One Year In, Engenio and NetApp Bring Out the Best in One Another

It’s been one year since NetApp acquired the Engenio Storage Division of LSI.  When you consider the different sorts of acquisitions that occur in the business world, you’d think that this one would be relatively smooth. After all, we spoke the same language before the deal—storage. It should be like Coke buying Pepsi. Sugared water. One has more bubbles than the other. Right? The most common reaction I got when I asked ex-LSI employees about the deal during their first few months as NetApp employees was “it sure feels great to finally be owned by a company that understands storage.” What they really meant was “what we do is HARD to do right. It sure feels better to have a corporate parent who understands the challenges.”

 

On the legacy NetApp side, the mindset shift was more challenging—and scary—at least before the deal closed. After all, why would anyone need any other storage operating system other than ONTAP?  Prior to buying Engenio, the idea of a “second platform” was a topic of frequent debates. We saw the market opportunities that ONTAP did not address, debated what to do about it, and usually came back to a discussion about how to change ONTAP to make it more successful in the markets that we coveted. 

 

Instead, we bought a second platform and caused a major shift in NetApp’s corporate culture.  The second platform strategy has already begun to produce some impressive product innovation and customer wins in places where NetApp hasn’t been a traditional player. For example, the Dynamic Disk Pool feature that is part of the newest Santricity (10.83) release was part of the package that enabled us to become the storage infrastructure behind the Sequoia Supercomputer at Lawrence Livermore Labs.  Sequoia is the largest supercomputer in the world.

 

I think this is a prime example of the unusual dynamic of this acquisition. The common effect of an acquisition is that the “acquiree” has more change to deal with than the “acquirer”.  In this case, the acquired company moved closer to the mainstream corporate strategy than they’d ever been before, and the buyers woke up to a world that was much different than the one they lived in prior to the acquisition.