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Summary:

The rumor mill is adamant that storage giant EMC is in serious talks to buy Israeli flash-storage startup XtremIO, a move that could trigger an avalanche of flash acquisitions rivaling the scale-out-file-system feeding frenzy a couple years ago. Here’s who might get bought.

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The rumor mill is adamant that storage giant EMC is in serious talks to buy Israeli flash-storage startup XtremIO, a move that could trigger an avalanche of flash acquisitions rivaling the scale-out-file-system feeding frenzy a couple of years ago.

XtremIO's all-flash storage array

Strategically, the move makes sense for EMC. For one, it has promised an all-flash storage array codenamed “Project Thunder,” and XtremIO is building just such a system right now. Talk about good timing. But there’s more, namely the major focus EMC (which is the majority shareholder in VMware) has put on virtualization and big data going forward.

An all-flash array means faster performance across both virtualized and big data environments. Combined with EMC’s server-side PCI flash product called Project Lightning, which keeps hot data in an SSD cache sitting alongside the processor, that’s one powerful hardware platform for tomorrow’s applications.

Keeping up with EMC means going flash

If EMC does pull the trigger, it wouldn’t be surprising to see other flash dominoes fall in a hurry. NetApp, which is allegedly trying to steal XtremIO out from under EMC, would almost certainly have to answer with an acquisition of its own. HP, Dell, IBM, Hitachi Data Systems — everyone, really — would have to kick their flash plans into gear, too.

The reason is this: flash technology is getting cheaper by the day, and new lower prices points — especially when presented in terms of price/performance — are letting flash-storage startups score a lot of customer wins. But flash for primary storage is kind of like open source software, in that until large vendors pin their futures to a technology, it’s difficult for truly big IT buyers to justify investing too much in it. If that technology goes away tomorrow, the CIO who bought it is out of a job.

EMC dropping half a billion on XtremIO and starting to sell all-flash storage arrays makes justifying a flash purchase a lot easier. But if EMC is the only game in town selling flash arrays, then EMC is the only major storage vendor making money off it. And that can’t happen.

Who’ll get bought

Who’s likely on storage heavyweights’ shopping lists if the EMC-XtremIO deal goes through? I’d say Violin Memory is on the top of that list, with Fusion-io not too far behind. They do different things — Violin is flash arrays whereas Fusion-io does primarily flash cache — but they have both have the mindshare and the tech to pay dividends. Other options — which might come at a lower cost than the highly valued Violin and Fusion-io — are Kaminario, which sells some serious systems chock full of flash and DRAM, and Virident, which competes with Fusion-io on the cache front.

After that, a slew of startups that includes Pure Storage, Nimbus Data Systems, Tintri and Nimble Storage have to look appealing. All of these companies have accumulated impressive customer wins and piles of investor cash, and it’s because they can deliver price-performance gains that, presently, most major storage vendors cannot.

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  1. Derrick – a few things to consider – if you are deep in the flash storage space you’ll realize that performance will only take you so far. The real winners in next-generation storage platforms will be those who have deep value-added data services. Deep integration with VMware, Hyper-V, etc., combined with granular snap and replication services. As a result, guys like Violin (who really lake these types of services) are less interesting to many people.

    Net:Net – Performance will be table stakes.

    On EMC + XtremIO side…there is a deeper story that you and the rest of the media are glossing over. Dig deeper.

    1. A fair point, and definitely something you see from the smaller guys like Tintri. Who do you like if you we’re HP or Dell looking for a company to purchase?

    2. Jeff has a great point. We’re in a phase where everyone is developing new system architectures that can take advantage of flash performance. As soon as that happens, the focus will shift to who manages that resource best. Features like storage Quality of Service and performance Service Levels will provide better efficiency which begets better consolidation and opex savings.

  2. rickwestrate Monday, April 23, 2012

    Nutanix brings it altogether nicely flash/storage/compute all in one

    1. I agree, but that’s also why I don’t think it’s a storage acquisition. Nutanix is trying to be something more than storage, which I think will mean a different type of buyer.

  3. Wasn’t EMC the one who invested in XtremIO to begin with?

  4. Derrick, I’m surprised you haven’t included WhipTail on the list. I believe they’ve been around longer than some of the others you mention.

  5. Derrick, I noticed that OCZ was left off the list. They may be servicing small to medium business right now but do their feature sets and the ability to create a large array bring them in for possible acquistion.

  6. Starr Million Baker Tuesday, April 24, 2012

    Derrick – big miss not including WhipTail on the list. Company commercialized the first all-flash storage array, has more customers than any of the ones you mentioned and is about to introduce its next gen product that will blow these guys away. Will send you email with details.

    Thanks,
    Starr

  7. What about TMS (Texas Memory Systems)
    http://www.ramsan.com/products/rackmount-flash-storage/ramsan-630
    The best Storage in Performance, and has experience in Solid State Storage since 1978…

  8. Shocking that Whiptail didn’t make this list. By far the best player in the market.

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