Bill Snyder
TechWeek: An Appetite for NetApp
11/19/05 - 09:44 AM EST
In fact, they already are. NetApp's bread-and-butter is a niche (albeit a big one) called network attached storage. Simply put, NAS, as the technology is known, is used to add storage to a network by simply plugging in a dedicated box. The box, in turn, makes the data readily available to users on the network. EMC generally plays in a related area called storage area networks, which store huge amounts of data off the main corporate network. EMC also has a hand in NAS, notably at the high end of the market. But in August, EMC bought privately held Rainfinity for about $90 million. Rainfinity sells a product that allows administrators to "virtualize" NAS storage, which means data can be stored anywhere, while appearing to be stored locally, and that should resonate in the midtier. The NAS market is worth pursuing. In 2004, it totaled $1.4 billion, and it's expected to grow at a compounded annual rate of 8.8% through 2009 when it will reach $2.2 billion, according to Gartner, a Connecticut-based market research and technology consulting firm. Meanwhile, NetApp and IBMIBM have signed a partnership deal that could give the storage vendor much broader distribution. A similar partnership between EMC and DellDELL has been a big success, and the new alliance could help NetApp tip the scales a bit. "Potentially, it's very significant for NetApp," says Chuck Jones of Atlantic Trust Stein Row. However, IBM's product partnerships haven't always been much of a help to the junior partner, he adds. Even so, IBM's forays into the NAS market have not been successful, so Big Blue should be motivated to make this alliance a successful one, said Jones. Like Funk, Jones sees the company as a longer-term play. "I don't expect to see much upward movement in the stock in the next three or six months, but further out -- nine or 12 or 18 months -- it looks strong."
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