Sun To Resell BakBone Software, Mulls An Equity Stake

BakBone said Thursday that it signed a worldwide technology licensing and distribution agreement with Sun, in which Sun will resell the San Diego-based company's software through its direct and indirect channels.

BakBone also filed a Form 8-K with the Securities and Exchange Commission on Thursday that said Sun and BakBone will negotiate in good faith on an agreement in which Sun will have the right to "purchase authorized but unissued common shares of [BakBone] on terms and subject to conditions to be specified."

Ken Horner, senior vice president of corporate development and strategy at BakBone, refused to speculate on whether the Sun reseller deal and possible Sun investment in BakBone is a prelude to Sun acquiring BakBone.

"It's always nice when a company that does business with you believes in the upside," Horner said. "By partnering with us, they not only help us become successful, but also participate in the upside. Is this a precursor for something bigger? Not from our side. If Sun wants to say something more, it's up to them."

Gastao De Figueiredo, director of strategic software partners and new business ventures at Santa Clara, Calif.-based Sun, said the potential investment isn't a prelude to acquiring BakBone.

"Even if it were, we couldn't comment," De Figueiredo said. "Anyway, we're a computing infrastructure company and not an application vendor."

The comment in the BakBone 8-K filing reflects a standard practice of Sun, whereby the company invests in some of its partners, such as Carlsbad, Calif.-based Dot Hill Systems, De Figueiredo said. He wouldn't disclose other similar Sun investments.

"It's a way for Sun to benefit from the success of our partners," he said. "If Sun sells a bunch of storage software, it won't affect our share prices. But if our partner sells a bunch of storage software, it could result in extra success for Sun."

BakBone, which sells its NetVault line exclusively through indirect sales partners, offers data backup and protection software for multiple platforms, including Windows, Macintosh, Linux, Solaris and other Unix platforms.

Via its partnership with BakBone, Sun will be bringing its channel partners software designed with a single user interface, regardless of which operating system customers employ, Horner said. It is also a much simpler application to deploy compared with offerings from Sun's other storage software partners, such as Symantec or EMC's Legato, he added.

"NetVault ships on a single CD and has less than 1,000 pages in its manual," Horner said. "Symantec's NetBackup comes on 18 to 22 CDs and has over 10,000 pages in its manuals. For Sun partners, there's no need to add complexity."

De Figueiredo said BakBone fills out Sun's data backup and protection software offering at the low end, giving it a full range of products to offer customers and solution providers from the entry level to the enterprise.