IBM has acquired XIV, a little-known Israeli storage technology company based in Tel Aviv, in what is likely to be its largest acquisition in Israel.

Under the terms of the deal, XIV’s technologies and 50 employees will become part of the IBM System Storage business unit of the IBM Systems and Technology Group.

IBM, which has recently acquired a number of companies in the expanding storage sector, declined to reveal financial terms of the acquisition but reports from Israel’s financial press this week valued it at between $300-350 million.

XIV is a privately-held company founded in 2002 by five graduates from the 14th class of the army’s elite Talpiot program (hence the name – XIV is the Roman numeral for 14). The company’s Nextra architecture took three years to develop, and is designed to address the new requirements associated with next generation digital content.

Nextra can scale dynamically, heal itself in the event of failure, and self-tune for optimum performance, eliminating the management burden typically associated with rapid growth environments. The architecture is also designed to automatically optimize resource utilization of all components within the system, allowing for easier management and configuration and improved performance and data availability.

“The acquisition of XIV will further strengthen the IBM infrastructure portfolio long term and put IBM in the best position to address emerging storage opportunities like Web 2.0 applications, digital archives and digital media,” said IBM System Storage general manager Andy Monshaw.

“The ability for almost anyone to create digital content at any time has accelerated the need for a whole new way of applying infrastructure solutions to the new world of digital information. IBM’s goal is to provide the leading technologies and solutions at every layer of the data center – storage, servers, software and services – to address these new realities IT customers face,” he added.

“We are pleased to become a significant part of the IBM family, allowing for our unique storage architecture, our engineers and our storage industry experience to be part of IBM’s overall storage business,” said Moshe Yanai, chairman of XIV who is also the main investor in the company alongside other private investors. “We believe the level of technological innovation achieved by our development team is unparalleled in the storage industry.”

Yanai, a former executive of storage solutions giant EMC who will stay on at XIV, added that IBM’s sales, manufacturing and distribution capabilities would ensure that XIV’s products would reach a worldwide market. At a press conference in Tel Aviv announcing the acquisition he told journalists that he hoped to increase staff significantly and create jobs for many more people in Israel in an effort to build a large R&D center bigger than Intel.

IBM Israel was founded in 1949 and now employs more than 700 people at labs in Haifa and Rehovot, making it the company’s largest R&D center outside the US.



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