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Why did IBM buy XIV?

IBM's XIV Purchase background

By Chris Mellor, Techworld | Techworld
Published: 08:00 GMT, 04 January 08

IBM surprised most of the storage market with its purchase of secretive Israeli start-up XIV. It indicates a potentially profound new storage direction for IBM. Certainly XIV offers intriguing new SAN-style storage but that on its own is not enogh to justify a purchase. So why did IBM buy the company? There appear to be several reasons: Moshe Yanai, XIV's founder; XIV technology, low-cost Web 2.0 scale storage of non-transactional data; and IBM's reading of the Web 2.0 market.

XIV, which offers block SAN-like storage using SATA drives for Web 2.0 with great scalability and data protection, has received just $3 million investment money; it doesn't take that much to develop software for commodity hardware components. Yanai apparently provided $2,250,00 of that with other private investors contributing the rest. No venture capital firms have an interest, as they do at Diligent.

The Israeli press has mentioned a purchase price of more than $300 million, which would give Yanai a very pleasant Christmas present. IBM gains technology, around fifty people, and has committed to set up a major new storage development facility centred on XIV's facilities in Israel.

Moshe Yanai

Moshe Yanai comes from EMC where he invented Symmetrix arrays ten or more years ago, becoming Symmetrix VP of engineering for ten years, as well as an EMC Fellow and reporting directly to CEO Joe Tucci. He owns several patents for Symmetrix technology and today's DMX4 arrays still use that technology.

He left EMC, 'was ousted publicly' according to IBM senior storage consultant Tony Pearson, in 2001. After that he co-founded de-duplication company Diligent with Doron Kempel, and then founded XIV in Israel. Yanai is still a director at Diligent.

EMC bought the Data General Clariion disk operation when it realised that mid-range arrays were needed alongside the top-end Symmetrix. Yanai reportedly opposed this purchase.

Kempel and Yanai both left EMC in 2001 and formed Diligent from EMC's R&D lab in Israel in June, 2002. In exchange for the lab and facilities EMC was given a 24 percent stake in Diligent valued at $5 million. Yanai reportedly invested $10 million from the wealth he'd earned at EMC.

Yanai is a 'big hitter' in storage terms. He now becomes an IBM Fellow.

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