This week we have seen yet another brace of storage vendor acquisitions – and it’s only Tuesday. As announced today, Whiptail Inc are to be acquired by Cisco as technology to be integrated into their UCS stack. Earlier this week (i.e. yesterday), Virident Systems Inc were acquired by Western Digital (WDC), one of the top two hard drive manufacturers.
Whiptail have been in the all-flash array market since 2009. Their Accela and Invicta platforms provide scalable high-performance very low latency solutions of up to 30 nodes and 360TB in capacity. I’ve frequently mentioned the company, although not written full review of their technology. A couple of years ago I met up with Dan Crain, CEO, in London and we chatted about their storage offering and his approach to selling into what is a more complex and specific marketplace. It was clear from Dan’s approach that he wasn’t interested in mega-growth but wanted to focus on working with customers that understood why flash was important to them; there were enough out there to keep the company on a growth curve, so he claimed. Probably the only negative I can see in this announcement is the purchase price – $415m. EMC paid a rumoured $430m for XtremIO with no paying customers and no GA products to date, so either someone overpaid or underpaid here.
So what does acquisition by Cisco mean? Most obviously it means in high-performance environments, Cisco won’t be dependent on partners like NetApp or EMC to provide storage solutions. The question is whether this will have any effect on partnerships like VCE. With VMware acquiring Nicera and releasing their own virtual network platform, NSX, this move by Cisco could signal the breakup of the VCE coalition. How will VCE choose which flash platform to use in their deployments – XtremIO or Whiptail? At the moment, XtremIO isn’t fully GA, but that shouldn’t stop its use, however a quick check of the Vblock specifications show no all-flash offerings. Perhaps Cisco is ready to go it alone.
Virident are one of the vendors in the widening market of PCIe SSD cards, competing against Fusion-IO, EMC, LSI and others. Western Digital are a hard drive manufacturer that came from the domestic market but has in recent times have widened their portfolio with the acquisition of HGST (Hitachi Global Storage Technologies) to provide an enterprise focus and are in the process of acquiring sTec, to add the SSD layer of that strategy. Adding in Virident provides that next layer of commodity storage components, spanning server to storage array. WDC have had quite a change in direction as they evolve their business to reduce dependency on the hard drive market. Whilst hard drives will be around for some time yet, they will continue to be a low margin business with greater profits being derived from the SSD side of the house. The first question that springs to mind is the effect on Seagate, who have SSD but no PCIe products – but do OEM Virident. I can’t see that partnership going any further after the acquisition, which puts Seagate in the marketplace for a new partner or having to acquire someone themselves. At $14.5bn or thereabouts, Seagate could put in a bid for Fusion-IO, however even at today’s market value that’s still twice what WDC paid for Virident, making WDC’s move look even more well timed.
The Architect’s View
The storage market isn’t all about disks and storage arrays. It spans from the application downwards, being integral at every level. These acquisitions show that storage is an important piece of a unified strategy for converged infrastructure and building a wide-based portfolio. In fact, as the market consolidates, it may mean things get tougher for the independents – those not selling compute/network/storage or those without a wide enough portfolio to target customers with multiple offerings and upsell their whole portfolio. Interesting times indeed.
- WD’s billion-dollar flash slurps: all this tech and still no deal with chip fryers (Chris Mellor, The Register)
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