Storage M&A Mill Grinds Into 2008

By Mary Jander, December 31, 2007 10:45 AM

While much of the world takes a holiday -- or at least serves light duty -- the wheels of commerce roll on for a few intrepid souls in the storage industry who seem bent on end-of-year mergers and acquisitions.

Within the last week, Double-Take acquired CDP player TimeSpring for $8.3 million; EMC announced intent to buy Xerox spinout Document Sciences for $85 million; and Dell revealed the acquisition of IT consultancy Networked Storage.

Yesterday, Israeli news outlet Globes Online reported that IBM is "in advanced talks" to buy grid storage startup XIV for $300 million to $350 milion.

Founded with $3 million by an ex-EMC exec Moshe Yanai in 2002, XIV was profiled by CMP sister publication Network Computing in a column last February. A would-be competitor to EMC, 3PAR, and other high-end array players, XIV reportedly has impressed customers with its technique for providing tier 1 storage on the cheap. With 35 employees, a minimalist Website, and an unknown number of customers, this startup could come from nowhere to threaten Yanai's former employer.IBM spokesman Charles Zinkowski refused to comment on the rumor this morning.

Meanwhile, reports continue to come from Tokyo regarding the potential sale of all or part of Hitachi Global Storage Technologies (HGST) by its Japanese parent. In the latest news, investment firm Silver Lake Partners is said to be mulling a majority stake, even as HGST halts manufacturing of small hard drives, which are being replaced by flash memory chips.

Expect more consolidation news in the coming days. After all, it's the start of a challenging year, and organizations everywhere will be hedging their bets against increased competition and reduced customer spending.

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