Israeli media today reported that data storage company NetApp Inc. has quietly acquired a startup called D.Day Labs Ltd. that does business as Cognigo for about $70 million.

NetApp hasn’t said anything officially, but Cognigo confirmed the news itself, first on Twitter and later in a blog posted to LinkedIn by Chief Executive Officer Guy Leibovitz.

Cognigo, which has a headquarters in New Jersey as well as a research and development center in Tel Aviv, sells a data protection platform for companies that need to abide by regulations such as Europe’s General Data Protection Regulation. The platform leverages natural language processing and other artificial intelligence-based technologies to categorize specific types of data according to whatever the regulations demand. It supports data stored in the cloud and on-premises, in both structured and unstructured formats.

Leibovitz founded Cognigo in August 2015, and managed to raise $10.9 million for the company via two separate funding rounds. Crunchbase estimates the firm’s revenue at around $5 million a year.

Globes, which first reported the news, said the acquisition wasn’t entirely unexpected since NetApp has collaborated with Cognigo for several years. The startup’s 35 employees will join NetApp at its Israeli R&D center, which currently houses around 80 to 90 workers and was established when the storage firm bought another Israeli company, Onaro Inc., for $120 million back in 2008.

NetApp’s plan is to use Cognigo’s technology to extend the usefulness of its Cloud Volume ONTAP data management software with the addition of an “AI-driven compliance solution,” Leibovitz said in his LinkedIn blog post.

“The decision to be acquired was a bittersweet one, but I am certain it was the right one,” he said. “In a short amount of time, we reached the escape velocity that every startup craves for. Revenue was tripling almost every quarter. We had a fast-growing number of clients including top banks, insurance and media companies worldwide.”

Analyst Steve McDowell of Moor Insights & Strategy said the Cognigo acquisition might be small, but it’s also a telling one as the storage industry is rapidly becoming less about bytes-on-a-disk and much more about data management.

“This is especially true where compliance and regulation come into play,” McDowell said. “You’re seeing every vendor step up their game around data protection, it’s a red hot market.”

McDowell said the acquisition also highlights the trend of companies increasingly using artificial intelligence software in the data center to manage both their operations and their data.

“In the case of Cognigo, it’s about letting the machine understand the data so that it can drive decisions and make recommendations about data protection and enforcement of regulations,” he said. “Cognigo has unique intellectual property which leverages artificial intelligence techniques to solve these problems. It’s nice technology and a good acquisition for NetApp.”

Constellation Research Inc. analyst Holger Mueller said NetApp was using a tried and tested acquisition strategy to help it transform itself into a provider of more software services.

“Cognigo has an interesting AI-based capability for ensuring data compliance,” Mueller said. “If integrated well, Cognigo will help NetApp gain more relevance, especially in compliance sensitive markets like Europe.”

Photo: NetApp/Facebook