Coming sooner than you thought - On-Demand Storage Grids

Industry pundits out there have been quick to trash Sun Microsystem's deal today to buy StorageTek. That leaves me scratching my head. Putting aside the number crunch - deal price, earnings accretion, cash outflow, etc. The numbers actually work out just fine, going by that sort of tactical financial analysis. But I'm not sure why the bigger market picture is'nt clearer to more analysts out here. Sun's got the R&D discipline, and an interest in the storage market. And StorageTek is a gorrilla, carrying technology flab and looking for a workout. Put the two together, and there's a strong chance that Sun can make real good out of this.

Sun has recently been pitching the vision of storage as a utility service - its storage grid - just plug in for $1/GB/month (OK, not as simple as 'just plug in', but bear with a little market-speak here). With StorageTek's customer base, sales strength and storage expertise, Sun gets to jumpstart this innovative service model. I'd predict with these two companies getting together, Sun can significantly accelerate adoption of storage grid services among businesses with big storage needs. And to be sure, storage does quite perfectly fit the description of a computing commodity, ripe for the utility model. Even before adoption of CPU grids starts to happen. Not to forget that data storage needs are growing explosively - 70% annually by some counts. Storage services offer a low risk entry point for customers to start exploring the reliability, security, efficacy and cost savings from grids. And businesses can start by using them in baby steps, incrementally growing in maturity, first with secondary backups, to archiving, to primary backups and finally to primary storage.

And while we get closer to that scenario becoming more of a reality, in the immediate future, Sun now has the opportunity to pitch StorageTek customers with computing, storage and network solutions all under one roof. I'm sure that will help Sun snag some share from IBM, HP and Dell; Sun surely needs that. But I'll be waiting for those new customers to cosy up a bit with Sun, and then...hallelujah, give them the gospel of the grid and plug them right in!

Its classic acquisition synergy. StorageTek has the experience and relationships. Sun has the smarts and vision. Together they can build real value in the storage marketspace. So its worth repeating - why are'nt more analysts seeing it this way?