The Storage Effect of a Microsoft/Yahoo Deal

2:00 PM -- If it materializes, Microsoft's stunning bid to buy Yahoo Inc. for $44.6 billion will have a lot of implications. There will even be something in it for storage managers.

Microsoft's pitch to buy Yahoo is based in part on the prediction -- given by Kevin Johnson, Microsoft president, platform and services, on a conference call this morning -- that the online advertising market will grow from $40 billion today to an estimated $80 billion within the next three years.

That means that storage products supporting online advertising and the Web 2.0 applications that typically serve as a context for it, stand to benefit.

Don't take my word for it: Cue EMC's recently announced Web 2.0 campaign. Consider ongoing Web 2.0 efforts by IBM and others. And note that on last night's very heartening earnings report, 3PAR CEO David Scott told analysts that Internet Web 2.0 was the second-biggest vertical market for 3PAR, after service-provider hosting. (Software as a service, anyone?)

Think, too, about how the major competition for this merger, Google, owns one of the world's largest distributed storage networks in the world, albeit one of the most mysterious.This merger, if approved, could also up the ante for data classification and search tools, which are increasingly deployed in a range of data management schemes. Microsoft's presentation on the Yahoo proposal refers specifically to the opportunity for Microsoft and Yahoo engineers to combine their expertise in creating "new community and social platform opportunities" and "an open platform for Web services."

By goosing storage sales and potentially adding to the roster of available data management tools for IT pros, a Microsoft/Yahoo deal might also help storage customers' budgets. First, there's the potential for price reductions in storage products like arrays as a side effect of greater demand. Then there are the potential upsides for existing Microsoft customers. (And who isn't a Microsoft customer of some sort today?)

We'll have our eye on this one, and not just because it's fascinating in a business sense. In the end, this could be a big deal for any storage customer.

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