DH Kass, Senior Contributing Blogger

February 19, 2013

3 Min Read
NetApp Nabs BYOD Developer ionGrid

During a financial analysts’ call to discuss its Q3 2103 results, NetApp (NASDAQ: NTAP) rather off-handedly mentioned that it had bought ionGrid, a privately held developer of technology for Apple (NASDAQ: AAPL) iPhone and iPad business users to securely access content, applications and data housed behind the corporate firewall. Neither party disclosed financial terms of the deal.

Here’s the entire text of what NetApp had to say about acquiring ionGrid:

“NetApp has completed the acquisition of ionGrid, a privately held software company based in Mountain View, Calif. The acquisition provides NetApp customers with a secure, simple-to-use solution for accessing enterprise file shares from mobile devices. Financial terms of the acquisition are not being disclosed at this time.”

On the earnings call, NetApp chief executive Thomas Georgens called the ionGrid purchase a “tuck-in type acquisition,” meant to add technology to the vendor’s technology portfolio, and suggested the company will do more similar deals in the future while considering larger purchases based on the opportunity. “I’ve said in the past that as far as tuck-ins go, I think you should expect, just as we get bigger, we’re looking for technologies, probably the rate of that will increase modestly,” he said.

Despite the casual introduction, the ionGrid acquisition is important to NetApp for two big reasons: First, it immediately opens the BYOD door, bringing not only NAS access but also management and monitoring through mobile devices up for discussion; and, secondly, NetApp’s hasn’t delved into selling apps for client devices, making the ionGrid purchase potentially a bit of an outlier but perhaps a sign of things to come.

ionGrid’s Stratos platform provides cloud-like features, although the app isn’t cloud-based. Users gain access to SharePoint, file shares, and intranet applications without cloud storage or a VPN—the ionGrid technology creates a secure “container” on the mobile device that serves as a barrier between Stratos-accessed information and other apps residing on the user’s device. Last December, ionGrid rolled out a native iOS version of Stratos for the iPhone, priced at $15 per month per user.

Nick Triantos, ionGrid co-founder and chief executive, said, in a blog post that NetApp’s structure and organization will provide a shot in the arm to the developer’s product plans.

“After weighing all the growth options for our company, which included raising venture capital from well-known VCs, we chose to become a part of NetApp because it would help us achieve our key milestones faster,” he said. “There is no doubt in my mind that as part of NetApp, we will be able to build a much better solution, be better equipped to support our customers, and combined be able to grow far beyond what we hoped to achieve as a standalone company.”

Meanwhile, NetApp posted $1.63 billion in revenue for fiscal Q3 2013, a 4 percent gain from the same period last year and a 6 percent sequential increase, all in line with analysts’ expectations. The vendor earned $158 million, or $0.43 per share for a 32 percent spike from the $120 million it earned at the same time last year. NetApp finished the quarter with $6.7 billion in cash on hand and investments. The company projects Q4 revenue of about $1.7 to $1.8 billion for a 3 percent year-over-year increase, according to CFO Nicholas Noviello.

As for channel sales, Georgens said NetApp’s channel and OEM businesses together accounted for 81 percent of its revenue in Q3, a 7 percent year-over-year increase. Distributors Arrow (NYSE: ARW) and Avnet (NYSE: AVT) together account for 33 percent of total revenue, up from 27 percent last year.

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About the Author(s)

DH Kass

Senior Contributing Blogger, The VAR Guy

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