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SSD news:- June 16, 2014 - SanDisk today announced a definitive agreement to acquire Fusion-io in all-cash transaction valued at approximately $1.1 billion.

What will SanDisk really get from Fusion-io?

by Zsolt Kerekes, editor - June 16, 2014
The result of combining the product lines from SanDisk and Fusion-io will be an enterprise SSD product offering which is unmatched in the industry in a broad range of enterprise SSD product categories including:-

from Fusion from SanDisk:- The acquisition will enable several new things which would not have been technically possible or profitably viable from either company on its own including:-
  • Fusion-io's software is scalable downwards into more market segments (such as consumer and commodity enterprise array components such as 2.5" PCIe SSDs) which were not attractive for FIO to pursue on it own.

    But for a flash memory company like SanDisk the ability to create controllerless SSDs - would enable entirely new product types to be built. - SSDs built on such technology (without internal microcontroller offload processors) would be the cheapest in class - compared to all traditional SSDs with internal CPUs.
  • Fusion-io's rackmount storage virtualization software will open up new markets for SanDisk's SATA SSDs.

    For example in the no-frills embedded rackmount segment SanDisk would be able to offer customers a rackfull of SATA SSDs as a basic integration component - thereby simplifying integration and support issues for customers who need large quantities of vanilla storage racks.

    And Fusion-io's hybrid array product line - is a ready made platform for spawning a new high end storage array - which could use low cost flash SSDs instead of hard drives.
At the high end business level - for SanDisk - the ability to monetize flash at the rackmount systems level (which is the most efficient way to convert raw flash chips into usable enterprise SSDs) is a rational next step from its acquisition last year of the world leading adaptive controller technology from SMART.

All memory makers are operating under self imposed constraints on investing new capacity for flash wafer starts - while they evaluate what comes next.

So one way to raise the revenue ceiling from the same raw flash is to own big controller architecture with high utilization effectiveness (like that from Fusion-io) which multiplies upwards how many petabytes of virtual usable flash can be delivered to satisfy users compared to other (more) wasteful designs and business channels.

That consideration - the ability to get more enterprise petabytes out from the same raw flash chips in - by shipping it through better architecture - is a more significant business factor in the flash memory market today than the ability to do another cell geometry shrink - or adding a few more layers of toppings on the 3D nand pizza.


What will SanDisk really get from Fusion-io? - more usable flash petabytes out from the same raw wafer starts - due to better architecture.

and here's some more

For those interested in the emerging memory channel SSD market - I've written an article - which speculates what could happen to this class of flash DIMM SSDs in various hypothetical contexts - such as - whether or not SanDisk also acquires Diablo.

See:- MCS versus PCIe SSDs (are they really different?)
SanDisk spins off NexGen
Editor:- January 8, 2015 - SanDisk today clarified that "Hybrid systems incorporating hard-disk drives are not part of SanDisk's strategic focus."

This strategy direction statement by Sumit Sadana, executive VP and chief strategy officer, SanDisk was part of an announcement today that SanDisk has completed the spin-out of Fusion-io's ioControl (hybrid SSD systems) business as a separate company called NexGen Storage.

SanDisk has agreed to be a supplier of PCIe flash storage technology to NexGen but will not maintain an ownership interest.

NexGen will be led by John Spiers who was co-founder and CEO of the original NexGen company before its acquisition by Fusion-io in April 2013 (for $119 million).

Editor's comments:- In retrospect Fusion-io's acquisition of NexGen was a mistake.

Fusion didn't have enough cash or people resources to invest in bootstrapping 2 entirely new systems businesses (one in the fast SSD rackmount market, and the other (based on NexGen) in the hybrid SSD appliance market) at a time when both markets were already becoming much more specialized and differentiated.

Can NexGen succeed as a standalone company?

Hundreds of other companies are also competing in the hybrid market - so you can ask them. Most likely NexGen will get acquired again.
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Why was Fusion-io - the best known and most often admired enterprise SSD company - unable to survive as an independent company?
It's partly an SSD market thing and partly due to the consequences of technology and product choices made by the company. There were many factors:-
  • the rise in quality and general competitiveness of vendors in all parts of the enterprise SSD market.
  • over arching ambition.

    Fusion-io (the company which had created the PCIe SSD market) embarked on becoming an independent presence in 2 major segments of the rackmount SSD systems market too.

    In my view the market imperative to do this was almost inevitable but it also required much more financial resources than simply being a PCIe SSD vendor.

    And the need to seed more resources for the new rackmount systems business came at a time when revenue was flat, the PCIe SSD product line had lost its earlier competitive edge, and the financial markets were downgrading the value of many former leading enterprise SSD companies.
  • being late to market with adaptive DSP flash management technology.

    See more about this below.
the 2012 warning about Fusion-io's late to market next generation flash

In June 2014 - with its Atomic series products - Fusion-io began volume shipments of its 5th generation flash products which were able to use 20nm (approx) nand flash.

This was more than 18 months after vendors like SMART were delivering similar flash geometries to array vendors - in the form of 2.5" SAS SSDs, and 10 months after Violin was shipping the same flash geometries as VIMMs in its rackmount storage arrays.

I analyzed the business risk factors for Fusion-io being late to market with the DSP controller technology required to do this 2 years ao in this article - the Top SSD Companies - in 2012 Q2 - in which I explained why Fusion risked losing its competitive edge due to this deficit - despite being able to mitigate some of the effects.

Looking ahead - as part of SanDisk - and being able to tap into their knowledge base of signal processing and its interaction with flash management - I expect that within 1 or 2 quarters we would see incremental enhancements to the endurance or latency of the Atomic product line - even when using the same memory.

Today - if you're in a big company in a traditional market - and hoping to do something equally big in the SSD market - then $1 billion may not be enough - but $5 billion may be too much.
VCs & SSDs

This new article will attempt to outline some key segmentational factors in the rackmount SSD market which appear to have been mostly overlooked, underrated or neglected for extraction as explicit segments - and which I think deserve more attention, analysis and action by the SSD industry to create a more efficient market which works better for all stakeholders.
Decloaking hidden segments in the enterprise
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