SanDisk Acquires SSD Maker Fusion-io for $1.1 Billion
SanDisk has been positioning itself as more of an enterprise storage company; Fusion-io's PCIe products will provide major enhancements.SanDisk, best known for making those little blue memory cards for consumer mobile devices such as smartphones and cameras, is pivoting big time into the enterprise. The Milpitas, Calif.-based flash memory provider made a strategic buy into the enterprise solid-state storage business June 16 by acquiring Fusion-io for $1.1 billion. The all-cash offer is for $11.25 a share, 21 percent higher than Fusion-io's closing NYSE price on June 13. The deal has been approved by both company boards. Because the share price went higher on June 16 ($11.40, up about 22 percent from the June 13 close) than the offer price, investors may be anticipating a counterbid from another buyer. SanDisk, whose flash memory chips are widely used in smartphones and cameras to store photos, video and documents, has been developing them to build and sell its own higher-end solid-state drives. The company also makes embedded flash drives, USB flash drives and digital audio players in addition to its flash memory cards and SSDs.
SanDisk Repositioning Itself for Enterprise
"The consolidation wave toward more complete server flash hardware portfolios continues. Western Digital did it in the recent past, and we are now seeing it from SanDisk," Vaghani said.
"Why establish a broader portfolio and business around server flash? I believe that multiple vendors have come to the conclusion that the control point for storage in the software-defined data center is on the server side right beside applications. Server flash is going to be the hardware foundation of that control point. If done right, this might even disrupt a lot of flash-based innovations going on in storage systems today," Vaghani said. More Industry Reaction "It was no surprise that SanDisk is the buyer," solid-state IT analyst Jim Handy of Objective-Analysis told eWEEK. "The company has been using its strong cash position to acquire its way into the enterprise SSD market.
"I think that SanDisk will be a big boost to Fusion-io. Although Fusion-io had a good relationship with Samsung, its customers still will feel better with a captive source of flash supply."
Handy pointed out something that some industry watchers may not know.
"A lot of people think of Fusion-io as a supplier of PCIe SSDs, and that any other PCIe SSD supplier is on an equal competitive footing," Handy said. "In truth, PCIe hardware is just the tip of the iceberg for the company; it has software solutions that few PCIe SSD suppliers even understand. These solutions are what gives the company its competitive edge." Fusion-io has main offices in Salt Lake City, Utah, and San Jose, Calif. Wozniak, co-founder of Apple Computer in the mid-1970s, has served as a key technical adviser to the Fusion-io research and development group since February 2009.