Data compression and encryption chipmaker Hifn Inc. announced that it will acquire iSCSI SAN startup Siafu Software LLC for an undisclosed amount.
The two companies have been working together for just over a year now, as Siafu was using Hifn's data compression and data encryption
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According to Russ Dietz, chief technology officer at Hifn, the company is looking to move "up the food chain" from storage system components to selling storage systems themselves. The company already works with a number of OEM partners to sell its chips, including EMC Corp., Network Appliance Inc. (NetApp), IBM and FalconStor Software Inc. Its compression chips are frequently used in virtual tape libraries (VTL) and can be used to further data reduction ratios on data deduplication systems, including products from Sepaton Inc.
Now, Dietz said, OEMs are looking for complete storage system packages to sell at the low end of the market. And, Siafu's products, which are targeted at that same market while already incorporating Hifn's chips, will now be sold to those customers, as well as through Siafu's already established channel.
The companies had a close partnership already, according to John Matze, CEO and founder of Siafu and now vice president of business development for Hifn. But Siafu has several patents pending on its products, including one for the ability to integrate encryption into the iSCSI I/O stream, as well as an approach to writing encrypted data from VTL disk to tape that doesn't require sending data through the backup server.
Another area Dietz said the newly merged companies are looking to develop is data reduction for primary storage, a space where one startup, Storewiz Inc., has already begun shipping product, and more startups are beginning to emerge from stealth.
According to IDC analyst Benjamin Woo, putting both encryption and data reduction, whether data compression or data deduplication, into a hardware offload engine and performing both inline as part of larger systems is the way the market in general is headed. "There's no question there's a desire from everyone from end users to vendors to look at primary data reduction," he said. Hifn, meanwhile, already has its boards and ASICs inside systems from most of the big OEMs.
"We're hoping to help Tier 1 OEMs leapfrog that market," Dietz said. "We will definitely be delivering something along those lines to them."
"Siafu took some cryptic stuff on the chip side and made it easy to sell to the SMB customer," said Arun Taneja, founder and analyst with the Taneja Group, who has been working with Siafu as a technical advisor. "Hifn saw that and scooped them up."