It was with some surprise that I saw the announcement that NetApp was acquiring Engenio this afternoon. There was a long ensuing discussion on Twitter on this topic and I have serious doubts about the added value of the combined entity. Here is why.
LSI’s primary go-to-market model has always been through OEMs and so they needed to have solutions that were feature rich enough to create a compelling value. Obviously, their disk arrays have the basic table stakes such as replication and snapshots, but Engenio was trying to do more. They wanted to create a modular array that could be extended with advanced software functionality to provide a unified storage platform. They acquired StoreAge with a goal of bringing storage virtualization into their controller and later OnStor to embed NAS functionality. Thus the end goal was clear – create an advanced RAID controller that could compete with the industry leaders and leverage their OEMs to go to market. Interestingly, this model is more similar to NetApp’s strategy then you might think.
NetApp’s core strength is their ONTap OS which powers their storage devices and incorporates the ability to provide simultaneous block and file access and a variety of other advanced software features. ONTap has been the key enabler of NetApp’s success and it is a technology that other storage vendors try to emulate. The same core ONTap technology is used throughout NetApp’s product line which allows them to better leverage their development efforts. From an architectural perspective, ONTap and its related applications (snapshot, replication, WORM, etc…) reside inside the NetApp head along with RAID functionality and the disk shelves in the system are simply JBODs. NetApp also sells a gateway product called the V-Series which is a head running ONTap which sits in front of third party RAID storage.
Looking at Engenio and NetApp’s product lines, it is clear that there is quite a bit of overlap. NetApp’s business is enabled by ONTap and the ability to provide efficient and powerful software features in their controllers. Engenio was trying to do the same thing. Why would
you want two different controller architectures to solve the same problem?
If NetApp does keep the Engenio controller architecture they risk diluting engineering efforts. Prior to Engenio, all engineering could be focused on ONTap and related software applications. Post Engenio, (assuming they keep Engenio’s controller technology) they will have to maintain two entirely separate controller architectures and code-bases which creates management complexities and dramatically weakens the ONTap everywhere story.
One Twitter user suggested that they could use NetApp V-Series heads with Engenio storage. That is absolutely true, but why would you? A V-Series head brings all ONTap functionality (snapshots, replication, WORM, etc…) to any supported storage and by doing so you no longer need those features in the disk array. Thus back-end storage for V-Series becomes a basic RAID-only solution. In the case of Engenio, the V-Series would turn an Engenio system into a commodity RAID device with none of the advanced features that Engenio has acquired or developed.
One industry analyst suggests that the acquisition is good because of the profitability of Engenio’s OEM model. Perhaps, but you have to wonder how the OEMs will react to this. If I am an actual or potential competitor to NetApp will I still want to OEM Engenio? It makes you question the longevity (and profitability) of the OEM business.
All of the issues above makes you wonder why NetApp bought Engenio. Why do you think they did it? Stay tuned for my hypothesis in part 2 of this post.