Things have been very busy in the storage world in Israel lately.  First XIV gets acquired by IBM, and now Onaro gets acquired by NetApp. I’m not going to comment on the strategic fit of Onaro with NetApp or the challenges of integration.  Chuck Hollis at EMC, speaking from experience on integration challenges and claiming to take off his “EMC fanboy hat” (his words, not mine), already did that here.  I’m also not going to speculate on the price paid.  TechMoz did that here.  And I’m not going to try to blend technical insight with humor, as Jon Toigo did here.  You have to admit, he is funny.

NetApp is ripe for a few, targeted acquisitions that add features, functions, and capabilities.  Some will probably work out well.  Others not so much.  That’s something with which every successful supplier has to cope.  It’s value add that takes NetApp into adjacent spaces.  It’s a good strategy, where the benefit comes from execution excellence.  And NetApp has reached a size where some of the innovation may be more cost-effectively developed outside of NetApp and then integrated.

In all of this, however, I keep thinking back to a conversation several years ago with one of my favorite CFOs, NetApp’s Steve Gomo.  He postulated that NetApp could develop in such a way as to make the company indifferent on an absolute-profit basis as to whether the company sold any hardware.  “After all,” he said, “we’re really a software company.” I’m curious how Onaro fits with that strategy.  Certainly part of Onaro’s value proposition is the heterogeneous support and platform independence.  Is this an indication that NetApp wants to build,  as EMC has done, a platform-independent software business?  It doesn’t seem as though that is the strategy.  But rather, Onaro looks like a plan to help NetApp sell integrated networked storage infrastructure into more demanding environments.   At the same time, I’ve seen NetApp begin to make some progress on a software-enabled services business.  My question to NetApp is: “Are we going to see a different business model emerging?”