Scalable NAS Room

HP Acquires LeftHand Networks for Next-Gen iSCSI Storage

October 01, 2008

For $360 million, HP purchases a pioneer in second-generation, virtualization-ready data storage area networks (SANs) for midmarket customers. Will IBM follow suit with a similar acquisition? Many experts in the industry seem to think so.

Hewlett-Packard made the kind of acquisition Oct. 1 that IBM also is expected to make at some point: It bought a company, LeftHand Networks, a pioneer in second-generation, virtualization-ready data storage area networks for midmarket customers.

HP said it will make the deal for $360 million in cash.

The acquisition was not a big surprise to storage industry experts. LeftHand ranked among at least a dozen companies--a list that includes Data Domain, Compellent, Xiotech, 3PAR, Spectra Logic, Pillar Data Systems, FalconStor, Dot Hill and others--as innovative iSCSI-based storage vendors that exist as ripe targets for larger IT companies.

Dell's acquisition of EqualLogic in 2007 and IBM's purchase of XIV last January were similar strategic moves, although the jury is still out on the latter since precious little news has emanated since then from the XIV camp. The prevailing wisdom is that IBM is still looking to add some storage help.

LeftHand, founded in 1999, is located in Boulder, Colo. It has 215 employees and more than 500 resellers and distributors worldwide. The company has more than 11,000 installations across 3,000 different customers.

LeftHand's scalable storage software uses industry-standard, commodity-type hardware. Key features include intelligent cloning technology, which can substantially reduce the amount of disk space required for storage, and thin provisioning, which reduces power consumption by minimizing the over-provisioning of storage.

LeftHand also features advanced data replication technology with bandwidth management and failover protection.

HP has already made well-documented inroads into the small and midsize business and midmarket sectors with its smaller StorageWorks arrays. But HP obviously was not satisfied that it had enough storage options for smaller businesses.

"Those [SMBs and midmarkets] are just huge," Lee Johns, HP's marketing director for entry-level storage, told me. "LeftHand's SANs fit very nicely in between our Modular Smart Arrays [MSAs] and our Enterprise Virtual Array [EVA] offerings. If a midsize enterprise wants to scale up beyond, say, 48 drives, LeftHand is a good option."

One key to the deal is that HP plans to make good use of LeftHand's virtual SAN appliance, a plug-in storage product that doesn't need an IT specialist to install and run it.

"LeftHand gives us another strong entry into the midmarket and SMB sector," Paul Perez, CTO of HP's StorageWorks product line, told me. "They have very modular, scalable storage products with a loyal customer base and a very focused channel presence. They have invested a lot into their go-to-market engine, and it will be a great fit with our own. We will be protecting all of this."

"We've now bought a great canvas for HP to do some great storage art," Perez said.

The transaction is expected to be completed in HP's first fiscal quarter of 2009.