6 Comments

Summary:

In the last 18 months, Dell, HP, IBM and EMC spent almost $10 billion on data storage and warehousing companies. This all-out gold rush was driven by a massive consolidation wave sparked by Cisco’s entry into the server market and Oracle’s acquisition of Sun.

Pan for Gold Pays Off

Between July 2009 and December 2010, HP, EMC, IBM, and Dell spent almost $10 billion on data storage and warehousing companies including Data Domain, 3Par, Greenplum, Netezza, Isilon, and Compellent. This all-out gold rush was driven by a massive consolidation wave sparked by Cisco’s entry into the server market and Oracle’s acquisition of Sun, making storage the hottest liquidity sector of the last 18 months. 

Now that the technology giants have rounded out their storage portfolios, we turn our attention to the next areas ripe for potential acquisitions. These five sectors look particularly enticing for 2011:

Networking

Unfortunately, servers can’t magically glue themselves together in large clustered configurations for public or private cloud computing, but rather, rely on a complex array of networking gear to manage the traffic flow. This equipment may be the last stand against commoditization in the data center, and companies such as Arista, Nicira, and Embrane are pushing both the hardware and software barriers to more efficient solutions. Perhaps Cisco will release the M&A engine it has withheld from the storage market more aggressively on its home networking turf.

Cloud Platforms

Though HP, IBM, Dell, and Oracle have all positioned themselves as purveyors of cloud infrastructure, none of them have delivered a credible answer to Amazon’s EC2 Infrastructure-as-a-Service platform. VMware, OpenStack (sponsored by many, but primarily Rackspace), and Microsoft’s Azure provide similar capabilities, but it seems inevitable that the leading server vendors will want more control over how their products are consumed. So that leaves the smaller players ripe for the picking. Leading contenders include Cloud.com, Eucalyptus, Nimbula, and Joyent among others.

Big Data

We covered the commercialization of big data earlier this year, and since then, Cloudera and 10gen (behind MongoDB) have closed additional financing, and Riptano (behind Cassandra), announced initial financing. IBM and EMC recently bulked up on the last wave of big data and analytics with Netezza and Greenplum, but it’s only a matter of time until the uptake on this new class of big data solutions attracts enough momentum to merit a permanent home in a larger mega corporation.

Virtual Desktop Infrastructure

VDI has taken a crown, if not “the” crown, as an actionable infrastructure project atop virtualization. A combination of new infrastructure capabilities, proliferation of operating systems and devices, and incessant search for reduced costs has led to a VDI resurgence. We looked more closely at why Virtual Desktops Are Hot Again and see this area as a storage-centric deployment that will catch the attention of the tech giants once they digest their most recent acquisitions.

Cloud Gateways

In the grand scheme of storage, the cloud is the smaller but faster growing deployment method compared to on-site. The rapid rise in the number of objects on Amazon S3 to well over 100 billion is just one indicator of this. But conventional enterprises can’t move quickly to the cloud without a much friendlier environment to existing storage access mechanisms. Specifically, enterprises are used to block and file access to storage, not APIs. To fill this gap, a wave of companies promising gateways to cloud storage have emerged. Once again, with significant traction, several are likely to find homes either on the physical infrastructure or service provider side of the equation.

All in all, it promises to be an interesting year in 2011. Did we miss any must-watch sectors? Be sure to leave us your comments. And if you are interested in tracking big data more closely, be sure to check out the Structure: Big Data event coming March 23, 2011, in New York City.

Gary Orenstein is host of The Cloud Computing Show.

Related content from GigaOM Pro (sub req’d):

  1. First, thanks for the article. We are currently in the process of building some infrastructure to handle larger amounts of data. I can see that it is still the “Wild West” when it comes to cloud computing, but I’m betting the cloud won’t necessarily always need the data center. Are there there any solutions that involve distributed resources to local machines?

    Share
  2. What Comes After the Storage M&A Gold Rush…

    In the last 18 months, Dell, HP, IBM and EMC spent almost $10 billion on data storage and warehousing companies. This all-out gold rush was driven by a massive consolidation wave sparked by Cisco’s entry into the server market and Oracle’s acquisition …

    Share
  3. Jeffrey Snover Sunday, December 26, 2010

    “be sure to check out the Structure: Big Data event coming March 23, 2001, in New York City.”

    Presumably you meant 2011 vs 2001.

    Share
    1. Thanks for catching that, Jeffrey. We made the correction. And yes, we did mean 2011.

      Nicole

      Share
  4. [...] the acquisition trends that made 2010 memorable and that could shape up in 2011. As Gary Orenstein pointed out in a post late last week, there was a storage gold rush that led to scale-out storage vendors, in particular, finding new [...]

    Share
  5. Stuart Miniman Monday, January 3, 2011

    Gary – good stuff as always. The commoditization of networking is happening under the covers as more vendors move to off the shelf silicon http://wikibon.org/blog/commoditization-of-ethernet-switches-how-value-is-flowing-into-silicon/
    Mobile/Tablets have a big impact on many of the items that you listed.
    Also, what about the impact of Flash across enterprise and consumer tech?

    Share

Comments have been disabled for this post