On January 2, 2013, the first material acquisition took place in the IT industry. Imation, known best for its security, mobile and removable storage products, took a big leap into the enterprise storage market by announcing its acquisition for Nexsan for $120M.
Neuralytix believes that this is proof positive of the commitment of Imation to grow past its mobile and removable storage legacy, and to build a sustainable business that can stretch from small to large enterprises.
For its whole history, Nexsan has been a cost leader with its storage solutions. They were a leader in the provision of SATA based storage to the enterprise at a time when SATA was still considered unfit for enterprise use. But as the IT community gained acceptance of this low cost technology, Nexsan was very well positioned to take advantage of the growing market. However, Nexsan never became a significant player in the storage systems market.
Imation’s acquisition of Nexsan will give the Nexsan line of products the extra differentiation it needs to clearly define it as a stand-out storage solution. The combination of the low cost design, the time-tested reliability augmented with Imation’s archiving and security software will definitely created a unique solution for enterprises that want to have an end-to-end solution from disk through removable storage (including RDX removable disks and tape).
In recent years, Neuralytix believes that Nexsan’s lack of differentiation has been a cause of conflict that has led to a more challenging business environment for Nexsan; Neuralytix further believes that the offer by Imation is a fair, but generous offer for Nexsan.
The portfolio of solutions that Imation has now acquired will make 2013 a very strong year. It behooves Imation to turn Nexsan’s business around and propel it back into the enterprise. But it cannot do so by just reselling the Nexsan solution with the Imation brand. It needs to package the solutions in a way that is attractive for value-added resellers to make money and around which they can build solutions.