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History 2003: NetApp Acquires Spinnaker

For $300 million

In June 2003, Spinnaker Networks announced SPEC SFS benchmark results which show its SpinServer 4100 to be the highest-performance and most scalable NAS solution, better even than enterprise- class products from NetApp.

Last month, NetApp acquired this privately-held NAS competitor for its software expertise at a price of $300 million in an all-stock transaction.

The start-up venture, working on distributed file systems, was founded in 1999 and raised a total of $51.4 million. It employs 83 people, including 60 engineers, and installed 75 systems in the first 3 quarters of 2003, to 20 customers for sales of about $2 million in the year.

The integration of the 2 companies with fairly similar cultures shouldn’t pose too many problems.

NetApp plans to retain all of the startup’s staff, which includes, in particular, veterans of IBM’s Pittsburgh Lab (formerly known as Transarc), and more importantly, of Carnegie Mellon University (CMU), both of which, like Spinnaker, are located in Pittsburgh, a magnet for major experts in file systems (including another significant operative in the field, Panasas). Ron Bianchi, Spinnaker CEO, and former professor at CMU, will head what is slated to be NetApp’s 5th R&D center, in addition to those located in Sunnyvale, CA, Waltham, MA, Morrisville, NC, and Bangalore, India.

To expand an offering it calls “Storage Grid,” NetApp also looked closely at other start)ups, including Panasas and Isilon Systems.

I watch them carefully,” said NetApp VP Patrick Rogers, who is in charge of partners and alliances.

He felt, however, that the former company is too focused on specific markets such as energy, while the latter isn’t as far along as Spinnaker.

NetApp is probably the first firm to use the term ‘storage grid.’ The computer grid is already a common term, as a means to distribute the processing of large applications between the processors of several remote systems. The idea here is to also have a more unified view and management of storage.

But they are two dimensions of the grid,” Rogers adds. “A little cloud inside the data center across the LAN, like Spinnaker, and a big cloud across the WAN where we also focus, for disaster protection, remote caching, snap, mirror on another location.”

Included in the Spinnaker package is a NAS hardware that won’t be pursued, but more interestingly the NAS SpinFS OS global distributed file system, with its ability to cluster up to 512 servers or nodes seeing a single pool of storage that can be called a storage cluster, while the current NetApp OnTap OS can handle only 2 filers.

The ultimate goal is to combine the two OSs into one, but this heavy task is not expected to be completed for another 2 years.

SpinFS is fairly close to IBM’s StorageTank, which Rogers describes as “a great proprietary distributed file system, with 2 differences: it has to be interoperated with all the OSes, and we will not put ourproduct in the server but in the storage.”

Alliances with Cisco, NetApp, FileNet and … Documentum
NetApp’s acquisition strategy is clear: the company is investing for technology, not for connectivity, storage management, DLM or even an application such as ILM.

Nor is it acquiring for revenue, as some have argued EMC has done. For the latter areas, the company is insisting on a policy of strategic alliances only, at greater and lesser levels, as illustrated by recent agreements to push its NAS/SAN offering.

10% of our business is SAN, mostly in combination with NAS,” said the VP. “I can tell you exactly, that’s my job. We currently have 114 companies with active partnership that we manage today.

With Cisco Systems, this takes the form of a reseller agreement of all the MOS 9000 switches, “because the only way you can buy a Cisco switch is to go through four sources: IBM, HDS, EMC, HP. We will be the fifth one.”

With Veritas Software, the uncontested backup software leader with which NetApp has been working for ages, it’s the opportunity to resell NetBackup with NearStore D2D secondary storage subsystem, and to combine Veritas DLM with SnapLock software that makes NearStore a write-once engine.

NetApp is also currently working with Ilumin and KVS for email archiving, since, according to Rogers, Veritas has no offering there, and he believes the software company may soon make an acquisition in this area.

As for ILM, again to push NearStore, with some 11PB of the latter solution installed among 400 customers, NetApp has recently reinforced its accords with FileNet, and more surprisingly, Documentum despite the latter’s recent acquisition by EMC.

For FileNet, the accord simply covers certification of FileNet software on NetApp’s hardware platforms.

We actually have a map of partners that we are going after on top of our ILM strategy with 40 companies. And we have relationships established with about 3/4 of them. We got much deeper partnerships since EMC acquired Documentum, for example with Ixos, KVS and FileNet,” elaborated Rogers.

The latter firm, incidentally, is a veteran company dating back to 1982, initially working in 12-inch WORM optical discs and libraries, before turning to workflow and enterprise content management software. It’s worth about $350 million per year, compared $275 million for Documentum. It’s slightly amusing, today, to see FileNet forsaking its origins, stating now that it aims “to replace existing optical storage with faster, more reliable magnetic disk-based WORM storage.”

This article is an abstract of news published on issue 191 on December 2003 from the former paper version of Computer Data Storage Newsletter.