WD's billion-dollar flash slurps: All this tech, and STILL no deal with chip-fryers
Flashy rumblings after Virident acquisition
Fate of Fusion-io
Fusion-io now faces stronger competition in its server PCIe flash hardware and software heartland, with a Virident boosted by WD finance and channels. Can it survive on its own? It is facing direct product attack from a growing list of strong competitors, viz the list above. Financially it has not delivered on its IPO hopes yet and has undergone a CEO change with follow-on changes in strategy intended to rationalise its channels and increase their efficiency. There is greater emphasis on OEM sales but these depend on the OEM, which could switch to an in-house strategy or alternate supply (witness Violin Memory's experience with HP).
Given the fact that Fusion-io dominates the PCIe SSD market, it is surprising to see Virident's purchase price at exactly half of Fusion-io's current $1.36bn market capitalisation. This is especially remarkable given how much stronger Fusion-io's sales performance is in the market it created.
In other words, Fusion-io is not in as strong a position as we might suppose.
Fusion-io could now be more receptive to purchase or merger approaches from larger suppliers looking to boost their PCIe flash card technology capabilities. As it is an OEM supplier, such approaches wouldn't come from any of its OEMs that compete with its other OEMs – Dell say, or HP.
We could envisage approaches from:
- NetApp – even though that would partially counter its Flash Accel server flash caching software strategy
- LSI, to boost its own PCIe flash technology
These three seem the likeliest candidates to us, although no interest has been declared by any of them, and Fusion-io has not said it is in play. We're convinced there is going to be more consolidation in the flash product supply business and believe that PCIe flash hardware and software is one of the areas showing the greatest competitive tension. Watch this space. ®