So the storage sector starts off with a bang when it comes to M&A, driving more consolidation in the market with Imation acquiring disk storage vendor Nexsan. Isn’t Nexsan the ATABeast storage company? How does one market a supposed enterprise class storage system ATABeast? I have to say, it was creative. I do give Imation a lot of credit for this move. It seems like they got a bargain. They picked up the company for $120M on $80M in sales (per some reports). I do think now, that the Imation marketing team will have its hands more full than ever before. I covered Imation when I was an Analyst with the Enterprise Strategy Group years ago. At that time they were primarily a tape company. Now they have a number of products that help with long term, secure data storage. I give the company a lot of credit in their transformation.

In just a few short years Imation has really done a lot to transform themselves, and quite frankly, on a very small budget. As an analyst, I witnessed the fact that they never really spend a lot on marketing or analyst services. That will have to change. There were a few comments around the announcement that Nexsan competes with likes of EMC and HP. They don’t. They have reasonably good storage products that fit nicely into the SMB or tier two or three in an enterprise. If they believe that they do compete with the likes of the tier one vendors then they will need to spend a lot of money on marketing to do so. I am also curious what they will do to sort out their overlapping product lines with things like multiple archiving capabilities. Imation has a strong data protection background and their play with Nexsan could very well compliment that as Nexsan has been touted in the industry as good “cheep and deep” storage for a backup repository. However one major downfall of Nexsan (as well as Imation), and probably why they would not be considered a tier one vendor is their lack of tier one features for enterprise class storage efficiency. Technologies such as data deduplication (in the true sense of the word, not file level or single instancing) as well as real-time compression, flash, and tiering are all requirements to really play at the high end and soon, given commoditization, this will be a requirement for the SMB as well. Placing data on cheap and deep storage is one thing, but maximizing storage usage is another. End users really need these storage efficiency features in order to get the best ROI they can from their storage. Customers can’t keep growing their storage footprint. Storage efficiency will be a big topic in 2013, especially with things like Big Data, Analytics and Cloud.

So my hat goes off to Imation. I do hope it was a good “out” for the folks at Nexsan. I know they tried to file their S1 a number of times so I hope this outcome is something that they are looking for. With Imation’s experience in the data protection space, I do hope they can figure out how to acquire and leverage some of these new and important technologies in order to help them grow beyond the SMB space. It will be a lot of work. Data is growing more and more every day, and Imation can help customers with that challenge.


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