Bloodied SanDisk preps for job cuts after market reading mis-steps

PCIe and SATA Market movements

The second issue is a reduced-opportunity whammy “due to market shifts in PCIe and SATA". PCIe looks bad: “Our Q1 results as well as 2015 revenue estimates for our Fusion-io PCIe solutions are significantly below our original plan".

That’s happening because “a substantial portion of the PCIe TAM (total addressable market) is moving to lower cost solutions using enterprise SATA SSDs".

SATA SSDs have gotten fast enough to make PCIe flash look expensive for the performance it delivers. SanDisk was the PCIe market leader but has a lowly share in the enterprise SATA SSD market. NVMe with its standard drivers should expand the PCIe market, it thinks, and it will introduce NVMe products in 2016.

This is late; HGST introduced an NVMe card this week the Ultrastar SN100.

SanDisk aims to use its own (lower-cost) NAND, using 1Y geometry (c15nm), in new Fusion-io ioMemory PCIe cards later this month, and hopes the PCIe market will grow again in 2016.

Yesterday HP announced it was using newly-developed NVMe PCIE cards with M2 format SSDs from Samsung; Sammy is more sure-footed in the flash market than Sandy.

SanDisk also screwed up in the enterprise SATA SSD market, where the sweet spot is shifting to 2TB, and where it has no product. The hapless CEO said: “We expect our two terabyte enterprise SATA product to be ready for production later this year [and obviously] the current lack of this offering will also impact our enterprise SATA sales this year.”

It never rains but it pours, eh Sanjay?

Again, SanDisk is trying to catch up with a market running away from it: “We are working to improve our market position and broaden our portfolio with multiple new 15 nanometer product offerings launching later in the year.”

Moreover, a billion-dollar target in enterprise sales has been abandoned.

To add to its blackened mood SanDisk saw “softer-than-expected pricing conditions in some parts of our business in Q1, including in global retail sales and in client SSDs” and it saw fast price decline in the private label products area, with over-supply suggested.

Now, another biggy — supply challenges. “Due to our supply constraints, we were unable to meet the timing of delivery required to fulfill all of the demand for a large hyper-scale customer in enterprise SATA", and so it sold less product to that customer.

Management changes and job cuts

These multiple enterprise flash issues might cast uncertainty on the job security of the people in charge, such as John Scaramuzzo, who heads up SanDisk’s Enterprise Storage Solutions division.

Of course, he might point out that if the foundries can’t produce the NAND products his market requires, then it’s not his fault if the reps can’t sell the stuff.

In fact, SanDisk is already restructuring its organisation. “We are combining all of our enterprise solutions teams, including our InfiniFlash system solutions and software, under a unified enterprise group led by Sumit Sadana, our Chief Strategy Officer.”

Hence, “John Scaramuzzo and Ravi Swaminathan, VP Systems and Software Solutions, will report to Sumit.”

Drew Henry, head of the Mobile Solutions Group, gets promoted to look after a combined mobile and client SSD group.

A chief technology officer, Kevin Conley, who previously led the client SSD solutions group, has been appointed and he "will improve our ability to both predict technology trends and tailor our roadmap and investments to meet customer needs".

In engineering, SanDisk is “strengthening product development, validation and qualification processes", and is also reducing the number of platforms and product architectures it supports as it converges product roadmaps.

There will be a five per cent cut in its non-factory headcount in the current 2015 quarter plus other expense-cutting actions.