Byte and Switch