My quick take…
Allowing just long enough for the rumor mill to quiet down a bit after the first suggestions that EMC would buy the Israeli flash array company, XtremIO – and hence at least guaranteeing a second round of publicity! - EMC confirmed this morning that it is indeed breaking into its piggy-bank to buy the start-up. I say ‘piggy bank’ somewhat tongue-in-check. Although no price for the cash purchase was declared, the rumor mill and various ‘close to the president’ sources put the amount north of $400M; that may not be huge for EMC but it is huge for XtremIO (only at early stage VC funding) and it is certainly significant for the storage industry. XtremIO is developing and testing an all-flash array (it is not yet at GA), designed to be scale-out and with a full suite of storage functionality.
What does this mean for EMC? Frankly, it’s important, but it doesn’t show any major shift in its strategic thinking….simply that it clearly thinks the IP at XtremIO moves its flash aspirations and intentions further and/or faster than it could do itself. But the big story hasn’t changed. EMC has been touting for years that flash will be everywhere in the storage stack and that it will live in many flavors. And its sales and marketing shows great progress – its announcement today contained the news that EMC shipped 24PB of flash storage (translation = a lot!) to users last year. XtremIO shows that EMC is prepared to spend to double-down and ensure it has all the bases covered as this flash market develops.
And that’s the bigger point here: in many respects the implicit significance that this represents for the industry is greater than the explicit EMC side of things. It is a signal (or more correctly another signal) that flash is becoming – and going to continue to become – ever more important. Such an early take-out shows that this matters….and it reflects a ‘gold rush’ that we’ve already started to see with other surprisingly early take-outs. AnoBit went to Apple….SanDisk snapped up both Pliant and FlashSoft….Fusion-io took ioTurbine…even the aquisition of SandForce by LSI falls generally into the category…and there are others. Flash itself isn’t the point – instead, it’s all about the management, optimization, and orchestration of flash….software as well as (indeed more than) hardware. So, the vendors that are already competitors to XtremIO (and it’s a big list but the most similar in the big scheme of things are the all-flash folks like Whiptail, Nimbus, Pure, SolidFire, Kaminario, Violin, Pure, Greenbytes and Texas Memory Systems, for example) will likely have a couple of reactions. Any fear of having to compete with EMC in ‘their’ arena will be balanced by an excitement that EMC’s purchase further validates precisely what they have all been doing and advocating in any case….and, furthermore, the EMC marketing machine will help to ‘grow the pie’ for everyone. Oh, and second, they should expect to be busy in the short term, as I’ll lay good odds on the fact that phones at many of those companies (and others that are in the flash software management sphere) will be ringing louder and more often than normal over the coming weeks. They are intrinsically more interesting, and likely more valuable, than they were yesterday. The flash storage market will continue its focus and frenzy for now – and this purchase by EMC will only add to both sides of that.