2010: The Year of Consolidation

Since more than a decade we analyze the merger and acquisition movement in the worldwide storage industry, which has allowed us the proper perspective from which to gauge the evolution over time.

Since 2006 with a record of 105 M&As for the year, the number of deals decreased yearly until 2010 with 57, or ten more than in 2008. And this year, there was big ones with four at more than $1 billion:

• 3par by HP ($2,350 million)
• Isilon by EMC (2,250 million)
• Numonyx by Micron (1,270 million)
• Division 5 Technology by Max Stiegemeier - GCF (1,200 million)

Then, not far from the billion of dollars, Dell bought Compellent for $960 million. The acquisition of Bell Micro by Avnet for $631 million was also a big event in the distribution industry. 2010 was finally a big year in term of consolidation as storage giants acquired mid-range companies to extend their offering with innovative technologies.

In 2009 there was only two deals above the billion dollar: Oracle acquiring Sun for $7,400 million  - not only for storage - and EMC getting Data Domain for $2,200 million.

Historically, EMC is the most voracious with 65 acquisitions since 1994, largely in front of Seagate with 27 and Symantec with 22.

Dell is number one this year and has acquired as many storage companies in 2010 than during its entire life (a total of 10 since 1999).

So Dell was the most prolific buyer last year with five acquisitions, followed by Avnet, EMC and Xyratex with three.

Last year, we were lucky to predict that the acquisition movement will accelerate in 2010. But now, we think it will be the contrary this year because the big ones will take a pause after spending a lot of money and taking time to digest their recent acquisitions, even if the consolidation will continue as some publicly-traded companies are in bad shape and because there are too many storage start-ups trying to survive and with the only goal to be acquired - or to dye.

Number of Acquisitions Since 1998
in the Storage Industry

1998	47
1999	57
2000	61
2001	64
2002	45
2003	51
2004	52
2005	74
2006	105
2007	87
2008	72
2009	47
2010	57

(Source: StorageNewsletter)

                             WHO BOUGHT WHOM IN 2010

   (Source: StorageNewsletter)

                                WHO BOUGHT WHOM IN 2010

    (Source: StorageNewsletter)