HP's LeftHand Buy Is As Much About Virtualization And Dell As It Is iSCSI

Hewlett-Packard's decision to acquire LeftHand Networks for $360 million

With the acquisition, HP is getting three very, very important things:

1. A family of iSCSI appliances. While HP already has iSCSI in its entry-level MSA line and midrange EVA line, LeftHand's line provides clustered iSCSI storage capabilities which allow capacity and performance to scale with the addition of additional nodes, which can be done on-the-fly.

2. A new, competitive lever against arch-rival Dell which made its own big iSCSI play with the $1.4 billion acquisition of EqualLogic earlier this year. Dell, which originally risked losing EqualLogic's very loyal channel base but which has since managed to attract many of EqualLogic's channel partners back into the fold, has since turned into a major iSCSI vendor and an even bigger thorn in HP's midrange storage side.

As far as competition between the old LeftHand and the old EqualLogic, LeftHand was one of the biggest beneficiaries of the channel confusion which resulted from Dell's acquisition of EqualLogic, with several EqualLogic VARs changing loyalty to LeftHand in the face of worries about working with Dell as a channel partner.

3. A big boost in its move to secure a beachhead on the fast-growing virtualization business. LeftHand is a pioneer of developing virtual storage appliances, which work like physical appliances except that they are built using virtual servers instead of server hardware. With LeftHand in hand, HP will be able to grab a share of the virtual storage appliance market and get its storage hooks into VMware and Microsoft Hyper-V virtual infrastructures.

However, don't forget one other thing HP gets -- trouble.

You know how every silver cloud has a dark lining? Well, the dark lining in this case is a lawsuit that Dell in July filed against Richard Shea, who was hired from EqualLogic early this year to serve as its vice president of North American sales, to prevent the use of confidential Dell EqualLogic information.

As a result of that lawsuit, Shea has had to stay away from LeftHand for the time being, according to other LeftHand employees.

It's things like HP's acquisition of LeftHand that really make it a fun time to be in the storage industry!