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IBM Buys Its Way Into Deduplication


IBM's acquisition today of Diligent Technologies not only gives it an established player in the emerging hot-spot of data deduplication, it may help Big Blue reap additional benefits in market and channel opportunities.

The acquisition also puts IBM (NYSE: IBM) shoulder-to-shoulder with EMC, Sun and Hitachi Data Systems (HDS) -- all top-tier players boasting "de-dupe" solutions, which enable businesses to compress their stored data, saving resources and money.

The purchase presents IBM with some unique reseller opportunities, given Diligent's OEM relationships with Sun, HDS and Overland.

Ironically, HDS also has gained traction as a formidable Diligent OEM partner -- a fact that may cause some problems for both parties.

"IBM had no deduplication story before, but now it has something it owns," David Russell, a vice president at Gartner, told InternetNews.com. "Hitachi is going to have to assess what it wants to do now, given the amount of money and resources they've dedicated to the Diligent relationship."

"They obviously value it but now it's no longer a differentiator between HDS and IBM," he said.

Six-year-old Diligent, a spin-off of an EMC research and development unit, ignited interest well before it launched its first product in early 2006.

The vendor said its ProtecTIER enterprise data deduplication platform has since been deployed in a hundred Fortune 1000 datacenter environments -- including major telecoms, and global auto manufacturer, financial institutions and healthcare players.

While terms of the purchase were not disclosed, research firm Robert W. Baird & Co. estimates that IBM paid about $200 million for the company. IBM said Diligent will be folded into the System Storage unit of its Systems and Technology Group.

"We've got a great technology with Diligent and one that fits well for the midrange enterprise and even the smaller business organization that's looking for a tape-less backup system," said David Messina, manager for business development at IBM System Storage.

Messina told InternetNews.com that IBM hopes to use its channel partnerships to expand into new market bases. The company has not yet decided whether it will rebrand Diligent's offerings, however.

"We are very happy about the acquisition and we've only heard positive feedback from customers and partners," Doron Kempel, Diligent's chairman and CEO, told InternetNews.com. "Everyone's comfortable with the IBM name and knows that Diligent is in the hands of a reputable company." [cob:Pull_Quote]

Kempel added that the IBM roadmap for Diligent is "quite extensive" and will include a new storage appliance offering in the near future.

"This is reflective of the fact that we've been doing something right, and it's significant that IBM chose us," Kempel said.

He was also confident that current partners, such as HDS, would continue to sell the product.

"The first year will be about keeping the momentum going," Kempel said. "Hitachi and IBM will remain partners with Hitachi having access to the same technology.

However, Hitachi is not the only IBM rival who doing business with Diligent. Sun is another reseller, although Gartner's Russell said the company is likely to continue its partnership, which is centered within Sun's services group.