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EMC gobbled XtremeIO to Xterminate NetApp, says Xpert

And Fusion-io 'a mosquito they could squash at any time'

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A financial analyst reckons EMC bought XtremIO to fend off the threat posed by NetApp.

Andrew Nowinski, an analyst at Piper Jaffray, had this to say in a recent research note: "We believe this threat of potential market share gains from [NetApp's Data ONTAP] 8.1 is what prompted EMC to acquire XtremIO for $430m."

We asked Nowinski to explain his reasoning, and he replied:

I think many investors assumed the acquisition was targeted at Fusion-io. In my opinion, EMC views Fusion-io as a mosquito they could squash at any time and have no fears of losses to them.

In the large, mid-size enterprise market, EMC has a two-headed monster. The VNX is a “scale-up” architecture, that offers good database performance, good data management functionality and can be used in VMware environments, though it is complex to manage as there are still two underlying operating systems. They also offer as Isilon, as a “scale-out” architecture. The problem is that Isilon offers no data management functionality, poor performance and the block sizes are simply too large to run in a VMware environment.

NetApp’s 8.1 essentially combines these two platforms and offers a scale-out architecture, good performance via PAM cards and great data management functionality, all in the same, easy to manage OS.

Rather than combine Isilon and VNX somehow, EMC acquired XtremIO. XtremIO offers scale-out, great data management and great performance. In fact, their subsystem was built specifically for flash, whereas flash was an afterthought for NetApp (they still leverage an HDD-optimized subsystem).

What do you think, Reg readers? The logic's good but is it right? Comments to this forum topic, please. ®

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