Pundits Sort Out NetApp Acquisition of Engenio from LSI

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I’ve been scratching my head about NetApp’s recently announced acquisition of LSI’s disk business, but after digging deeper, I am now convinced that this move is a big deal for HPC.

You might not be familiar with LSI because they don’t sell directly to end users. Chances are though that you have brushed up agains their Engenio products from OEMs including Dell, IBMOracleSGI and TeraData and others. For more information on LSI and HPC, check out my recent podcast interview with Steve Hochberg.

Looking to the InterWebs, I found quite a range of responses to this deal:

  • It’s Revenge! Chris Mellor took the angle that NetApp CEO Tom Georgens is getting his due after trying to lead Engenio out of LSI’s Egypt back when he was at the company.
  • It’s Opportunity! Joe Landman thinks NetApp is out to compete against the Tier-1 vendors rather than doing co-opetition, which is fine because Scalable Informatics works quite well without Engenio components, thank you very much.
  • It’s Time for FUD! Nexenta asks five questions of LSI customers designed to make you wonder about everything from the low, low purchase price to IBM’s role in the deal.
  • It Makes Perfect Sense. Out of all the punditry, I got the most from Greg Schulz, who posted an excellent analysis of the deal and what it means for the storage industry:

What does NetApp get:

  • Expanded OEM and channel distribution capabilities
  • Block based products to coexist with their NAS gateways
  • Business with an established revenue base
  • Footprint into new or different markets
  • Opportunity to sell different product set to existing customers

NetApp gets an OEM channel distribution model to complement what they already have (mainly IBM) in addition to their mainly direct sales and with VARs. Note that Engenio went to an all OEM/distribution model several years ago maintaining direct touch support for their partners.

According to NetApp CEO Tom Georgens, HPC was one of the big reasons they wanted Engenio. That’s encouraging coming from a company that hasn’t come to an SC conference for years and years.


  1. Great comments and perspectives Rich oh and thanks for the mention as well.

    The HPC angle has not been talked about much in other venues, perhaps as it is not well known and thus out of their coverage or wheelhouse. Another topic which is tied into the above mentioned themes however not emphasized is beyond the technology, business relationships, finance is that of the people. NetApp will be gaining sales, field marketing and technical engineers familar with the OEM and channel integrator markets as well as those specfic environments including HPC. In addition to the field sales and marketing, there are the engineers, architects, QA and testing capabilties. So NetApp also gets people, process, product, pipelines, patents in addition to performance…

    Looks like you will be seeing the NetApp logo at SC in the future!