IBM acquires Arsenal Digital Solutions

IBM has announced it is acquiring Arsenal Digital Solutions, a provider of managed data protection and storage management services.

This is IBM's third major acquisition of a managed services company in the last 18 months, following its purchase of security provider Internet Security Systems (ISS) in August 2006 and software migration vendor Softek in January.

Terms of the deal, expected to close in the first quarter of next year, were not disclosed.

Arsenal Digital's suite of data protection services, delivered online via the software-as-a-service (SaaS) model, provide managed, on-demand backup, disaster recovery, business continuity and storage resources management.

The 100-employee company, which operates 60 data centers in 12 countries, has 3,400 customers, mostly small- to medium-sized businesses (SMBs) which lack the technical savvy or storage resources to run their own redundant data systems.

The addition of Arsenal's data protection services to the company's product lineup allows IBM to deliver "a variety of services to help small and large customers deal with the problem of securing the data explosion" taking place within companies, Mike Riegel, vice president of information protection services in IBM's Business Continuity and Resiliency Services (BCRS) business unit, told

"We have capabilities we didn't have 15 or 16 months ago, and we can go to our customers with a set of managed services," he said.

The purchase of Arsenal gives IBM access to mid-market and remote office customers, analyst Dave Russell, vice president for storage software and technologies at research firm Gartner, told

"IBM has a recognized brand name and global reach," he said. "For Arsenal, this is a favorable exit strategy, being acquired by a major vendor, because it allows them to dramatically increase their reach from a geographical perspective. It also gives them substantial marketing and financial backing."

Moreover, he called the SaaS data backup niche a fast-growing market.

"Of all the so-called SaaS technologies, backup is one of easiest to target because customers recognize the need to perform backup and recovery," Russell said.

The managed data recovery market has also seen its share of merger activity recently. In October, for instance, EMC acquired Berkeley Data, whose Mozy online subscription service backs up data on desktop PCs, laptops and remote office servers. And Seagate Technology bought EVault, which delivers online backup, archival and recovery services for SMBs, in December 2006.

According to IBM, Arsenal will become part of its BCRS business unit in the company's global technology services division.

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