IBM Buys Storage-Services Company NovusCG - InformationWeek

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Software // Information Management

IBM Buys Storage-Services Company NovusCG

IBM tries to catch EMC and Symantec in the storage software market by adding NovusCG to its Storage and Data Services business unit within IBM Global Technology Services.

IBM on Wednesday acquired storage-services company NovusCG, a move that boosts the company's strategy of becoming a larger supplier of high-growth, high-margin software and services. Financial terms were not disclosed.

Privately held NovusCG now becomes a part of the Storage and Data Services business unit within IBM Global Technology Services. Sean Garvey, chief executive and president of NovusCG, will join IBM as director of issue-based services, IBM executives said during a teleconference with reporters.

NovusCG offers professional services, software and training to global 2000 companies and the U.S. government. Its services revolve around infrastructure optimization, disaster recovery, compliance management, managed services and other storage-related areas. The company has developed a methodology called Xcelleration for delivering its services.

IBM and NovusCG have worked together with customers since 2003. The latter company's other business partners include Cisco Systems, Computer Associates, EDS, EMC, Hitachi Data Systems, Hewlett-Packard, Oracle, Sun Microsystems, Symantec, and Unisys.

NovusCG's focus on storage software is of particular interest to IBM as it transforms itself from a so-called legacy hardware manufacturer to a provider of software and services. As part of this strategy, IBM this year bought data management provider Softek Storage Solutions, which provides a range of products and services designed to help companies store critical business data and safely move it from system to system.

NovusCG's technology complements IBM's core disk and tape products, and will be integrated with IBM's entire line of System Storage brand hardware and software, IBM said. Industries covered by NovusCG's client base, which is mostly large corporations with offices in multiple geographies, include banking and finance, government, healthcare, retail and telecommunications.

In the storage software market, IBM trials behind rivals EMC and Symantec. In the second quarter, EMC led the overall market with a 24.6% revenue share, according to IDC. Symantec was second with 17.5%, and IBM was third with 13%. HP and CA rounded out the top five with 4.7% and 4.6%, respectively.

Year-to-year, IBM's storage software revenue grew 19% in the second quarter, which included the Softek acquisition, according to IDC. EMC's and Symantec's revenues grew 4.8% and 7.1%, respectively.

The high-growth market is being driven by businesses' need to meet data storage requirements mandated by government regulations, and corporate lawyers concerned with potential litigation. The worldwide storage software market grew 10.4% year-to-year in the second quarter to $2.8 billion, IDC said.

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