History 2002: Several Start-Ups Find Buyers

The 250-odd storage start-ups we’ve counted have very few options: either try to get some return on their business as quickly as possible, given the current difficulties for finding new funding, or else to find an acquirer. As a result, it has become a buyer’s market, and would-be buyers are taking advantage in order to barter prices down as low as possible.

Here are the most recent acquisitions involving start-ups, in each case acquired by an industry giant:

Trellisoft by IBM
For undisclosed financial terms, IBM acquired the 30-employee SRM start-up TrelliSoft . The latter’s star product, StorageAlert, now integrated in Big Blue’s Tivoli Software division’s catalog, is a Java and Web-based software supporting multiple platforms to monitor the storage assets.

Andiamo by Cisco
Cisco Systems definitively purchased start-up Andiamo Systems, a multiprotocol switch and director manufacturer. This hardly comes as a surprise, since Andiamo was already a virtual subsidiary of Cisco, in whose offices it was located. The 270 Andiamo employees, led by CEO Buck Gee, join the Cisco storage technology group.

Pirus by Sun
Sun Microsystems snapped up Pirus Networks in an undisclosed stock-forstock transaction. Pirus, founded in 1999, had raised $55.2 million from several investors includind Comdisco, StorageNetworks and Veritas. The start-up had perfected a storage utility switch that enables the consolidation of blocks and files, along with FC and IP access on a single platform. Sun intends to use the application in its forthcoming N1 architecture that should allow for easy management of network storage. Pirus will become a Sun business unit reporting to storage executive VP Mark Caneopa.

Prisa and some assets of Cereva and Sanrise by EMC
Storage leader EMC really went off on a spree. First major purchase: Prisa Networks, an older start-up, dating from 1994 with more than 60 employees, purchased for a mere $20 million. The company is a spin-off of Applied Micro Circuits that benefitted from nearly $29.2 million in financing, notably from Compaq. The firm has developed a management software to troubleshoot and resolve SAN problems and to guarantee quality of service. The product was being resold by Hewlett-Packard, Overland Storage and most likely also Dell. EMC also bought IP and hired engineers from Cereva Networks, paying less than $10 million. The start-up closed its doors last June after raising $157 million since it was founded in 1998. Its portfolio included virtualization software. Finally, EMC bid (only) $2.5 million for certain software intellectual property of former SSP Sanrise, which filed for Chapter XI. Recall that Sanrise, based in Dublin, CA, raised more than $200 million. EMC, thanks to the deal, could also acquire a Sanrise software subsidiary in India.

This article is an abstract of news published on issue 177 on October 2002 from the former paper version of Computer Data Storage Newsletter.