Feb 27, 2007 (12:02 PM EST)
HP's Planned PolyServe Buy Is Expected To Boost Storage Offerings

Read the Original Article at InformationWeek

Hewlett-Packard plans to buy storage virtualization software maker PolyServe, giving HP the technology it needs to boost its storage offerings by leveraging its fast-growing blade server business.

The computer maker said Monday it had agreed to buy the software maker, which has 117 employees and 500 customers. Financial details weren't disclosed. The transaction is expected to close in roughly 60 days, when PolyServe would become part of HP's StorageWorks division in the Technology Solutions Group.

The acquisition would enable HP to offer customers better technology for consolidating file servers and databases on blade servers, which are easier to manage than other server hardware. HP in October introduced its first blade storage servers.

In tying its fast-growing blade server line closer to its storage business, HP has the chance to boost sales in both markets, Technology Business Research said in a research note on Tuesday. "TBR believes the acquisition will put more teeth into HP's offerings and improve the product-level connection between HP's rapidly expanding blade server market and the company's storage business," TBR analyst Stuart Williams said. In the fourth quarter of 2006, HP blade server revenue grew 45% year over year, while storage revenue increased 3%.

IBM last year led the worldwide blade server market, followed by No. 2 HP, according to Gartner. IBM, however, could feel more competitive pressure following the PolyServe acquisition, since it will have to battle HP's strengths in two areas: data virtualization and blade servers, TBR said.

The PolyServe acquisition also gives HP control over one of the few virtualization technologies available for the leading enterprise databases, including Microsoft's SQL Server, Oracle, SAP, MySql, and PostgreSQL. "This is a key strategic addition to the HP software strategy of enabling and managing the application, middleware, and database offerings of the traditional ISVs," Williams said.

HP sells its storage software under the StorageWorks brand. The company's storage hardware includes its ProLiant servers. The PolyServe technology is expected to complement these brands, as well as HP Services.