Another Israeli Storage Start-Up Acquired by a U.S. Storage Giant: Onaro by NetApp
NetApp definitively acquires SRM company Onaro.
This is a Press Release edited by StorageNewsletter.com on January 5, 2008 at 3:26 pm
NetApp announced a definitive merger agreement to acquire Onaro, a
privately-owned company headquartered in Boston, Mass. Onaro’s
software, deployed in 32% of Fortune 50 companies, allows enterprises
to manage storage with the highest possible data availability at a
fraction of normal operational costs. The combination of NetApp and
Onaro will help enterprise organizations increase data center and
storage network efficiencies by proactively managing and optimizing
storage service levels for availability and performance in dynamic data
center environments. The predictive nature of Onaro products also makes
them ideally suited for modeling and forecasting data center and
service-level changes—capabilities that customers sorely need as they
upgrade, rethink, and deploy their next-generation data centers.
For NetApp, this deal signals a continued strengthening of the
company’s storage and data management software portfolio. NetApp has
rapidly expanded its storage management offerings over the last few
years and the addition of Onaro to the mix should be compelling to
customers who want one expert to help them with their storage
architecture challenges.
For existing NetApp customers, the acquisition of Onaro enables
powerful new storage service management and change management
capabilities. For Onaro customers, the acquisition brings to Onaro
products a significant R&D engine and financial strength to
significantly advance product development over the coming years. For
new customers, the NetApp and Onaro solution offers the opportunity to
effectively deploy and manage service-level large-scale storage
networks using cost-effective and highly scalable modular systems. They
no longer will need to rely on monolithic legacy systems that are
expensive and cumbersome in today’s era of rapid data center evolution.
"I am very excited about the breakthroughs we can achieve for
our customers with the addition of Onaro to our manageability
portfolio," said Tom Georgens, executive vice president, Product
Operations at NetApp. "This deal is not just a first for the industry,
but also a new opportunity for customers to rethink their large-scale
storage infrastructures—and gain extra confidence in the strength of
modular systems to manage the biggest data challenges out there."
Onaro extends NetApp vision and strategy for integrated data
management in the data center, whether using NetApp or other than
NetApp storage systems, and complements traditional SRM products. As
storage networks continue to grow, IT managers face an increasingly
complex challenge to document change, assess compliance to best
practices, and diagnose root cause in real time. Onaro’s products rise
to meet that challenge. An application-centric view of performance,
availability, and change management results in better levels of service
for each application on a storage network, making consolidation and
migration projects easier to plan for and manage.
"Eighty percent of all IT operational issues such as
application outages, performance problems, and downtime result from
unwitting change. Customers tell us they are being asked to commit to
almost impossible levels of service to avoid these problems, which
drain precious resources," continued Georgens. "They are looking to us
for a solution to obtain a better view and gain more control over their
storage systems, not just as physical devices but as a set of services.
With the addition of Onaro, our ability to provide the underlying
modular storage architecture as well as policy-based storage management
software will help enterprises commit to escalating service levels
required by their business in the near term and to proactively continue
to navigate changes in their data centers."
"We are excited and look forward to joining the outstanding
team at NetApp," said Doug McNary, president and CEO at Onaro, Inc.
"NetApp global channels and its powerful brand will accelerate Onaro’s
ability to address the growing worldwide demand for our products. Our
technologies and strategies are very complementary and will enable the
combined companies to offer customers comprehensive storage management
solutions for the data center."
Comments
Since many years, Israel has formed excellent R&D engineers in networking and most recently in storage networking. Few days after the acquisition of XIV by IBM, another Israeli storage start-up, based in Boston but with R&D in Israel, Onaro, has been bought by NetApp. Among the founders of the acquired firm, two of them were officers in the Israeli Defense Forces.
The amount of the transaction was not revealed but, according to several sources, it's around $120 million, a good price for the start-up's investors including Cedar Fund and Newbury Ventures that put only $9.8 million in the company since its inception in 2000 but was profitable since last year. This high amount is surprising as NetApp said it's not material to its business.
NetApp has already acquired another Israeli start-up, Topio, in SAN disaster recovery software, for $160 million in 2006.
What does NetApp will get? Onaro presents itself as a "provider of software that extends data center automation to storage with the goal of accelerating application delivery, reducing operating costs and trimming capital spending." In other words, it designs and sells an SRM software, SANscreen, that monitors storage network and was already interoperable with NetApp FAS. Recently, Onaro adds the support for NAS and VMware.
On his blog, Chuck Hollis, VP of Technology Alliances at competitor EMC, wrote interesting comments on the new deal:" Onaro carved out a nice niche around SAN configuration management. A few EMC customers with high-end SANs really liked what they did, and how they did it. They'd use Onaro for what it did well, and things like EMC's ControlCenter for what it did well... So, part of me likes it when two good companies connect. But is it a good fit? I don't think so, and here's why. Onaro's strengths are in large, mission-critical FC SANs. The bigger and the more important your SAN, the more you're likely to consider something like Onaro to handle config management and related tasks. Now, I don't know about you, but the phrase "large, mission-critical FC SAN using NetApp" is a bit of an oxymoron for me. Sure, they sell a decent amount of FC protocol to their customers, but they tend to be smaller, and certainly not mission critical. And, to the best of my knowledge, Onaro has little to offer in iSCSI management. If you look at the broader category of SRM, it's pretty obvious that Onaro (now NetApp) has a long ways to go before they could be considered seriously as a top-tier SRM player. Simply put: Onaro's products aren't targeted at NetApp's classic customers, and NetApp's products aren't targeted at Onaro's classic customers. I'd rate the strategic alignment part of this as 'poor'. One aspect might have made this more appealing to NetApp: Onaro has figured out how to support VMware well with their SAN config management tools, no easy trick. And, of course, anything with any sort of VMware affinity these days is incredibly appealing."
We have heard about SRM since many years, but few companies were successful in this sector. Was it too early, too proprietary software? The question also remains on what will happen to agreements that Onaro signs with HDS and others for its software. Onaro was also apparently courted by Cisco in 2005.
NetApp plans to keep most of the Onaro sixty employees but didn't precise what will happen to Doug McNary, CEO of the start-up since 2005 and who was many years ago VP sales at Tivoli before working at Trellix and Motive.
A partial list of Onaro's hundred customers includes AOL, CareGroup Healthcare System, JetBlue Airways, State Street Global Advisors, and Wyeth Pharmaceuticals, 32% of all of them being Fortune 50 companies.
Here are the storage start-ups founded in Israel and acquired these last years:
* Actona by Cisco
* DiskSites by Expand Networks
* Kashya by EMC
* Siliquent by Broadcom
* StoreAge Networking Technologies by LSI
* XOsoft by CA.
Which ones are in the position to be acquired in the future?
* Continuity Software
* Diligent
* Exanet,
* FilesX
* Sanrad
* Storewize











