HP to acquire storage-software company

Hewlett-Packard has agreed to acquire StorageApps for $350 million, a deal that will reinforce HP's strategy for gathering a company's hodgepodge of storage tools into a vast setup that's easy to manage.

HP hopes corporations with nightmarishly complicated collections of storage devices will be drawn to its vision, Federated Storage Area Management (FSAM), designed to unite storage devices from HP and others within a single, easier-to-control system.

A key part of FSAM is "virtualization," which is intended to free people from having to worry about which physical device is actually storing their data and which, through automation, eases tasks such as file backup or the addition of new storage devices.

StorageApps, a 200-person company based in Bridgewater, N.J., makes storage virtualization software that links networks of storage devices and keeps track of where data is stored so people don't have to navigate elaborate hierarchies of storage systems or worry about changes such as new equipment.

With StorageApps' software, customers can "stop having islands of storage systems from different vendors. They can put them all together and make them look like they came from the same vendor," said Nora Denzel, vice president and general manager of HP's storage division.

StorageApps Chief Executive Dan Gittleman will report to Denzel and run the StorageApps division, Denzel said.

Andrew Lona, StorageApps' chief marketing officer, said the company couldn't grow fast enough on its own to keep up with the changing storage market. "For us to meet the kind of demand in the marketplace, we weren't able to scale quickly enough organically on a global basis," Lona said.

Virtualization is still largely a dream--and one that IBM and other companies are trying to make a reality as well. Acquiring StorageApps should help HP address analysts' concerns that FSAM is interesting but not in the vanguard of the movement toward virtualization.

StorageApps lists smaller Internet companies and some large corporations among its customers, HP said in a statement.

Under the agreement, StorageApps will become a wholly owned subsidiary in a stock-for-stock transaction.

In midmorning trading, HP stock was up 34 cents, or 1.32 percent, to $26.09.