With LeftHand Acquisition, HP Finally Becoming Serious in iSCSI
At a not so serious price: $360 million in cash
This is a Press Release edited by StorageNewsletter.com on October 2, 2008 at 3:35 pmHP has signed a definitive agreement to acquire LeftHand Networks Inc., a leading provider of storage virtualization and iSCSI storage area network (SAN) solutions.
LeftHand Networks’ solutions enable mid-sized companies and remote offices or branches of large corporations to easily and cost-effectively protect critical business data. HP has agreed to purchase LeftHand Networks for $360 million in cash, subject to certain purchase price adjustments.
Founded in 1999, LeftHand Networks is privately held and headquartered 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.
A pioneer of iSCSI SAN technology, LeftHand Networks delivers scalable storage software on industry-standard hardware that supports existing technology environments. LeftHand Networks’ portfolio extends HP virtualization solutions to the mid-market with software that runs on both existing storage and industry-standard server hardware, reducing training time and overall complexity. As a result, companies can move to a SAN for significantly lower cost, manage their data more easily, and scale their storage infrastructures incrementally as their businesses grow.
Additionally, for certain virtualized environments, LeftHand Networks’ intelligent cloning technology can reduce the amount of disk space required for storage by up to 97 percent, while its thin provisioning features reduce power consumption by minimizing the over-provisioning of storage.
In addition, LeftHand Networks also features advanced data replication technology with bandwidth management and failover protection. This makes it ideal for backup and disaster recovery operations between remote offices and a central location.
With the addition of LeftHand Networks, HP will add midrange offerings to its suite of iSCSI solutions. Customer needs at the low end of the market will be met with the HP StorageWorks All-in-One Storage System (AiO) and HP StorageWorks Modular Smart Array (MSA) product lines. The high end will be addressed by the HP StorageWorks Enterprise Virtual Array (EVA) line. Customers will further benefit since LeftHand Networks’ solutions are already certified to work with a wide range of HP products, including HP ProLiant servers, HP BladeSystem infrastructure, HP ProCurve Networking and HP Insight Control management software.
“Customers need a faster, less complex and more economical route to storage networking to better protect their critical business data,” said Dave Roberson, senior vice president and general manager, StorageWorks Division, HP. “The acquisition of LeftHand Networks significantly expands our storage portfolio, enabling HP to deliver customers an expanded suite of storage functionality, scalable capacity and interconnect options for every budget and performance requirement. With our strong channel and leading position in the industry-standard server market, we are ideally positioned to deliver this technology to customers worldwide.”
“Joining with HP is a natural fit for our customers and channel partners, giving them an expanded portfolio of server, storage and networking products and services that are already supported by LeftHand Networks’ solutions,” said Bill Chambers, chief executive officer, LeftHand Networks. “The combination of LeftHand Networks’ virtualization technologies with HP’s has the power to significantly accelerate server consolidation projects by making the deployment of shared storage much easier and more cost-effective.”
The transaction is subject to certain closing conditions and is expected to be completed in HP’s first fiscal quarter of 2009. Following completion, the business will be integrated into the HP StorageWorks division within the Technology Solutions Group at HP.
Comments
It seems to be a direct answer to Dell with its EqualLogic acquisition. Up to now, HP was a poor performer in the iSCSI SAN market, but the giant computer manufacturer is acquiring here a start-up being probably the number one independent firm in this fastest segment of the storage subsystems, much smaller but growing more rapidly than FC SAN and NAS, and with a bright future with the arrival of 10GbE.
IDC has evaluated this market at $916 million in 2007 and projects a CAGR of 36.7% until 2012 to reach $4.4 billion in 2012. LeftHand is even above this trend and announced a 110% year-over-year revenue growth in fiscal year ended June 30, 2008, with a total of 3,000 customers and 11,000 systems sold via 500 partners worldwide.
The company was founded in 1999 but entered into IP SAN when it bought pioneer North Fork Networks in 2002, a firm where was working Dr. Mark Hayden, current LeftHand’s Chief Software Officer. Its products are aimed at mid-range businesses, filling a gap for HP between StorageWorks All-in-One Storage System and StorageWorks Modular Smart Array in the low end, and EVA in the high end.
One of its strength is that it is completely focus on iSCSI SAN, nothing else, with a combination of:
- SAN/IQ management software, in its eighth generation, full of functionalities (virtualization, thin provisioning, snapshot, remote copy, etc), and for Microsoft, VMware and Citrix environments;
- disk array modules containing 24 SAS 15,000rpm HDDs for a 10.8TB capacity, dual active/active load balanced controllers, 5GB of cache, four 1GbE ports, redundant power and cooling.
LeftHand Networks’ SAN Appliances are used in a variety of production environments if you look at customers including Alcoa, Comcast, Oxford University, Los Angeles Valley College, JMP Securities, the London Stock Exchange (FTSE), Nikon, Pfizer, Time Warner Cable, UCLA, University of Maryland, the Army Corp of Engineers, Mitsubishi or Verizon.
LeftHand was one of the hottest storage start-up and could seriously consider an IPO. That’s the reason we think that $360 million, a big amount of money, is justify for a start-up that got a total of $75 million in financial funding according to our figures ($86 million for Venture Alert) . It’s a good deal for the investors, and for HP. Dell paid as much as $1.4 billion last January to get EqualLogic that had, at this time, less customers (2,500) than LeftHand but probably more revenues ($68 million). Currently, IDC estimates that Dell/EqualLogic is now the worldwide leader in iSCSI SAN, surpassing the revenues of NetApp and EMC. If this acquisition is correctly absorbed, HP will greatly reduce the gap with its rivals.
The other storage acquisitions of HP:
1999 Transoft Networks
2001 Compaq
2001 StorageApps
2003 Persist Technologies
2005 Schlumberger B'ss Continuity Services
2005 AppIQ
2006 Outerbay
2007 Opelin
2007 PolyServe
2008 Tower Software
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