Solid-state storage is not only a hot discussion topic with IT administrators and CIOs; it's also been a hotbed of acquisitions in the last 24 months.
It may not have seemed like a big deal back in August 2011 when Fusion-io acquired caching startup ioTurbine,
EMC acquired startup flash storage vendor XtremIO in May 2012 and IBM bought Texas Memory Systems (TMS) in August 2012, putting all-flash array products in the hands of large vendors instead of just startups.
Intel Corp. followed with its purchase of caching-software provider Nevex Virtual Technologies in the same month. Then Fusion-io got back in the mix when it acquired hybrid-array vendor NexGen in April 2013.
Flash startups have drawn the lion's share of funding money directed to storage companies in recent years, and have developed the technology to bring flash into the enterprise. Large storage vendors have taken advantage of this development by buying startups that have already done it. Henry Baltazar, a senior analyst with Forrester Research Inc., said EMC could have built its own flash array, "But why spend all that time and energy building something from scratch when there was a relatively decent player out there that they could mold into their lineup?"
EMC followed up the XtremIO acquisition by purchasing server-side storage pooling software provider ScaleIO Inc. in July, 2013. The ScaleIO acquisition gives EMC a software-only approach to managing server storage and the technology to combine server-side PCIe and solid-state drive (SSD) flash, as well as hard disk drives (HDDs), into a shared pool.
Arun Taneja, founder and consulting analyst for the Taneja Group, said EMC acquired ScaleIO because its goal is to build an end-to-end flash platform, and that includes moving into server flash.
"EMC does not own the world of servers," Taneja said. "They are more than a storage supplier, certainly, but relative to an HP, IBM or Dell, their biggest missing piece is the server piece."
EMC may have led the industry out of direct-attached storage (DAS) and into SANs in the late 1990s, but now storage is creeping back into the server, "EMC wanted to make sure that it did not miss a beat," Taneja added. "In my view, that's what's most important about the ScaleIO acquisition."
While EMC used flash storage vendor acquisitions to plug technology holes, companies like Western Digital and SanDisk are buying smaller companies to move out of their traditional roles as disk manufacturers and into the enterprise storage arena.
Western Digital announced on June 24 that its wholly owned subsidiary HGST would acquire SSD manufacturer sTEC Inc. to accelerate its participation in the enterprise SSD market. The deal is expected to close by the end of the year.
Then less than a month later, Western Digital bought caching software provider VeloBit Inc. The VeloBit HyperCache software prioritizes data for server-side read and write caching based on data popularity, rather than how recently data was accessed.
SanDisk followed up its February 2012 purchase of caching-software provider FlashSoft Corp. by grabbing enterprise SSD manufacturer Smart Storage Systems this year.
"[SanDisk] is continuing to establish themselves as an enterprise presence," Baltazar said. "They're trying to shed the image of being consumer-only."
Taneja sees both the VeloBit and FlashSoft moves as confirmation that the SSD market is not just about super-fast hardware. The software that manages the super-fast hardware is just as important.
"Both [Western Digital and SanDisk] recognize that SSDs [are much less effective] without appropriate software drivers and something that can put the right data in the cache," Taneja said.
According to Taneja, Western Digital and SanDisk also understand how cloud services are creating a "tectonic shift" in the storage industry, and they are positioning themselves to take advantage of it.
Taneja believes that a storage market ruled by enterprise IT is a thing of the past, and the "reality is that service providers are building clouds like crazy right now."
He said he could see traditional enterprise IT and cloud providers buying the same amount of storage in about five years. "That's a humongously large shift from what it is today," he said.
And because cost sensitivity is so great when building cloud infrastructures, service providers will have greater interest in dealing directly with SSD providers, not the traditional array vendors.
The result of these multiple deals is the consolidation of a market that still likely has far more vendors than can ultimately survive.
"If you look in the market, there's at least a half-dozen or so decent flash array players still out there," Baltazar said.
This week, Violin Memory filed to become a public company and Pure Storage grabbed $150 million in funding. Those moves will likely keep those two all-flash storage vendors independent for a while. But Nimbus Data, Whiptail, SolidFire and Kaminario remain as targets for larger companies hoping to join the flash bandwagon.
"It will be interesting to see how all that shakes out," Baltazar said.