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By | Simon Sharwood 26th May 2014 02:44

IBM to end NetApp OEM sales pact: report

Big Blue wants to shift its own boxen and take all the profit

IBM will reportedly end its pact with NetApp, according to Bloomberg.

Citing “an internal memo reviewed by Bloomberg, the newswire says IBM has simply decided to sell its own kit rather than continuing to resell the N-series network attached storage devices it sources from NetApp.

IBM's storage sales aren't exactly stellar, so it makes sense to concentrate on shifting its own kit and taking as much margin as it can rather than sharing the spoils with NetApp. That its own v3500, Storwize v5000 and Storwize V7000 Unified are reasonable like-for-like replacements for the N3000 Express, N6000 and N7000 it gets from NetApp means the decision can't have been all that difficult.

That doesn't make the decision any easier for NetApp, which draws about two per cent of its revenue – and more than a little credibility – from its IBM alliance. With its balance sheet challenged in many ways, losing some easy revenue is perhaps the last thing it needs.

It's also worth thinking about what IBM's move says about the NAS market in general. The likes of Dropbox for business offer NAS-like functions (as end-users perceive them) without all the hassle of maintaining a device. Such services aren't going to become less sophisticated, so represent a real threat to those who need to access files alone. Software-as-a-service poses a parallel threat by removing the need for storage capable of serving the transactional needs of on-premises applications.

Those emerging technologies threaten both IBM and NetApp. Big Blue at least has a cloud it can use to catch the shift in spend. NetApp, meanwhile, looks like less of a catch after years of acquisition speculation. ®

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