STEC answers the billion dollar question
Market capitalisation hits ten figures
There is a potential role for SSD technology in storage array controllers but, apart from NetApp with its DRAM-based Performance Acceleration Module (PAM), no storage array vendor is publicly going this route. The exception is Sun which uses its servers to function as controllers in the 7000 series of open storage products.
STEC shows no sign of wanting to have a presence in the net book and notebook SSD markets. It seems content to ride the SSD-replacing-fast-HDD wave in storage arrays, with server SSD use as a sideline. If SSD prices continue declining then we can expect SSDs to start replacing hard drives in the capacity-centric tiers of multi-tiered storage arrays. STEC would be well-placed to capitalise on such a move, with Intel also having potential there.
Basically it seems as if STEC would have to foul up or fall behind in SSD controller technology terms before other HDD-replacement SSD suppliers could get a look in. It's got its first mover rights and aims to keep and build on them. That's bad news for all aspiring storage array SSD suppliers, as they now face an entrenched incumbent. Is STEC the Data Domain of storage array SSD use?
It could well be in that happy situation, and deep-pocketed and aspiring SSD suppliers might well be wishing they had mounted a takeover bid last year, when STEC shares were averaging $8-$9. According to Seeking Alpha, STEC management says three or four more customer announcements are coming and its Zeus-IOPS run rate could hit $100m/year by the end of next year, well up on the current level.
If the SSD and HDD trends are rock solid then STEC could still be a hugely attractive takeover target to a financially strong SSD aspirant. ®
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