HP and IBM Security and Storage Moves

Hewlett-Packard Co. (HP) reported it is purchasing LeftHand Networks Inc., a provider of storage virtualization and storage area network (SAN) solutions, for $360 million.  Meanwhile IBM Corp. announced a SAN offering for its BladeCenter S servers and migration services for customers using HP's discontinued Identity Center security products.

Focal Points:

• HP signed a definitive agreement to buy LeftHand Networks for $360 million in cash. LeftHand Networks' solutions enable midsize companies and remote or branch offices of large enterprises to easily and cost-effectively protect critical business data. The privately-held company, which was founded in 1999, is headquartered in Boulder, CO, has 215 employees and more than 500 resellers and distributors worldwide. The company states it has more than 11,000 installations across 3,000 different customers. The transaction is expected to be completed in HP's first fiscal quarter of 2009. With the addition of LeftHand Networks to its stable of products, HP will add midrange offerings to its suite of iSCSI SAN solutions, as well as some intelligent cloning and data replication technology to its suite of intellectual property (IP) assets.
• IBM announced a blade computing storage breakthrough with its new high speed, SAS-based SAN for its BladeCenter S servers. RAID 0, 1, 5, and 10 are supported as well as the intermixing of 15k and 7.5k SAS disks. Microsoft Corp.'s Clustering Services (MSCS) and VMware Inc.'s ESX (including Vmotion functionality) are also fully supported. IBM also unveiled the BladeCenter Start Now Advisor and the BladeCenter Service Advisor. The BladeCenter Start Now Advisor provides clients a guided setup so they can set up the BladeCenter S chassis in 30 minutes or less, according to officials. The BladeCenter Service Advisor is an automatic "call home" feature that alerts IBM or the customer's authorized service provider to any issues. BladeCenter S starts at $2,599, which includes a DVD/CD combo drive, fans, power supplies, and rack rails.
• IBM revealed new migration services and competitive migration pricing for abandoned HP Identity Center security software customers. HP entered the identity management space with the acquisitions of Baltimore Technologies (2003), Trulogica (2004) and Trustgenix (2005) but announced this year that it was stopping direct business focus on identity management and would steer customers to other providers. IBM offers migration services through IBM's Internet Security Systems (ISS). ISS intends to convert customers from HP software to IBM's security offerings, such as IBM Tivoli Identity Manager, IBM Tivoli Access Manager for e-Business and IBM Tivoli Federated Identity Manager. In addition, the company also announced the IBM Tivoli Security Policy Manager, which is designed to provide customers the ability to develop centralized security policy management for managing application entitlements driven by compliance, data security and intellectual property protection.

Experton Group believes the demand for security and storage solutions will not slacken over the next 12 to 24 months even if the global economy stalls. Business volatility, regulatory requirements, and transaction levels across the globe will push the storage capacity and security and storage management limits at branches, data centers, and remote offices of midsize businesses and large enterprises.

 HP and IBM continue to move aggressively in the hotly contested small and midsize business (SMB) market and may be able to gain market share, given their ability to provide financing on top of their product and services offerings. Although HP exited the identity management space for now, Experton Group does not expect to see the company willingly lose the business to IBM but to work aggressively with its channel partners to compete. Since HP has been investing heavily in its software business, executives should not expect this to be the end of its interest in this space. IT executives should assess their security and storage requirements, and gain backing for and implement security and storage initiatives that will address their needs and pain points company-wide. The initiatives should cover the 2008-09 tactical challenges as well as the longer term strategic requirements that need to be funded and executed now regardless of market conditions.