The High Availability (HA) market has changed significantly in the past few months, the merger of iTera and Vision Solutions was only the start. If rumors are correct the announcement that another HA provider will be brought into the fold will be made in the next few days if not weeks. This will put the merged company in a very good position from a product pricing strategy and allow some of the bickering and marketing fud to be removed from the sales process. You still have alternatives but looking at the market penetration the 3 will have they will obviously have a dominant position. I am not sure why Thomas Cressey decided on this buying spree with the numbers that IBM is publishing about the i5 sales or the number of new installs each of the vendors have been achieving recently. New is the operative word here as replacements have little impact on the overall value of the company and are generally made at a significantly reduced price.
If I was to really push the boundaries of belief with no evidence to back it up I would put IBM in the picture somewhere! IBM has always seen the HA products as a valuable asset to the Hardware sales process. If you have a single message being pushed out there from a single vendor with little or no competition the sales process may be shortened. Confusion about what is the best product is removed, you may still have options but they will be limited. This has to be better for IBM in many ways, they wont have all of the vendors arguing about each others products and replacements will be a thing of the past, plus the customers have a simpler choice to make. The vendors may even set restrictions in the products to ensure each product is priced for a specific environment and you have the choice made for you?
I don’t see this as a major concern, IBM will still want to maintain sales of the HA product because they drive server sales. If they have control over the HA products they will also have the services and maintenance revenue to work from. This should ensure the pricing remains at a reasonable level to ensure the balance is met.
What about the Data Mirror and NoMax companies? Data Mirror is more dependent on its Transformation Server and even though it does play in the HA market I don’t think its pushing hard to gain new customers. Some will obviously still use the Data Mirror product but the value of a Transformation server sales is way in excess of the current HA product sale. NoMax on the other hand has been around for a long time but never really broke into the market, they say they have hundreds of installs worldwide which when put against the install base of the new company which is in the 15,000 range (if sales messages are to be believed) will not put them high on the must have list for a lot of customers.
There are other players again with a very limited install base and I am sure others will see the new market as an opportunity and build further HA solutions. They will however have to build something which competes with the best in the industry and may have a very small window to do that, the new company will not stand still in development terms and has a very large code base to work with now!
The next few months will be critical for the new company in showing that it can manage the integration challenges while still providing the service level the customer base requires. If they fail to do that customers will again be looking for alternatives. Next year the HA market may look very different than today…
Chris…
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