IBM has said that is acquiring teh privately held online storage provider and data protection company Arsenal Digital Solutions based in Cary, North Carolina. It did not disclose the financial terms. The acquisition is subject to regulatory approvals and other customary closing conditions. Upon completion of the acquisition, Arsenal will become part of the 'business continuity and resiliency services' (BCRS) business unit in IBM Global Technology Services. The transaction is expected to close in the first quarter of 2008.

The  acquisition will enable IBM to add online storage services. In September EMC, IBM's rival in data storage solutioins had acquired online backup provider Berkeley Data Systems in September for $76 million.

An emerging worldwide leader in on-demand data protection, "Arsenal's scalable on-demand services architecture provides customers with automated infrastructure management and gives Arsenal the unique ability to provide solutions to all segments of the marketplace," IBM said in a statement.  

The acquisition of Arsenal will bolster IBM's strategy to blend software, hardware, and research into replicable, asset-based standardised services that can be used with multiple clients.

IBM and Arsenal serve small and mid-market businesses as well as large enterprises that need to achieve data resiliency in light of increasing regulatory requirements, explosive data growth and evolving technology requirements. With the acquisition of Arsenal, IBM will provide global clients with security-rich information protection services designed to handle increasing data retention requirements.

Arsenal will bring capabilities in the on-line data protection market, complementing IBM Tivoli's flagship data protection offerings and IBM System Storage solutions for addressing enterprise information protection needs.

"Information protection is not optional for businesses today. Continuity of data, applications, and infrastructure means survival in a world that operates around the clock, regardless of a company's size or industry," said Philippe Jarre, vice president, IBM Global Business continuity and resiliency services. "IBM's leading business continuity and resiliency services, combined with managed services from Arsenal, give IBM the most comprehensive range of information protection services, and provide clients the ability to back up and protect their information in a way that is integrated with their business continuity plan."

"As organisations grapple with stringent government regulations and the continuing explosion of business information, they seek a trusted provider of products and services that will meet their needs on a global scale," says Frank Brick, chairman and chief executive officer of Arsenal Digital Solutions. "Arsenal delivers a comprehensive information protection portfolio that is adaptable to address businesses of all sizes. Our on-demand capabilities, together with IBM's global reach and industry-specific knowledge, position us as a strong competitor in this rapidly growing market."

Arsenal's services are already used by thousands of clients in a wide range of industries including healthcare, hospitality and manufacturing. Arsenal's strategic business partnerships with the world's leading telecommunications providers have helped the company become an industry leader in the on-demand data protection marketplace.

IBM plans to make Arsenal solutions available worldwide through IBM's BCRS services business, through Arsenal's existing channel partners, including telecommunications providers, as well as direct through IBM.com and from select business partners.