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HP acquires LeftHand Networks for $360 million cash

Acquisition will extend HP's reach into the storage and virtualization markets

HP signed a definitive agreement to acquire Boulder, Colo.-based LeftHand Networks Inc., for $360 million cash, as the vendor aims to further expand its storage portfolio.

The acquisition, which is subject to certain closing conditions, is expected to close by HP’s first fiscal quarter of 2009. At that time, the LeftHand Networks business will be integrated into the HP Storage Works division within the Technology Solutions Group at HP.

LeftHand Networks is a global vendor of storage virtualization and iSCSI storage area network (SAN) solutions, with over 500 resellers and distributors worldwide. As a result of the acquisition, HP will utilize LeftHand Networks’ solutions to further extend its virtualization solutions in the mid-market space.

According to Michelle Warren, president of MW Research and Consulting, a Toronto-based firm, the acquisition is a good move on HP’s part.

“The acquisition will allow HP to beef up their storage division quickly because they don’t have to do it all in-house,” she said. “Even though there’s still stiff competition with storage and virtualization-specific vendors such as Citrix and VMware, the acquisition will give HP a little bit of a leg up.”

For the disaster recovery space, LeftHand Networks also features advanced data replication technology, which can be used by mid-size companies that have remote offices, or for larger organizations that have branches.

HP plans to integrate LeftHand Networks’ solutions and technologies into its current iSCSI solution portfolio. For the low-end of the market, HP StorageWorks All-in-One Storage System (AiO) and HP StorageWorks Modular Smart Array (MSA) solutions are available. For the high-end of the market space, HP will offer its StorageWorks Enterprise Virtual Array (EVA) solutions.

Bill Chambers, CEO of LeftHand Networks, said joining HP was a natural fit for the company’s partner and ultimately, its end-user community.

“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,” Chambers said.

With the acquisition, HP will strengthen its storage, server consolidation, as well as disaster recovery options to provide its channel and end-user community with a broader range of solutions to choose from.

“The acquisition of LeftHand Networks significantly expands our storage portfolio,” Dave Roberson, senior vice-president and general manager of HP’s StorageWorks Division said. “With our strong channel and leading position in the industry-standard server market, we are ideally positioned to deliver this technology to customers worldwide.”

CDN requested an interview with HP to gain some Canadian insight into the acquisition, however a source close to HP said this is a U.S.-based initiative, so no Canadian perspective is currently available.