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NetApp To Acquire Instaclustr: Moving Up The App Stack

‘IT teams used to say they need a data center, servers, storage and on top of that virtualization, Linux and databases. The last people to get in on the decision-making was the app team. Now I want to flip that around and let the app pick the infrastructure,’ says NetApp’s Anthony Lye.

NetApp Thursday said it plans to acquire Instaclustr, a developer of a platform for delivering fully managed open-source database, pipeline and workflow applications as a service. With the acquisition, Sunnyvale, Calif.-based NetApp said it aims to take its technology to yet a higher layer above its traditional storage focus.

The acquisition is expected to close in 30 to 45 days, subject to regulatory approval. NetApp declined to discuss the value of the acquisition.

NetApp’s acquisition of Instaclustr, with its ability to run open-source databases on the cloud and on-premises, is part of what has become NetApp’s centerpiece of optimizing the cloud for customers, said Anthony Lye, NetApp’s executive vice president and general manager for public cloud services.

[Related: NetApp CEO George Kurian: Dell, HPE Are ‘Doing What We Did In 2014’]

“We’re helping clients manage storage from on-prem to the cloud,” Lye told CRN. “Our OnCommand Insight is now a multitenant, cloud-based monitoring platform. And we optimize storage to compute with Spot.”

NetApp’s Instaclustr acquisition is the latest in a series of acquisitions that NetApp has made that has moved the vendor from a focus on storage to one of optimizing data and applications across public clouds and on-premises.

It comes just a month after NetApp acquired Fylamynt, which brought CloudOps automation to its Spot portfolio of cloud-native services.

NetApp in June 2020 acquired Spot, which develops technology to manage and optimize compute instances on public clouds.

Since then, NetApp has expanded the Spot portfolio to include its Ocean Kubernetes DevOps technology; its CloudJumper acquisition, which gave it the ability better manage virtual desktop infrastructure and is now known as Spot PC; its CloudHawk security technology, now known as Spot Security; and its Data Mechanics acquisition for optimizing Apache Spark analytics, now known as Ocean for Apache Spark.

NetApp’s move to optimize hybrid multi-cloud environments above the storage layer is paying off, Lye said.

“A couple years ago, our goal was to reach $1 billion in ARR [annual recurring revenue] by fiscal year 2025,” he said. “Last week, we said at our investor conference we expect $2 billion in ARR by the end of fiscal year 2026.”

For NetApp, the goal is to bring all its “goodness” to wider platforms, Lye said.

“A lot of customers tell us they love our tools, and that we have these cool services,” he said. “But they ask us, what else can we do for them? So we have Spot PC, which lets us run their virtual desktop infrastructures. We have Data Mechanics, which provides customers with a fully managed Spark service. Instaclustr will sit nicely on top of everything we do.”

Customers have alternatives to Instaclustr, but they don’t offer the capabilities NetApp can with Instaclustr, Lye said.

“So for the ability to work across different open-source projects and multi-cloud environments, Instaclustr can be a very valuable service for us.”

Lye said NetApp wants to be part of Platform as a Service and not just Infrastructure as a Service.

“We want to shift as more decisions are made by the application teams than by the IT teams,” he said. “IT teams used to say they need a data center, servers, storage and on top of that virtualization, Linux and databases. The last people to get in on the decision-making was the app team. Now I want to flip that around and let the app pick the infrastructure. We can do that not just at the storage, compute and network layer, but also at the app layer. Customers don’t want to deal with the infrastructure.”

NetApp’s acquisition of Instaclustr is another brilliant move, said John Woodall, vice president of engineering and NetApp enablement at General Datatech, a Dallas-based solution provider and longtime NetApp channel partner.

“In my opinion, NetApp is accelerating their transition towards more automated application pipelines and a DevOps perspective,” Woodall told CRN. “They’re moving up the application stack. Instaclustr fits well with the Spot portfolio. Customers really understand how Spot works with applications.”

Instaclustr lets NetApp move toward more open-source, cloud-native database applications, and helps it do more at the application layer and not just at the infrastructure layer, Woodall said.

“This has big ramifications for making applications more cloud-aware,” he said. “Anthony [Lye] is clearly moving farther into the application and database end of the stack, and making NetApp more application-aware, typology-aware, cloud-aware and even security-aware. This is a different story for NetApp. It’s indicative of the transition to running as a services-led, hybrid cloud capabilities-driven business.”

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