EMC is muscling its way into the midrange network-attached storage arena, grabbing up a popular NAS software maker and using that technology to develop products that target the customers of NAS leader Network Appliance. Sources close to EMC said the storage giant is planning to release later this year a fault-tolerant NAS product, codenamed Chameleon, that is based on the company's Clariion midrange storage system. Chameleon, designed to augment EMC's high-end NAS products, will incorporate CrosStor Software's popular namesake NAS operating system, which EMC acquired earlier this month when it purchased the company for $300m. EMC officials declined to comment on the planned Chameleon product or the connection between the CrosStor acquisition and the new NAS product. "We can't confirm or deny if [the CrosStor purchase] is related to that launch," said Paul Ross, EMC's manager of Enterprise Storage Networking product marketing. Analysts praised EMC's decision to acquire CrosStor, which produces one of the few robust NAS operating systems available through OEM agreements. "EMC just wiped out 90 percent of the competition in this space because a lot of companies used CrosStor, except for Compaq and Dell, who use [a Windows] NT-based NAS," said Steve Duplessie, an analyst at Storage Enterprise Group. "It was an excellent defensive and offensive maneuver." Others said the move doesn't bode well for some of CrosStor's OEM customers, such as Hewlett-Packard, Connex and MTI Technology, which have storage products of their own that compete with EMC offerings. Although EMC officials said they will honor CrosStor OEM agreements, analysts said that companies such as HP and Connex will probably re-evaluate their relationship with CrosStor now that it is linked to the storage heavyweight. Eighty percent of EMC's sales come from end users. "You are really going to think twice about that relationship because EMC tends to go directly to its customer base," said John Webster, an analyst at Illuminata. "There is no question they have been after [Network Appliance] for quite some time." Officials at HP said they are unsure where their relationship stands with CrosStor now that it belongs to EMC. Meanwhile, Network Appliance customers such as Web-based accounting tools vendor NetLedger were unfazed by EMC's CrosStor purchase. NetLedger forged tight relationships with the company, largely because of its clustering technology and price. "I think EMC is a formidable competitor. It's just that we found they are more expensive. And we are not talking about 15 percent more -— I mean 50 to 60 percent more," said Andrew Daniels, NetLedger's chief operations architect. "You get some great functionality with EMC, if you have the capital to burn." Chameleon is expected to be a Clariion-based NAS device that scales up to 2.88TB with no single point of failure. EMC customer David Knight, founder and chief technology officer at Middlewire, said that EMC grew out of the mainframe world, which does not tolerate downtime, while Network Appliance is more commodity-based. "There is only one level for EMC, and that is platinum. I literally have never seen an EMC product break. I can't say that about other vendors," Knight said. "If they can bring that to the NAS world, they have got a winner." Take me to ZDNet Enterprise Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.