In backup I believe there are two areas of need. The classic backup and recovery application and the VMware specific backup and recovery application. In the classic application the most often heard rumor is CommVault. They have a solid product and continue to execute well in the medium enterprise market. Who buys them though? The typical answer in the rumor mill is NetApp. I don’t see this happening. CommVault is going to exact a pretty high price point for their company and I’m not sure if NetApp is going to pay that. A more logical choice for NetApp may be *SyncSort, as the two companies already have a long-standing partnership. SyncSort’s Backup Express product takes specific advantage of NetApp capabilities and provides NetApp with relatively strong VMware data protection. I wouldn’t be surprised if this deal happened before the first half of the year is up.

Who then will buy CommVault? The best answer may be nobody, but that would go against conventional wisdom. EMC already has enough data protection solutions with the former Legato NetWorker products and Avamar. HP has Data Protector, but that application hasn’t set the world on fire, so they could be a candidate. Dell already has a relationship with CommVault and doesn’t really have an offering of their own so they could be a candidate. NetApp, as I said earlier, I think will buy SyncSort, so they are out. IBM has Tivoli Storage Manager (TSM), which also hasn’t set the world on fire, so they could be a candidate. Then there is Microsoft, long rumored as wanting into the data protection market, which has Data Protection Manager (DPM) and could justify CommVault to shore up its high-end. CommVault has always had a strong Windows data protection story so there is some synergy there as well.

This is a perfect storm that could lead to an all out bidding war for CommVault and possibly a significant consolidation of the data protection software market. The question with a CommVault acquisition is “who blinks first?”. If and when the bidding starts the process could get interesting, the first bidder could be at a disadvantage since they will have to show their hand first. Dell probably wants CommVault the most, but is also the least likely to pay crazy money. IBM also leans conservative and has a propensity to buy younger companies that are still in the start up stage (*Storwize, XIV as examples), not more mature companies like CommVault. Finally, IBM probably has a more ‘emotional’ investment in TSM. HP has shown they will pay crazy money for a company (*3PAR) and I don’t think has the same emotional loyalty to Data Protector. Microsoft is Microsoft and I can’t speculate what they might do but clearly if they wanted Commvault they have the ability.

In 2010 the HP acquisition of 3PAR led to a chain reaction of deals including EMC-Isilon and Dell-Compellent, which could continue in 2011 with *Pillar Data and Xiotech being the next most viable take over targets. If the SyncSort and CommVault deals happen, it could lead to a similar chain reaction ending with offers being made to companies like *Arkeia or VMware-specific data protection applications like *Veeam. 2011 looks to be a very interesting year for data protection software.

What does this mean for the actual users of all these products? Nothing much. If you are considering one of the companies listed above I think you’re still safe (as safe as you can get in technology). As I highlighted in my Information Week blog “Why All The Big Deals?”, in recent years large technology companies have gotten better at buying smaller companies, especially when the company being acquired is relatively mature. If you are considering one of the companies not listed or if these acquisitions don’t happen, you’re safe too, but just dealing with a smaller company, which in technology has proven not to be a bad thing. In either situation you first have to judge the technology on its merits alone, then factor in what value the company behind the technology brings to the equation.

In our next entry we will look at the solid state storage market which could be even more active than the data protection software market.

George Crump, Senior Analyst


: Backup Market

As a point of disclosure it is important to note that many of the vendors listed in this entry either have been or currently are clients of Storage Switzerland (indicated by “ * ”).