startupmania

IBM announced Thursday that it has purchased the Israeli start-up Storwize, which deals with storage. The financial information was not released, though sources have informed People & Computers, that the deal is thought to be at $140 million. People & Computers have also found out that all of Storwize’s employees are slated to remain at IBM, though it is still unclear who will be transferred to IBM’s storage unity, and who to IBM’s global R&D array.

Storwize was founded in late 2004, by Gal Naor and Yoni Amit, following the need for a storage solution for the explosive amount of data in the organization. Storwize’s HQ lies in Marlboro, Massachusetts, and it’s development center is in Yahud, Israel. The company provides data compression solutions, and its products are installed on computer systems in the organization, between the storage devices and the networks; then, the data is compressed before it is stored. The company’s solution is unique in that it reaches a compression ration of up to 90% – what brings about a significant decrease in resources needed vs. storage floor space, electrical consumption, and hard-disk costs.

In November of 2009, Storwize and IBM held a joint convention at the IBM House in Petach Tikva. The convention was attended by John Power – business development manager, STG, IBM USA, who presented to the attendees the challenges in minimizing the space taken by data stored at the organization. He was familiar with the company’s products, and was excited by them, and it is him who first started contact to close the blue giant’s deal.

At that convention, Naor told to People & Computers that “Storewize’s data compression technology is not application-dependant, and the companies products have been implemented in a wide variety of industries.” According to him, a large number of the company’s clients have repurchased the company’s products in recent quarters. Additionally, “Several global companies, with branches in Israel who have begun a local assimilation, have moved on to assimilate the technology in other branches across the globe.” Naor added that “Storwize customers who have implemented our compression solutions in different technological environments, have seen a growth of a few hundreds percent in the exiting information infrastructure, alongside absolute transparency, without damaging performance and without any change to the storage infrastructure.”

Currently, Storwize solutions are installed in over 100 companies across the world, including IT firms, banks, car manufacturers, industrial companies, animation companies, government organizations and more. Storwize is partnered with all the large storage companies, such as IBM, EMC and NetApp. Its solutions complement information cloning prevention software.

A source close to the deal said that “when Storwize first began, the storage providers were scared of it. The economic pressure on the IT personnel, however, was stronger. Many organizations are motivated by the need to conserve, at any cost, which is what Storwize does best.”

Meir Nissanson, CEO of IBM Israel, mentioned that “Storwize’s purchase adds another step in the process to base Israel’s position as a central hub of IBM activity in the storage realm.” According to Nissanson, this is yet another recognition of IBM in the innovation and technological capabilities that have developed in Israel over the recent years.

Several days ago, Dell announced that it intends to purchase one of Storwize’s competitors, Ocarina Networks – a private American company that provides file compression technology, by the end of the month.

Translated by Itai Rosenbaum