Microsoft Buys Avere Systems to Bolster Performance Storage Offerings

Microsoft is quick out of the blocks this year on the acquisition front with an announcement that it will acquire Avere Systems for an undisclosed amount. Avere Systems is a hybrid cloud data storage company based out of Pittsburgh. Its main offering is a blend of on-site and cloud-based storage that places hardware on the customer’s site and seamlessly extends into the public cloud. Interestingly, Avere extends to AWS and GCP but not Azure. Obviously that will change. The addition of Azure to the platform will be quick, and Microsoft has promised it will keep the connections to AWS and GCP, too. Therefore, it won’t be forcing migrations on current customers, nor will it be forcing a pivot from what is perhaps those customers’ cloud providers of choice—which is a comfort to those customers, I’m sure.

Avere bought by Microsoft to enhance its Azure storage offerings
Microsoft buys Avere Systems to enhance its hybrid cloud storage offerings

The hybrid cloud storage arena is quite competitive, with Avere contending against companies like Cloudian, CTERA, and Nasuni for customers in this new space. The solution—which couples local on-site storage with remote cloud-based storage from public cloud providers in a seamless manner using tiering to keep data in motion local to site—has many use cases, most obviously archival and backup. Where Avere differs from its competitors is that its appliances are effectively an all-flash array/cloud gateway. This provides a very powerful, high-bandwidth, low-latency caching layer for data at motion.

From Microsoft’s perspective, this is a tactical acquisition to bolster its hybrid storage offering Azure Stack, and it also gives it a solid offering in the media and entertainment industry. Avere counts Illumination Mac Guff and Moving Picture Company as customers. Its products allow the fast manipulation of data in motion without the high cost overheads incurred with legacy on-site storage arrays.

Jason Zander, corporate VP of Azure at Microsoft, stated that they “are excited to welcome Avere to Microsoft” and that they “look forward to the impact their technology and the team will have on Azure and the customer experience.” This makes perfect sense. Microsoft has a more realistic approach to the cloud experience where enterprises are concerned. It has embraced hybrid with the release of Azure Stack and the fact that Office 365 service allows the downloading and local install of the full Office suite. It understands that legacy will be around for a significant amount of time. Further, it recognises that not all companies wish to move lock, stock, and barrel to the public cloud; there may be data that is so sensitive that they do not wish for it to be in the cloud, or perhaps there may be data-sovereignty issues. It does not matter what cloud purists wish. It is reality that there are some companies for which this will be their position for a significant period of time. Cloud-native applications and microservices are nice to have, but cash reigns and budgets count. Companies will want to derive as much value out of an investment in technology as possible. They may be considering native application deployment, but for the vast majority of companies outside the Silicon Valley and pioneer bracket, this is still “there be dragons”–scale technology.

Avere was founded in 2008. It has raised over $86 million, with a $14 million Series E taking place in March 2017 with investors like Google and Western Digital. Based on revenue and intellectual property, I would expect the purchase price to be somewhere in the region of $300–500 million. If properly integrated, it could turn out to be a veritable bargain for Microsoft, especially as it is honoring historical connections and not forcing migrations to Azure—although we are sure that its sales teams will incentivize its minions of global partners and resellers to drive Azure’s storage offering over AWS or GCP.

Posted in SDDC & Hybrid CloudTagged , , ,

Leave a Reply

Be the First to Comment!