Monday, December 21, 2015

NetApp is on the right track with the possible SolidFire Acquisition

NetApp has had several bad quarters and its core storage business has been in a double digit decline for last 4 quarters.
Today's announcement by NetApp to buy all-flash storage array vendor SolidFire for $1.2 billion could be a step in the right direction. At $1.2 Billion, NetApp has emerged as the front-runner - but there is tough competition from Cisco & EMC.Solidfire makes Scale-out, all-flash storage systems aimed at high performance enterprise needs.
While EMC is market leader in all flash storage array with its ExtremeIO range, NetApp has struggled in recent times. NetApp AFF family of scalable all-flash arrays & E-series have not been able to make it a market leader. This could change with SolidFire acquisition for $1.2 Billion.
All flash storage has been very tricky business for NetApp. Replacing hard drives with SSD is not the best way to build a flash storge array. Software written for a disk based storage system and applying the same on all flash array is just not the right solution. A retrofit solution does not give full benefits of flash and instead it adds tremendous overheards on the faster flash memory.
Netapp's main data storage business is being disrupted by:
  1. Cloud Service Vendors -Azure, Amazon, Google, etc who are offering low price web based solutions.
  2. Server Attached Storage - Nutanix, VSAN, ScaleIO, Hadoop, Open Stack (Cinder/Swift). Server attached storage offers low cost and good performance.
  3. All Flash purpose built array - ExtremeIO, Pure Storage, Violin etc are capturing the high performance mission critical storage systems.
Acquisition of SolidFire is coming at the right time. EMC-Dell merger would mean that other server manufacturers would be more welcoming to NetApp-SolidFire's all fash server storage solutions. NetApp could tie up with server vendors such as Cisco, Lenovo and other ODM vendors and act as a counter weight to EMC-Dell.
Large enterprise customer who need hyperscale soltions for Cloud/mobile apps will find NetApp-SolidFire as a suitable alternative solutions. More importantly, this acquisition of SolidFire will give NetApp an opportunity to rebuild its flash storage strategy and emerge as a strong competition in all flash storage solutions.
The first challenge however is to ensure that NetApp can complete the acquisition of SolidFire and out bid all other suitors. The next challenge is to build upon Solidfire technology & integrate it with NetApp current offerings and position it along side FlashRay arrays.
It is good to see NetApp become active in technology M&A game and develop a strong portfolio of storage solutions.

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