IBM Grabs XIV

IBM has made its first storage acquisition of the year, snapping up Israeli clustering startup XIV for a rumored $350 million.

Although IBM will not disclose how much it paid for XIV, Israeli news outlet Globes values the deal at somewhere between $300 million and $350 million.

XIV's flagship product is its Nextra solution, a block-based system that clusters arrays built from standard components such as Intel processors and SATA drives. The startup has developed software to tie this hardware together using standard Ethernet switches.

The Nextra solution contains up to 1280 SATA disks and up to 1.3 Pbytes of storage capacity, according to XIV. By developing its own set of caching algorithms, the startup claims to offer higher performance levels than Fibre Channel-based storage systems.

"It will let us address emerging workloads like Web 2.0 and digital media," says David Vaughn, marketing manager for IBM storage.The exec explains that IBM will continue to target its DS and N Series product lines at high-performance, online transactions and database applications, but Big Blue sees a separate niche for the Nextra solution.

"It's [for] the type of applications where you need predictable performance, but not necessarily the ultimate type of performance," says Vaughn, adding that this will prove particularly useful for the likes of online video often found on Web 2.0 sites.

IBM is unwilling to divulge its long-term plans for the Nextra solution, although Vaughn told Byte and Switch that a new product is already in the works. "XIV will continue to ship Nextra under the XIV brand, and we will ship a product based on that architecture later in 2008," he says.

XIV has racked up around 40 Nextra customers since it began shipping the solution two years ago, although only one of these, Israeli financial giant Bank Leumi, has been made public.

IBM appears keen to keep this knowledge base intact, and the startup's 50-strong workforce, including its management team, will now become part of the storage vendor. "They are joining IBM and will remain in Israel," says Vaughn, adding that XIV's Tel Aviv HQ will remain open.The most notable member of the XIV management team is Executive Chairman Moshe Yanai, a former EMC chief engineer, who is regarded as the father of the Symmetrix system.

"Yanai's involvement in XIV lends the acquisition an almost automatic sense of gravitas," says Charles King, principal analyst at Pund-IT research. "He has got a great pedigree, and getting a player from one of your primary competitors is always a coup of sorts."

IBM rival EMC has already announced its plans to throw storage resources at Web 2.0 during 2008.

"Web 2.0 is a natural place for storage vendors to want to play," explains King. "If you look at some of the ways that digital surveillance, for example, is being used right now, that's a huge potential market."

Long-term, King also expects to see the Nextra technology built into IBM's recently announced "Blue Cloud" product line. "It's interesting that this XIV architecture could be used as a storage architecture for many of the applications that were announced in IBM's cloud computing initiative in November," he says.2007 was a busy year for IBM's storage division, with the vendor swallowing up a slew of firms. M&A included a $5 billion deal for data management specialist Cognos and $162 million paid for Canadian replication vendor DataMirror.

Other storage firms swallowed by IBM last year include Solid Information Technology, Arsenal Digital, Novus CG, and Softek, which were all acquired for undisclosed fees.

The XIV name is a reference to the fact that CEO Ofir Zohar and four other founders were members of the 14th graduating class of the Israeli military's elite Talpiot technology program.

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