AppIQ & Engenio Join for Software

AppIQ Inc. and Engenio Information Technologies Inc. have banded together in a partnership that could boost them both (see Engenio, AppIQ Announce OEM ).

The companies plan to jointly develop monitoring software for systems that Engenio sells to IBM Corp. (NYSE: IBM) and other OEM partners. The software will analyze resources such as fabric switches, HBAs, and Engenio arrays.

Engenio hopes the software will differentiate it from competitors such as Adaptec Inc. (Nasdaq: ADPT), Dot Hill Systems Corp. (Nasdaq: HILL), and Xyratex Ltd. (Nasdaq: XRTX), which target the same systems OEMs as Engenio (see Adaptec Unveils OEM, Revs Guidance, US Dept. of Health Gets SANitized, and Have Patents, Will Travel).

For AppIQ, the deal adds a fourth storage system OEM partner -- following Hitachi Data Systems (HDS), Sun Microsystems Inc. (Nasdaq: SUNW), and Silicon Graphics Inc. (SGI) (NYSE: SGI).

The deal also represents the second piece of partner news this week for AppIQ. Its software is rebranded as the Enterprise Storage Manager (ESM) upgrade that Sun rolled out Monday (see Sun Shines on AppIQ, Sun Streamlines Storage , and Sun Hopes to Shine ). AppIQs SRM software is also included in Hitachi’s HiCommand and SGI’s InfiniteStorage suites (see HDS Expands Software, Services and SGI, AppIQ Ink OEM Deal).The Engenio deal is narrower in scope for AppIQ than its Sun and Hitachi relationships, but any partnership will help the software maker go head-to-head with titans EMC Corp. (NYSE: EMC) and Veritas Software Corp. (Nasdaq: VRTS), as well as CreekPath Systems Inc.

and Softek Storage Solutions Inc.

AppIQ claims more than 100 customers, and its CEO Dave Lemont says it's adding more than 30 per quarter. The company expects to benefit from Sun’s renewed storage push and Hitachi’s new TagmaStore system (see AppIQ Passes 100-Customer Mark and Hitachi Struts Mr. Universal).

“We’re still a startup, but now we’re starting to get that small company feeling,” Lemont says. “We’re closing in on profitability; it’s something we can see.”

Lemont says AppIQ’s goal is to move to the level of "big" software company, and do it soon. Some wonder if it will instead become part of a bigger storage company, as the startup is also seen as a potential acquisition target for one of its storage partners -- or one of their competitors. “If EMC really wanted to screw Hitachi, they would buy AppIQ,” one financial analyst mused.

But Lemont says AppIQ will continue as a competitor to EMC software -- and maintain its independence -- regardless of who makes overtures. He’s looking for an IPO, perhaps next year.“We go out of our way to discourage those talks,” he says when asked about an acquisition. “Our goal is to become a public company. We want to become a big software company, and the table has been set for us to be successful. We have a chance to be a $500 million to $1 billion [annual] software company."

Of course, nothing is certain when it comes to IPOs. For proof of that, AppIQ only needs to look at its new partner.

Engenio filed for an IPO to spin out of LSI Logic Corp. (NYSE: LSI), but backed off after pricing shares and finding them far below its target (see Engenio Gets Cold Feet).

Engenio hasn’t killed its IPO plans, but it's certainly put them on the back burner, particularly in light of a third-quarter revenue dip and long-term uncertainly over its relationship with IBM (see LSI Stands By Storage and IBM Still Loves Engenio).

— Dave Raffo, Senior Editor, Byte and Switch0