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*Edited by Brain Dakss ([email protected])

HP Moves Further Into Storage With $350M Buy
Looking to bolster its presence in the fast-growing $7.5 billion storage-infrastructure market, Hewlett-Packard last week struck a deal to acquire StorageApps, a pro-vider of hardware and software for storage area networks. The $350 million stock swap came in the same week in which HP said it would slash 6,000 jobs and probably miss third-quarter sales forecasts.

StorageApps' products include the SANLink appliance, SANMaster storage-management software, and related services. The company's virtualization offerings let IT managers monitor all their storage assets and enable the transfer of data among storage systems made by different vendors.

StorageApps supplies software to Dell Computer, which competes with HP in the storage market. However, observers say the deal isn't likely to affect that arrangement. "Dell has a pretty good relationship with HP, and HP has been more willing to enter original equipment manufacturer relationships recently," says Brooks Gray, a Technology Business Research analyst. Dell is also a minority investor in StorageApps.

--Paul McDougall ([email protected])


Amazon Again A Services Seller In Deal With AOL
On the same day last week that Amazon.com reported its 17th straight quarter in the red and listed its debt as $2.1 billion, it said America Online had plunked down $100 million for a roughly 2% stake in Amazon. Terms of the investment left the door open for a takeover of Amazon by AOL under certain conditions--most notably that such discussions be kept quiet.

AOL will also pay an undisclosed amount for Amazon software to conduct searches and personalize merchandise offerings in AOL's [email protected] AOL, CompuServe, and Netscape.com properties for the 2002 holiday shopping season.

In the wake of earlier deals with Toys 'R' Us and Borders, this is the latest example of how Amazon is customizing its E-commerce technology for online retailers and providing it as a service. "The reason our platform works so well is that we use it ourselves. We eat our own cooking," CEO Jeff Bezos says. "We think there's tremendous amount of headroom over time to drive profitability through CRM, to drive revenue through CRM. We'll keep getting better at it."

--Christopher T. Heun ([email protected])


Investors Seek Secure Track
Betting that security software providers also provide secure investments, Dell Computer, Fidelity Ventures, and First Union eVentures Group are among the backers who last week pumped $30 million into a second round of funding for Sanctum, which makes security applications and Web-software monitoring tools.

Sanctum's core products are AppScan, which seeks out and tests spots in Web apps for hacker vulnerability, and AppShield, a Web-application firewall that monitors behavior to ensure site visitors are complying with pre-established business rules. Both are customized for key vertical markets that are at high risk for security breaches, including financial services and media.

Despite a recent softening of the market for some vendors, Forrester Research predicts that spending on computer security will reach $19.7 billion by 2004, up from $5.7 billion today. But investors should also feel safe, says Sanctum CEO Peggy Weigle, because by continuing an international expansion effort, the company should be profitable by the second quarter of 2002.

--Eileen Colkin ([email protected])

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