IBM Buying Data Storage Firm Arsenal
By Vicki Lee Parker, The News & Observer, Raleigh, N.C.
Dec. 7–IBM said Thursday that it plans to acquire Arsenal Digital Solutions, a small Cary data management company to help expand its data storage and protection business worldwide.
The companies did not disclose the financial terms of the deal.
Arsenal, which was started in 1998, has built itself into a leading data storage, protection and backup services company, raising more than $50 million in funding. It employs 100 people.
Arsenal will remain in Cary and become part of IBM’s Global Technology Services division. But the name will sunset once the deal is final in the first quarter of 2008, said Brian Reagan, Arsenal’s chief marketing officer.
Reagan said the acquisition is a good fit for Arsenal’s long-term plans.
“We’ve had some very ambitious growth plans,” Reagan said. “We looked at a lot of possibilities. [IBM] gave us global reach and branding. Why not partner with the world leader?”
Arsenal was attractive to IBM because its technology lets customers store data on demand, said Mike Riegel, IBM’s vice president of information protection services. That’s particularly important now that many companies have to manage data in a number of locations at once, including in branch offices, on laptops and online.
The online storage business is a small but fast growing industry, said Doug Chandler, research director at analysis firm IDC in Framingham, Mass. He said Arsenal has become a top provider for both small and large companies in a number of countries.
Because of confidentiality agreements with its partners around the world, Arsenal does not disclose the names of its customers, but it says it has more than 3,400, including those in health care, hospitality and manufacturing. The company doesn’t provide specific annual revenue either, but has reported double-digit growth for the past six years.
“IBM has the deep pockets to develop Arsenal’s technology and achieve data management services beyond backup,” Chandler said. “This is a good thing for Arsenal and IBM made a sound choice.”
IBM plans to use its global resources to help expand Arsenal products. For instance, IBM will pair its 150 data storage centers with the 60 centers that Arsenal uses to store backup information for companies in case of power outage, natural disaster or other problems, Riegel said.
IBM also plans to hire additional engineers, sales representatives and researchers to work at Arsenal’s Cary office and other IBM locations.
“We are going to be investing and hiring hundreds of people in the coming years,” Riegel said.
vicki.parker@newsobserver.com or (919) 829-4898
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