Continuing its efforts to re-build its presence in the storage market, Hewlett-Packard has said that it plans to buy privately held AppIQ, taking control of a very important supplier of SRM software.
HP did not disclose the financial details of the deal, which it said will close within the next 45 days. But according to one industry source, it will pay $270m for the company.
Storage resource management is a label for multifunction software that covers a wide range of task ranging from the administration of SAN gear to disk capacity monitoring and analysis. The sector now represents around one third of all storage software spending.
Founded in 2001, AppIQ has yet to declare profitability, and its reported sale price reflects the success that it has enjoyed to date. The company’s software is very well regarded, and AppIQ has already scored OEM deals with HP itself, Hitachi, Sun Microsystems and Engenio Technologies.
In August this year AppIQ said that its second quarter revenue was up 85% on the year, and that the number of its customers had risen around 30% to reach 250.
The acquisition by HP is unlikely to drive Sun, Engenio or SGI to abandon their OEM deals with AppIQ. Not only is there no obvious alternative source of SRM software, but AppIQ developed its software to be easily integrated with OEM partners’ other software a quality which has been exploited.
Neither Hitachi, Engenio or SGI were able to state their position by the time of going to press. In 2003 Hitachi took an option to take a stake in AppIQ. Hitachi has not yet revealed whether it had ever exercised that option. It may now be regretting that it did not buy AppIQ outright.
Part of AppIQ’s success has been the ease with which its software can be linked to other products, via its CIM-based repository, and J2EE interfaces, as ell as its SMI-S interface to storage hardware.
When HP began shipping AppIQ’s software early this year re-branded as HP Storage Essentials it stressed the integration of that software with its own server management software, delivering a common repository and sign-on. Now it has expanded on that pitch, and talked of future integration further up the stack, with HP’s applications and services management tools.
Until now, we’ve had to write around AppIQ’s technology in order to protect HP’s interests, said Frank Harbist, vice president and general manager of ILM and storage software for HP. Asaro said: When or if HP integrates AppIQ with all of its management platforms it will have something that is a nice competitive edge. But they need to get there and it will take some time.
AppIQ’s OEM deals have meant that its software covers a very sizeable chunk of the total SRM market. The deals will have eliminated the usual problem of zero track record facing start-ups selling high-end products, but they will also have returned limited margins. AppIQ may have decided that it would never have sufficient funds to develop its software enough to really secure its future, or match the offer that HP apparently made.
Later this year Storage Essentials will be integrated with HP’s base server and storage management tool called System Insight Manager. HP claimed that this integration is better than that between say IBM or CA’s SRM tools and their systems management products.