NetApp acquires flash storage vendor SolidFire for $870M

Publicly traded storage hardware company NetApp today announced that it has acquired SolidFire, a startup that made a name for itself selling fast all-flash storage hardware, for $870 million in cash.

Earlier today CRN reported on rumors of the deal but said the deal would go down for $1.2 billion.

This is a big deal in the storage market, where heavyweight EMC has gradually embraced flash, partly through the acquisitions of XtremIO and stealthy DSSD. Cisco bought all-flash storage maker Whiptail in 2013.

NetApp announced its first all-flash storage hardware product back in 2013, but the company has not been known primarily for flash storage. SolidFire, meanwhile, has won business from several service providers, including 1&1, Colt, Datapipe, and SunGard. Some companies have resisted adopting all-flash arrays because of their price relative to more traditional gear packed with hard disk drives, and the rise of hybrid storage supports the notion of having both flash and disk on hand for different use cases as the price of flash per gigabyte gets closer to disk. However, this acquisition suggests that the days of flash in the data center are closer than ever.

So this is NetApp bolstering its flash portfolio by taking one of the big all-flash players off the market. Having more products that customers genuinely want could help the company more consistently post revenue growth each quarter. And shareholders surely want to see that — the company’s annual revenue fell 3 percent for the year that ended on April 24.

“For the next-generation infrastructure buyer, SolidFire’s distributed, self-healing, webscale architecture delivers seamless scalability, white box economics, and radically simple management,” the NetApp press release said. “This enables customers to accelerate third platform use cases and webscale economics.”

SolidFire’s competitors include Kaminario, Tegile, and Pure Storage, which went public in October. SolidFire isn’t directly competitive with hybrid storage products from the likes of Tintri or publicly traded Nimble Storage, but nonetheless a NetApp acquisition of this scale will still have an impact for them.

SolidFire started in 2009 and was based in Boulder, Colorado. It launched into general availability in late 2012. Investors include New Enterprise Associates, Novak Biddle Venture Partners, Samsung Ventures, and Valhalla Partners. The company announced a $82 million funding round in October 2014.

SolidFire chief executive Dave Wright will lead NetApp’s SolidFire product line after the deal closes, according to the statement.

NetApp stock was up 1 percent in after-hours trading. The company will have a conference call on the deal at 2 p.m. Pacific.