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3/2/2004
01:28 PM
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One Storage Vendor Buys Another

Applied Micro Circuits acquires 3ware for $150 million to offer lower-cost alternatives.

As the economy shows signs of picking up, consolidation in the storage market continues. Storage vendor Applied Micro Circuits Corp. said Tuesday it will buy another storage vendor, 3ware Inc., for $150 million in cash.

Customers should see benefits in the long run from the deal, which is expected to close next month. Applied Micro Circuits provides interconnect technology for wide area data networks and storage area networks. 3ware offers storage technology based on low-cost serial ATA hard disks.

This deal follows Applied Micro Circuits' acquisition of JNI Corp. last year and should provide the vendor with new opportunities to approach potential customers. Once the acquisitions are fully integrated, Applied Micro Circuits will be able to offer network expertise and technology, host bus adapters from JNI that allow servers to work well on storage networks, and storage systems from 3ware that give customers a low-cost storage option for applications and data that's less than mission critical.

Applied Micro Circuits has the right management team to properly leverage all of those components, says Tony Asaro, an analyst at the Enterprise Storage Group. "Wider distribution could lower costs even further for customers."

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