Did IBM Do Due Diligence Before Making Diligent Acquisition a Done Deal?
I know everyone is hot on de-duplication these days, but I have to wonder about this acquisition. Is IBM just keeping up with the buzz or does Diligent deliver real value to the consumer? I will be on the con call at 2:30 EST to see what their thinking is and why this call is being handled by IBM's Tape and Archive Storage Group boss.
Okay, so the analyst call just finished and here are some of my key takeaways.
Customers are asking for de-dupe. InfoPro put it at Number 1 storage thing in November 2007, followed by VTL in the Number 2 slot. Diligent provides both.
Second, IBM says that customers don't want to build their own strategy, so they are looking to IBM to provide "pre-integrated solutions" for de-duping data on its way to VTLs or to archive repositories where these are established on spinning rust.
IBM says the key driver for de-dupe is data growth, most of which is driven by compliance-related retention and archiving. Consumers can use de-dupe to squeeze more data into the junk drawer without adding more capacity, energy cost, etc.
IBM wants to leverage Diligent in three areas: retention (tiered storage with policy driven data movement to archive), compliance (same as previous), "availability" (same as before but with some VTL sauce trickled in).
IBM says it did lots of due diligence, over a year evaluating other companies. "Best match" since DT is innovative, "in-line" (e.g., not a two stage process of de-dupe then ingest), extensible (base product does 450 mbps in a single node, but clustered appliances in the works that can double speeds and feeds; up to 1 PB of storage supported per node)
Also, Diligent is already in 200 of Fortune 500, so the assumption is that they have the attention of the big leagues -- and perhaps a golden rolodex.
IBM wants to add value to virtual tape products. Maybe a strategy for isolating other players (HDS and Sun) though everyone said that HDS relationship will be maintained ("With respect to Sun, it remains to be seen.")
Did I catch a twinge of sarcasm? "Most accounts using the Sun-vended Diligent solution are also IBM accounts. Who do you think the customer would want to buy the product from?" Some backpeddaling later however: "Sun accounted for 1-2 percent of DT revenues in 2007. However, this is projected to increase to 15% this year." Sounds like a relationship worth keeping.
What about De-Dupe services that are about to be offered in Tivoli Storage Manager? Greg Tevis of Tivoli Storage Technical Strategy was on the call and said the most intelligent stuff. He alluded to soul searching within the organization around whether two de-dupe solutions were needed -- the capability in TSM and the DT stuff. He seemed to have a pretty good handle on the fit for de-dupe in a purpose-built, service oriented storage architecture and understood my question about the difference between squeezing more bits into the junk drawer (tactical) versus sorting out the junk drawer (strategic). I like this guy.
They wouldn't disclose what they paid. They corrected press accounts that had EMC investments in the company pegged too high at 1.5%. They corrected, in advance, the inevitable Hollis observation that EMC tech was again finding its way into IBM. Doran Kempel went out of his way to establish that the factoring technology that is core to DT products was created after the split with EMC and that current technology bears no relationship to the EMC wares.
Asked of Doran and Moshe (the other ex-EMCer who came aboard with the XIV acquisition) would be sharing an office, the answer was a chuckle: he's in Israel, Doran is in the States.