NetApp-SolidFire Deal to Drive All-Flash DCs
As is often the case when there is a major technology disruption, incumbent vendors often wind up paying a premium to acquire rival organizations that are making inroads into their core markets. NetApp's $870 million planned acquisition of SolidFire, a provider of all-flash arrays and associated management software, is no exception.
NetApp CEO George Kurian told financial analysts this week that the deal positions the company to better serve customers moving to all-flash data center architectures. Typically, those customers are using NoSQL or in-memory databases that provide substantial gains in performance when flash memory is used for primary storage.
Naturally, many of the organizations using all-flash arrays are still employing magnetic drives for secondary storage, so the degree to which an organization is all-flash generally only applies to primary storage. The most important consideration from NetApp's perspective is that currently flash memory technologies are the fastest-growing segment of the storage market.
Less clear is how SolidFire and NetApp product portfolios come together over time. SolidFire not only has its own arrays, but its software can be deployed in the public or private cloud. NetApp, meanwhile, has invested heavily over the years in its ONTAP storage operating system. NetApp will continue to sell flash storage based on its existing technologies into traditional enterprise IT accounts. But the FlashRay product line that NetApp developed for so-called all-flash data centers is now being discontinued in favor of the SolidFire portfolio.
NetApp also envisions being able to bridge ONTAP and SolidFire deployments over time, Kurian said. In the meantime, NetApp plans to converge the NetApp and SolidFire sales teams to make sure that conversations between NetApp and its customers remain consistent, he said.
While NetApp is paying cash for SolidFire, the company did acknowledge it is increasing its debt load to generate that cash. That means there will be some pressure on NetApp to generate a return on the SolidFire acquisition to pay down that debt. More than likely, that should result in more incentives for NetApp channel partners to sell SolidFire arrays and software.
Of course, the challenge that NetApp faces is that even though the all-flash market is growing, the level of competition across this category is already fierce. In fact, the acquisition of SolidFire may do as much to accelerate the transition to all-flash arrays as it does to boost NetApps' fortunes. The end result is likely to be even more NetApp customers evaluating all-flash technologies sooner than later.
Of course, as a force in the channel, SolidFire is nearly invisible. Most of the all-flash array technologies created by SolidFire have been sold direct to Web-scale companies. But as SolidFire becomes part of NetApp, the company will likely be looking for help from its channel partners to sell the merits of all-flash technologies from SolidFire into more traditional enterprise IT accounts that, from a technology perspective, are increasingly emulating Web-scale companies in terms of the technologies they acquire.
Michael Vizard has been covering IT issues in the enterprise for more than 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.