Data encryption appliance maker Hifn liked working with its customer Siafu Software so much that it decided to acquire the company in a bid to expand its channel and OEM business.
Hifn, a publicly-listed Los Gatos, Calif.-based developer of components and appliances for data encryption and compression, on Monday acquired Siafu, a Poway, Calif.-based developer of small and midsize business iSCSI storage appliances that encrypt data for backup to either disk or to tape, for an undisclosed sum.
Hifn and Siafu have been working together a couple of years on Siafu's Swarm line of automated iSCSI disk-based backup and encryption appliances and its Sypher (stet) line of iSCSI appliances for encrypting data for backup to tape, said Russ Dietz, CTO of Hifn.
Those appliances, along with Hifn's Express DR line of board-level components for accelerating and securing data backups, will be available to small and midsize business customers through the two companies' existing channels and through an increasing number of larger storage vendors looking to develop this market, Dietz said.
Several tier one storage vendors like EMC, Hewlett-Packard, and Network Appliance have recently made moves into the small and midsize storage market, moves that Dietz said mean opportunities for the combined Hifn/Siafu technology.
"We've been looking for better ways to leverage our board-level solutions for data reduction and security in the small and midsize enterprise market, and will add Siafu's appliance technology for OEM solutions," Dietz said.
Hifn's technology roadmap includes the addition of data de-duplication in the near future, Dietz said.
The company, which recently started offering its technology through the channel, expects the channel to be a major part of its business going forward, Dietz said.
Along with Siafu, its technology, and its 100-percent channel model, Hifn also gets its CEO John Matze, one of the co-developers of iSCSI technology and an executive with a long-time history of supporting the channel.
It is still too early to know how the acquisition of Siafu by Hifn will impact Siafu's channels, said Greg Knieriemen, vice president of marketing at Chi, a Cleveland, Ohio-based storage solution provider.
"I'm happy for John [Matze]," Knieriemen said. "But I can't help but be a bit disappointed. John is very easy to work with, is very easy to get access too. John is a true visionary, and having that access is important to us."
Matze, who joins Hifn as its vice president of business development and who will be the face of Hifn's channel presence, said that there is little to worry about in that regard. "We will keep everything the same except the name on the door," Matze said.
The acquisition by Hifn not only makes it easier for that vendor to develop its channel and OEM markets, it will also make it easier for existing channel partners to develop their business, Matze said.
"This extends the relationships we've already built," he said. "VARs have been excited about selling our products, but in the back of customers' minds are concerns about whether we will be funded going forward. That is no longer a concern."
It's true, said Tim Neary, owner and president of Strategic Storage Solutions, an Allen, Texas-based solution provider who has worked with Matze for several years.
"Hifn is certainly better known than Siafu," Neary said. "I've moved about a dozen Siafu units, and had great feedback. But the response often is, who are you? With Hifn's desire to get into the channel, this will be a big help. It will help kick start the business."
Neary said the fact that Hifn comes from mainly an OEM background should not negatively impact Siafu's channel model, Neary said. As an example, he cited the case of Overland Storage, a San Diego-based tape automation and data protection appliance vendor which in the past depended on OEM sales but which later developed one of the strongest channel programs.
"Hifn has people who understand the channel," he said. "The Siafu product lends itself to both ends of the channel. At the low end, it's perfect for companies like CDW. But for VARs, where the business is for appliances with 3 Tbytes to 5 Tbytes, it's not something people can order over the phone with their credit card."
Overall channel management for the new Hifn will be handled by Siafu for the time being, with the two companies' channel programs eventually being blended, said Tom Moore, vice president of marketing operations and sales at Hifn.
"John [Matze] is still the face to the channel," he said. "Hifn has just a handful of VARs. We just started building our channel."
"They have a lot of VARs now," Matze said.