IBM’s acquisition of Arsenal Digital Solutions is the latest transaction driven by the growing concern among businesses of all sizes that they have to do more to protect their electronic files in order to safeguard against natural disasters and satisfy escalating regulations.

What makes this trend even more interesting is that it has brought greater attention to the fundamental advantages of using a “hosted”, managed service to respond to these business concerns. This has made a widening array of storage, e-discovery and other managed service providers (MSPs) very attractive acquisition targets for an expanding assortment of potential buyers.

Here are a few of the acquisitions which preceeded IBM’s announcement,

Seagate $185 million purchase of EVault
EMC’s $76 million acquisition of Berkeley Data Systems Inc.’s Mozy storage service
Autonomy’s $375 million acquisition of email archiving service provider Zantaz Inc.
A series of acquisitions by Iron Mountain, including … Read More »

Yesterday’s announcement that SunGard intends to acquire VeriCenter clearly indicates that the competitive landscape in the hosting business is rapidly changing.

Not only is this another indication of industry consolidation and the growing role of private equity firms in the IT services sector, it is also another example of how the managed and Software-as-a-Service worlds are converging.

The first message that this transaction sends to any hosting company that hopes to be a market leader is that they can no longer depend on the simple annuity of managed server and co-location services. Instead, hosting industry leaders will need to offer a broader portfolio of managed and SaaS capabilities in order to become a strategic source for their enterprise customers.

Sungard is a perfect example of the power of private equity. On March 29, 2005 the company was acquired by a consortium of seven … Read More »