Arik Hesseldahl

Recent Posts by Arik Hesseldahl

NetApp Catches “Flash Madness” in Mysterious Partnership With Fusion-io

Fusion-io, the company that uses flash memory to make conventional servers faster, just announced a mysterious partnership with enterprise storage player NetApp.

It’s kind of a weird announcement, where neither company is disclosing what it’s all about. The only hints we get are from the press release, saying they are:

… working closely with storage industry leader NetApp to provide solutions using server-side flash and caching software products when used in conjunction with the NetApp Virtual Storage Tier. The two companies are collaborating on low-latency, high-performance solutions for compatibility between the Fusion ioMemory platform and NetApp’s Data ONTAP operating system, as well as key caching solutions, including NetApp Flash Cache, NetApp Flash Pool and Fusion-io caching software.

Basically, we’re going to see Fusion’s technology in NetApp products, coming soon to a data center near you.

The news can’t help but be seen as a reaction to EMC’s acquisition of Israeli flash technology concern XtremeIO in May. EMC paid somewhere between $430 million and $450 million for that company, and the combination was seen at the time as a blow to Fusion-io and NetApp. Shares of both have been trading in lower ranges since that deal. Fusion, which first went public last summer, has been the subject of persistent speculation as an acquisition target. EMC’s deal was expected to kick off a round of acquisitions.

The collaboration should also affect the outlooks of Violin Memory and Pure Storage. Violin raised $80 million in a Series D round of venture capital funding in April, at an implied valuation of $800 million, and has been marching steadily toward an IPO no later than October.

Pure Storage is the other flash player worth watching here. It came out of stealth last summer with a $30 million Series C investment and a plan to use flash to disrupt the business of storage arrays.

Fusion, you’ll recall, is a founding member of the Flash Madness Club. Its flash memory insert cards for servers are widely used in data centers of companies like Apple, and Facebook, speeding up the ability of servers to process data by eliminating bottlenecks created by conventional hard drives. Its customers also include Hewlett-Packard, Dell and IBM, among other server manufacturers who offer Fusion’s products, like its ioDrive inserts as a build-to-order option.

The markets don’t quite seem to know what to make of it, either, as all three are falling in premarket trading in New York. NetApp shares fell by 33 cents, or 1 percent, to $32.58, while Fusion shares fell by 13 cents to $19.50. EMC shares fell by 18 cents to $26.38.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work