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LSI Corp. acquired NAS vendor ONStor today, continuing the trend of storage acquisitions that likely will continue for at least a few more months.
LSI got a good price. It paid $25 million for a company that had close to $140 million in VC funding. But for now LSI isn’t talking about its plans for ONStor because it is in its “quiet period” ahead of its earnings report next Wednesday. An LSI spokesman said the company will talk about the acquisition on its earnings call.
But one thing is obvious. “Now LSI is in the NAS business,” StorageIO Group analyst Greg Schulz says. “LSI already sells storage to Dell, IBM, Sun, SGI and others. This is a golden opportunity to go in and provide a turnkey box to go in front of the boxes they already sell.”
ONStor was among the vendors talking IPO at the start of 2008, only to fall on hard times when the economy tanked. It completed a funding round of less than $10 million in December, with only existing VCs kicking in – apparently a move to keep it going long enough to get acquired.
ONStor also began a technology change this year, adopting the Zettabyte File System (ZFS) developed by Sun as its primary architecture and bringing out the ZFS-based Pantera LS2100 in April. The LS2100’s iSCSI support also brought ONStor into the multiprotocol storage market.
Because its NAS gateway is compatible with other vendors’ storage, ONStor has frequently partnered with SAN companies over the years – including Fujitsu Computer Systems, Nexsan, 3PAR, Pillar and LSI.
“That’s the appealing thing for LSI,” Schulz says. “They could put ONStor in front of any arrays.”
LSI sells its SAN systems exclusively through OEMs — mainly IBM – while ONStor has its own set of partners and sells everything under its own brand. That raises an interesting set of questions:
Will LSI sell NAS only through OEMs, or will it sell NAS through the LSI or ONStor brand?
Will LSI compete with its partner IBM on the NAS front, will it try to replace NetApp as IBM’s NAS partner, or will it offer IBM an alternative NAS platform?
With ONStor’s ZFS support and its own background as Sun’s midrange SAN supplier, will LSI go after the Sun midrange storage market if Oracle changes Sun’s storage strategy?
Will LSI use ONStor’s file virtualization capabilities as part of the SVM (Storage Virtualization Manager) platform it picked up in its acquisition of StoreAge in 2006?
Hopefully LSI will begin to shed light on some of these issues next week.