NetApp Steps Up Flash Storage by Acquiring SolidFire

The acquisition immediately puts NetApp on the map in the new-gen storage market.

NetApp might be the No. 2 enterprise storage provider in the world behind only EMC, but even companies high up in the market's food chain need a spark once in awhile.

The Sunnyvale, Calif.-based company may have obtained something along those lines Dec. 21 with the acquisition of solid-state storage maker SolidFire for $870 million in cash.

Six-year-old SolidFire makes all-flash storage systems for next-generation data centers that focus on automated management, high-end performance and multitenancy, big data workloads and cloud economic models.

The acquisition immediately puts NetApp on the map in the new-gen storage market. While the company has developed its own flash options, its core competency up to now has been in the spinning disk storage world. SolidFire brings with it expertise that NetApp simply didn't have.

SolidFire's competitors include Pure Storage, HPE, EMC, Kaminario, Tegile and several others. 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 on them.

SolidFire was founded in 2009 and is based in Boulder, Colo. It launched its first all-flash arrays in November 2012. The company announced an $82 million funding round in October 2014, which included New Enterprise Associates, Novak Biddle Venture Partners, Samsung Ventures and Valhalla Partners.

NetApp, which has a lot of legacy enterprise customers, needs to find its niche among developing enterprises. It, along with other older IT hardware providers, has been having some trouble for a while. NetApp's revenues fell 2.5 percent overall in 2014, and the company's debt load increased by 50 percent to about $1.5 billion during that span. The company has seen decreasing revenue for the last five years.

NetApp stock was selling for $43 on Dec. 5, 2014, and now is priced at $27.60—a drop of 46 percent in a little over a year.

Last June, the company replaced its CEO, Tom Georgens, with Executive Vice President George Kurian on an interim basis.

"This acquisition will benefit current and future customers looking to gain the benefits of Webscale cloud providers for their own data centers," Kurian said. "SolidFire combines the performance and economics of all-flash storage with a Webscale architecture that radically simplifies data center operations and enables rapid deployments of new applications."

With SolidFire, NetApp will now have all-flash offerings that address each of the three largest all-flash array market segments. For the traditional enterprise infrastructure buyer, NetApp's All Flash FAS (AFF) product line offers enterprise-grade features across flash, disk and cloud resources.

For the application owner, the NetApp EF Series product line offers world-class SPC-1 benchmarks with consistent low-latency performance and proven 6x9 reliability. For the next-generation infrastructure buyer, SolidFire's distributed, self-healing, Webscale architecture delivers seamless scalability, white box economics and radically simple management. This enables customers to accelerate third platform use cases and Webscale economics, Kurian said.

SolidFire is an active leader in the cloud community with extensive integrated storage management capabilities with OpenStack, VMware and other cloud frameworks.

Over time, SolidFire products will be incorporated into NetApp's data fabric strategy, delivering data management across flash, disk and cloud resources. Following the close of the transaction, which is anticipated to occur in NetApp's fourth quarter of its fiscal year 2016, subject to customary closing conditions, SolidFire CEO Dave Wright will lead the SolidFire product line within NetApp's product operations.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 13 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...