HP acquires LeftHand Networks 1 October, 2008 By Vanessa Ho

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The deal, valued at $360 million in cash, sees HP acquire LeftHand's portfolio of iSCSI SAN technology that delivers scalable storage software on industry-standard hardware that supports existing technology environments.

"The iSCSI market is a fast growing market and we felt we could accelerate our presence in that market with LeftHand," said Lee Johns, director of marketing of entry storage with HP.

Also, acquiring LeftHand Networks extends HP's virtualization solutions to the midmarket with software that runs on both existing storage and industry-standard server hardware, reducing training time and overall complexity.

"[Virtualization] is another high growth area that allows us to provide much better server and infrastructure solutions for virtual deployments that leverages [LeftHand] technology because they have a software-based architecture that already runs on our ProLiant platform," noted Johns.

As well, he added that LeftHand has been an OEM partner of HP, which makes their products complementary to the company's existing infrastructure.

"The acquisition of LeftHand Networks significantly expands our storage portfolio, enabling HP to deliver customers an expanded suite of storage functionality, scalable capacity and interconnect options for every budget and performance requirement. With our strong channel and leading position in the industry-standard server market, we are ideally positioned to deliver this technology to customers worldwide," added Dave Roberson, senior vice-president and general manager of HP's StorageWorks Division, in a statement.

With the addition of LeftHand Networks, HP will add midrange offerings to its suite of iSCSI solutions. Customer needs at the low end of the market will be met with the HP StorageWorks All-in-One Storage System (AiO) and HP StorageWorks Modular Smart Array (MSA) product lines. The high end will be addressed by the HP StorageWorks Enterprise Virtual Array (EVA) line. Customers will further benefit since LeftHand Networks' solutions are already certified to work with a wide range of HP products, including HP ProLiant servers.

"Joining with HP is a natural fit for our customers and channel partners, giving them an expanded portfolio of server, storage and networking products and services that are already supported by LeftHand Networks' solutions," stated Bill Chambers, chief executive officer of LeftHand Networks, who will report to Robertson after the deal closes. "The combination of LeftHand Networks' virtualization technologies with HP's has the power to significantly accelerate server consolidation projects by making the deployment of shared storage much easier and more cost-effective."

In terms of the channel, Johns said that HP will take the best of both companies' channel programs and also leverage HP's huge channel infrastructure worldwide to bring LeftHand's solutions to the mid-market space.

The transaction is subject to certain closing conditions and is expected to be completed in HP's first fiscal quarter of 2009. Until the deal closes, both companies will operate independently. Following completion, the business will be integrated into the HP StorageWorks division within the Technology Solutions Group at HP.

John Sloan, senior research analyst with Info-Tech Research Group, wasn't surprised to hear that LeftHand Networks was acquired by HP and added that it was only a matter of time that the company would be acquired after Dell acquired EqualLogic.

"LeftHand and EqualLogic are mentioned under the same breath [in terms of iSCSI SAN] and questions rose on whether someone would buy LeftHand," he said.

Sloan added that HP didn't necessarily need to acquire LeftHand Networks as it was already trying to orient some of their products such as their EVAs and MSAs to meet the needs of SMEs looking for storage solutions.

"The market was looking at LeftHand as providing the ideal solution for their needs so for a company like HP to buy LeftHand that eliminates a strong competitor in that field and brings the people looking at LeftHand over to their own products," explained Sloan.

While bringing LeftHand into HP's portfolio was a good move, Sloan noted that the company has some work to do.

"HP has a lot of storage products & so we are going to have to see how HP works [LeftHand] into their overall strategy and that is something that is going to be a challenge going forward," he added.