Boston Business Journal - July 12, 2004
|Boston Business Journal - July 12, 2004 |
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EXCLUSIVE REPORTS
From the July 9, 2004 print edition
Storage computing consultant acquires its way to top
Glasshouse leads independents in the land of EMC
Alexander Soule
Journal Staff
Faster than you can say "Cambridge Technology Partners," Glasshouse Technologies Inc. has become the world's largest independent consultancy on storage computing.
Only 3 years old, Glasshouse has 225 employees, following its June acquisitions of Source Consulting and Sagitta Performance Systems, both in the United Kingdom, and the Storage Group Inc., a small San Diego firm.
Storage computer and software companies such as EMC Corp. have begun adding consulting services to their revenue base. Glasshouse competes directly with EMC, but so far has chosen to differentiate itself by not selling products. That makes it largely regarded as the biggest "independent" consultant in the industry.
Glasshouse is one of a trio of smaller companies that have won respect in the field, industry analyst Thomas Lah said, along with Computer Network Technology Corp. (CNT) and Datalink Corp., two Minnesota companies that sell products.
"There is this mad dash for all these storage providers to be solutions providers," Lah said.
"As Glasshouse puts on weight ... they are going to have to figure out what their relationship is to EMC Services or IBM Global Services, companies they work with today that may not want to give up that business."
Several trends are driving the need for vendor-independent consultants. Storage systems are moving from monolith systems to modular networks, and prices are driven down in line with budgets at smaller companies that need help evaluating systems.
In some ways, CNT and Glasshouse are alter egos. CNT is stocked with former employees of Articulent Inc., a Hopkinton storage consulting firm CNT acquired in 2001 for $12 million in cash and $24 million in liabilities.
Articulent alumnus Ed Walsh today leads CNT's sales and marketing; Glasshouse was co-founded by chief technology officer James Damoulakis, also from Articulent.
CNT has increased its professional services sales from $8 million in 2000 to $121 million today and doubled its consulting take in the past year. While Walsh is happy with that growth, he said that EMC and Dell Computer Corp. are charging hard into the consulting arena.
"EMC is making a big charge into (consulting) because clients need help digesting technology," Walsh said, adding, "Dell has changed the game."
Glasshouse recently hired Mark Vargo, formerly of CNT, as its managing director in Europe.
Given Glasshouse's connections with CNT and EMC, has the company considered being acquired by one of them?
"I am not saying (a merger) won't happen, and I particularly would not rule out doing that in the European market," said CEO Mark Shirman.
The storage industry received a reminder this week that the technology recovery is still fragile, after Veritas Software Corp. warned it would miss second-quarter revenue forecasts because of weaker-than-expected U.S. demand. Its stock plummeted 35 percent and dragged down competitors such as EMC more than 5 percent.
ALEXANDER SOULE can be reached at asoule@.
© 2004 American City Business Journals Inc.
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