IBM, Network Appliance team on storage

In a move that could have far reaching effects on the storage industry, IBM has signed a deal to OEM all Network Appliance’s network attached storage and information lifecycle management products.

In return, Network Appliance will further integrate the IBM Tivoli Storage Manager to become its preferred back-up and storage management product and make IBM its preferred supplier of tape products.

The two companies announced the deal this morning in a teleconference with analysts and the press. While detailing the results of the deal, neither company would disclose the financial details.

The Network Appliance products will be re-branded by IBM and available in the second half of this year.

IBM and Network Appliance have big aspirations in signing such a deal. “We clearly have EMC in our sights,” says Andy Monshaw, general manager for storage systems at IBM.

Analysts reacted to the IBM/Network Appliance deal, saying that it would be significant in gaining market share way from EMC.

“It gives NetApp a major avenue into accounts that they never would have opportunities,” says Randy Kerns, senior analyst with the Evaluator Group. “It gives IBM a product offering to work for account control.”

“I think its fantastic for the both of them,” says Stephanie Balaouras, senior analyst with the Yankee Group. “For Network Appliance, it gives them a significant new channel to market and a partner that can bring their technologies into the largest data centers. For IBM, it really completes their storage offerings in iSCSI, NAS and nearline storage, in particular.”

IBM would not comment on the effect of the deal on Network Appliances deals with storage management vendor Appiq or its relationship with Hitachi Data Systems to resell Network Appliance gear. “The agreement between IBM and NetApp is not exclusive,” says a Network Appliance spokesman. “We do not expect changes to our existing partnerships as a result of this agreement.”

According to IDC, Network Appliance is the leader in NAS solutions, ahead of EMC. IDC anticipates this market will reach more than US$3 billion by 2008.

Asked whether a merger was discussed between IBM and EMC, Dan Warmenhoven, CEO of Network Appliance quipped, “We decided not to acquire IBM.” IBM refused to comment.

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