HP has announced plans to acquire storage virtualisation firm LeftHand Networks for $380m (£213m), subject to certain price adjustment conditions.

LeftHand Networks' software is targeted mainly at midsize companies or branches of large corporations, and uses the popular iSCSI storage area network (SAN) protocol to consolidate data into remote data centre storage arrays, allowing data to be transferred quickly between hosts if one goes down.

The company claimed that its software is ideal for backup and recovery operations because it offers data replication, bandwidth management and failover protection.

"Customers need a faster, less complex and more economical route to storage networking to better protect their critical business data," said Dave Roberson, senior vice president at HP StorageWorks.

"The acquisition of LeftHand Networks significantly expands our storage portfolio, enabling HP to deliver an expanded suite of storage functionality, scalable capacity and interconnect options for every budget and performance requirement."

LeftHand Networks recently announced its eighth generation of SAN/iQ storage software designed to simplify the management of virtualisation infrastructures. The software contains technologies such as thin provisioning and linked clones to reduce storage requirements and power consumption.

If the final conditions are accepted, LeftHand Networks' portfolio will head HP's midrange suite of iSCSI solutions, building on HP StorageWorks' All-in-One Storage system and Modular Smart Array offerings that target the low end of the market and the StorageWorks Enterprise Virtual Array line that targets the high end.

LeftHand Networks is an established partner of HP's, already offering certified solutions that work with HP products, including HP ProLiant servers and HP BladeSystem infrastructure.

The firm has 215 employees and more than 11,000 installations across 3,000 customers worldwide. The transaction is expected to close in HP's first fiscal quarter of 2009.

Also announced today was the availability of Microsoft's Hyper-V Server 2008 which is available to download at no cost.

"Customers have been telling us that virtualisation is a top priority, but they continue to face multiple barriers to adoption, such as costs, complex tools and limited certified virtualisation professionals," said Zane Adam, senior director of virtualisation strategy at Microsoft.

"In response, Microsoft is breaking down these barriers through new training programmes and services, interoperability, centralised management tools, and a broad partner ecosystem built around the Windows hypervisor to help make virtualisation ubiquitous."

Microsoft unveiled Hyper-V for Windows Server 2008 in June, but it has lacked vital management support until now. Experts believe that Microsoft might soon have capabilities to match those of virtualisation leader VMware, while being able to beat it on price.

"If you want to virtualise Windows, you still need Windows licences. Microsoft has the ability to offer a more compelling price point," said Chris Ingle of research firm IDC. This is because Microsoft can offer its product for little or no extra cost above that of Windows itself.

However, Ingle added that performance will also prove a key factor in the data centre. "Enterprises will be interested in the overheads of Hyper-V versus those of VMware, and we just don't know enough about that yet," he said.