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November 2020, Vol. 18, No. 4

Post-acquisition strategy and why storage mergers go bad

Like other industries, the world of data storage took its hits from the pandemic-caused business malaise of 2020. The lack of a solid post-acquisition strategy on the part of large vendors that acquired smaller companies over the last few years didn't help. For example, storage leaders NetApp and Hewlett Packard Enterprise (HPE) were among the companies that reduced their staffs over the summer and, in both cases, engineering teams gained from acquisitions were hit hard. NetApp -- which bought all-flash vendor SolidFire for $870 million in 2015 -- gutted the engineering staff of its SolidFire team, while HPE cut to the core of the crew it acquired with its $650 million payment for hyper-converged infrastructure (HCI) startup SimpliVity two years later. These staff reductions got me thinking about enterprise data storage acquisitions -- why these acquisitions happen, a company's dedication to making the purchase work and how customers of acquired companies feel about the situation. Storage vendors usually acquire companies for ...

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