News
News
8/30/2006
06:48 PM
Connect Directly
RSS
E-Mail
50%
50%

Tandberg Buys Tape Maker Exabyte

It's the second recent major merger in the tape industry, following the close last week of Quantum's $770 million acquisition of ADIC.

The consolidation of the tape industry continues as Tandberg Data has agreed to acquire Exabyte in a $28 million deal.

It is the second major move to consolidate the tape industry following the close last week of Quantum's $770 million acquisition of ADIC.

The two acquisitions come during a crucial time for the tape industry, as the growth in disk-to-disk backup and archiving, as well as the increasing use of online services for backup and archiving, threatens tape's dominance in this space.

However, said Bob Abraham, president of Freeman Reports, an Ojai, Calif.-based tape industry analyst, things are not as bad as they seem in the industry.

In his most recent report on the industry, Abraham said that tape market revenue has declined for five straight years while volume has dropped for 10 straight years, but that he expects both unit sales and revenue to grow from 2006 to 2011 as businesses continue to adopt higher-end tape for safe long-term archival and data retention requirements.

With the acquisition, Tandberg, Oslo, Norway, gets access to Exabyte's VXA tape technology, along with new tape autoloaders and small tape libraries, said Ken Cruden, executive vice president and general manager of Tandberg's U.S. subsidiary, based in San Diego. Both companies offered tape automation products using LTO tape drives.

Tandberg also gets Exabyte's OEM relationship with Apple to go with its own OEM relationship with Dell. The two companies both count IBM and Fujitsu-Siemens as OEM partners.

Tandberg also gets access to a larger channel in the U.S., as the two companies had little overlap in their channel partner base, Cruden said.

The Exabyte spokesperson said the acquisition will be good news for Exabyte's channel, as the Boulder, Colo., vendor had been struggling financially for five years while Tandberg is financially strong.

Kevin Murray, owner of Compuplus, a Costa Mesa, Calif.-based solution provider, said he hope little changes as a result of the acquisition

"I'm a premier Exabyte partner, and get the premier discount," said Murray. "I wonder how this will impact me."

Cruden said the need to consolidate in the tape industry drove his company's acquisition of Exabyte.

"We've been looking at various alternatives," he said. "It's very clear that with the consolidation in tape, businesses need to get bigger. The key issue is, companies need to get bigger to stay in the game."

The Exabyte spokesperson said all of Exabyte's rank and file employees are going to be offered a position in Tandberg at the same salary, and the top executives, including Exabyte CEO Tom Ward, will stay with the company for the near term.

Comment  | 
Print  | 
More Insights
IT's Reputation: What the Data Says
IT's Reputation: What the Data Says
InformationWeek's IT Perception Survey seeks to quantify how IT thinks it's doing versus how the business really views IT's performance in delivering services - and, more important, powering innovation. Our results suggest IT leaders should worry less about whether they're getting enough resources and more about the relationships they have with business unit peers.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Must Reads Oct. 21, 2014
InformationWeek's new Must Reads is a compendium of our best recent coverage of digital strategy. Learn why you should learn to embrace DevOps, how to avoid roadblocks for digital projects, what the five steps to API management are, and more.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
A roundup of the top stories and community news at InformationWeek.com.
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.