EMC did not release terms of the deal, saying only that it was an all-cash transaction that did not have material impact for its earnings. It said more details will be presented at EMC World May 21-24 (see press release below).
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Flash storage is big because it’s where all large enterprises are moving to store their massive amounts of data — due to its superior performance at lower prices. And big players like EMC have older generation products that don’t perform as well as newer, well, flashier products like XtremIOs. NetApp is another large company, competing with EMC, that is almost certainly looking to acquire a similar player.
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In our previous report, we highlighted that Fusion-io might be the next target. The company is a relatively young, but fast-growing publicly traded company that has qualities similar to XtremIO. It plays at the high-end of the market, offering extremely fast performance. However, Fusion-io’s market value is now significant, and the company appears to be ready to hold out for a higher price, given its momentum.
We’re now thinking Violin Memory might be an easier target. That company plays in the same top end of the market, but is still private, and so more easily acquired. Just ten days ago, Violin said it had finished raising $80 million in its latest round, putting its private valuation at over $800 million. A third company in this segment is Kaminario, which raised a $15 million third round of capital last year from Sequoia and other backers.
In some ways, though, the market for these products can be considered analogous to that of the sports car — a wonderful, beautiful machine that does zero to 60 in a few seconds, and handles corners with ease. Not everyone needs it, but people who cherish performance do. Banks and other institutions with massive amounts of data and requiring speed and precision are the customers in this segment.
Most companies run web sites and infrastructure that don’t require such speed. Carrying the auto industry analogy further, the biggest chunk of the market — the one accommodating most web sites — is served by storage companies that can be considered sedans or SUVs. And that’s where a host of other storage players now operate, according to Kieran Harty, CEO of Tintri, who says his company is like a “higher end sedan.” And in this mid-market, the leading vendors are also using virtualization technology and that’s what is creating so much disruption, Harty said.
So while $400M is a great deal for XtremIo, Harty says he’s looking to build Tintri into a “multi-billion dollar” company.
The EMC-XtremIO acquisition press release is below:
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- EMC acquires Flash storage pioneer XtremIO
- XtremIO’s all-Flash, scale-out, enterprise storage architecture was designed to leverage Flash memory.
- XtremIO technology to complement the range of EMC Flash-based systems and software stemming from EMC’s early entry into the Flash storage market.
- The all-cash transaction is not expected to have a material impact to EMC GAAP or non-GAAP EPS for the full 2012 fiscal year.
- Additional details will be presented at EMC World
Full Story:
EMC Corporation (NYSE: EMC) today announced that it has acquired privately held XtremIO. Widely regarded as one of the world’s premier Flash storage architecture pioneers, Herzliya, Israel-based XtremIO provides an added dimension as EMC® continues to enhance and broaden its world-leading Flash storage portfolio. The all-cash transaction is not expected to have a material impact to EMC GAAP or non-GAAP EPS for the full 2012 fiscal year.
XtremIO’s all-Flash, scale-out, enterprise storage architecture was designed to leverage the speed and unique abilities of Flash memory. The addition of XtremIO extends EMC’s lead in developing and delivering networked storage infrastructures that are dynamically optimized for performance, intelligence, and protection for both physical and virtualized cloud environments.
Additional details will be provided at EMC World, which is being held May 21-24 at the Venetian in Las Vegas.
EMC Flash Leadership
The addition of XtremIO complements the range of EMC Flash-based systems and software stemming from EMC’s early entry into the Flash storage market in 2008 when it became the first to integrate Flash drives into enterprise storage arrays. In 2011, EMC shipped to customers over 24 PBs of Flash drive capacity.
Flash drives in the EMC VMAX , VMAXe , VNX, VNXe and Isilon storage arrays now enable customers to achieve an order of magnitude better performance than 15K HDDs for those applications and data sets requiring the additional performance. Placing Flash technology in the server on a PCIe card, as evidenced by EMC VFCache, can accelerate performance up to another order of magnitude than 15K HDDs. EMC has also announced “Project Thunder,” optimized for high-frequency, low-latency read/write workloads. Project Thunder will build upon the advanced PCIe technology delivered in VFCache to leverage the power of Flash through a dedicated Server Networked Flash-based appliance. EMC FAST (Fully Automated Storage Tiering) software enables customers to automatically move high-performance—or “hot”—data to enterprise Flash drives to improve application and storage system performance, and automatically move less-active data to SAS/FC and NL-SAS/ SATA storage tiers to reduce costs.
EMC Executive Quote
Pat Gelsinger, President and Chief Operating Officer, EMC Information Infrastructure Products
“XtremIO brings to EMC amazing technology with a fantastic team that’s captured praise from early-view customers and many of the industry’s foremost thinkers. We fully expect XtremIO technology, once introduced to market, to have a tremendous impact on our customer’s ability to leverage the unique advantages of all-Flash storage across many of their most demanding applications.”
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