DDN Acquires Intelliflash AFAs Business from Western Digital
That is going to exist storage systems.
This is a Press Release edited by StorageNewsletter.com on September 20, 2019 at 3:18 pmHere are the two press releases, one from DDN, then the other one from WDC, concerning this acquisition:
DDN Acquisition of Intelliflash Enterprise Storage Business Unit from Western Digital
DataDirect Networks, Inc. entered into a strategic partnership with Western Digital Corp. includes an agreement to acquire Western Digital’s Intelliflash business.
Additionally, the companies will expand their existing relationship through a mutual global strategic sourcing agreement. They are committed to executing a smooth transition for customers and key stakeholders.
Building on its decades-long foundation in the most demanding data environments, DDN its business over the past 12 months by acquiring enterprise and multicloud technologies. This latest acquisition of Intelliflash extends its leadership as a value-add provider of AI and multicloud data management solutions. The strategic partnership also expands the relationship between DDN and Western Digital, enabling increasingly compelling storage solutions with new performance and cost innovations.
“We are delighted to add Western Digital’s high-performance enterprise hybrid, all flash and NVMe solutions to DDN’s industry leading data management at scale product portfolio. We welcome members of the extremely talented WDC Intelliflash team to our rapidly expanding DDN family and look forward to better serving our more than 10,000 customers and 500 partners worldwide with their data challenges across AI, analytics, IoT, multicloud and virtualized environments,” said Alex Bouzari, CEO and co-founder, DDN. “With this acquisition, we are also strengthening our strategic partnership with Western Digital, who will become both a customer of Intelliflash by DDN and a key HDD and SSD supplier to DDN.”
“This announcement represents a compelling step forward for Intelliflash,” said Mike Cordano, Western Digital president and COO. “With DDN’s resources, technical expertise and focus on solving customers’ end-to-end data and information management challenges, we believe Intelliflash will be well equipped to enable new levels of efficiency for customers. We are committed to ensuring a seamless transition for customers and other key stakeholders, and looking forward to building a thriving strategic partnership with DDN.”
Both companies will be working to deliver a seamless transition for customers and partners with a promise of ongoing product availability and continuity of support. Existing Intelliflash customers will benefit from DDN’s focus on storage and data management challenges, expertise in service and support and its broad technology portfolio. DDN will further invest in an accelerated roadmap of the Intelliflash line and will be engaging closely with Intelliflash customers to hear about business challenges and opportunities where DDN can innovate once the acquisition is complete.
Western Digital Announces Sale of Intelliflash Business to DDN and Intention to Exit Storage Systems
Western Digital Corp. entered into a definitive agreement to sell its Intelliflash business to DataDirect Networks, Inc.
In addition, they have agreed to expand their existing partnership through a multi-year strategic sourcing agreement, under which DDN will increase its purchase of Western Digital’s HDD and SSD storage devices.
This announcement is part of Western Digital’s strategic intention to exit storage systems, which consists of the Intelliflash and ActiveScale businesses. The company is exploring strategic options for ActiveScale.
These actions will allow Western Digital to optimize its data center systems portfolio around its core storage platforms business, which includes the OpenFlex platform and fabric-attached storage technologies.
“As we look to the future, scaling and accelerating growth opportunities for Intelliflash and ActiveScale will require additional management focus and investment to ensure long-term success,” said Mike Cordano, president and COO. “By refocusing our data center systems resources on our storage platforms business, we are confident that the Western Digital portfolio will be better positioned to capture significant opportunities ahead and drive long-term value creation.”
“DDN has deep technical expertise and capabilities in high performance and at scale data environments, and is well positioned to build on and accelerate the success of the business,” said Phil Bullinger, SVP and GM, data center systems business. “Importantly, both Western Digital and DDN are aligned in our commitment to executing a smooth transition for all stakeholders. Western Digital will remain one of the largest consumers of Intelliflash products, and customers will continue to receive best-in-class service and support.“
The transaction is expected to close later this calendar year, subject to the satisfaction of customary closing conditions.
Financial terms of the transaction were not disclosed.
Western Digital’s intended exit of storage systems is expected to generate an annual non-GAAP EPS benefit of at least $0.20 starting in 3FY20 ending April 3, 2020. The company will also incur restructuring and other charges, which are not determinable at this time.
Comments
HDD manufacturers never succeed in storage subsystems, mainly because they compete directly with their HDD OEMs and customers integrating their disk drives into their own configurations.
Remember that Seagate sold to Cray its ClusterStor business in 2017 and acquired Xiotech for $360 million in 1992, Xyratex's HDD test systems and HPC storage for $374 million in 2013, and Dot Hill Systems for $696 million in 2015, finally for poor results.
On its side, Western Digital got storage subsystems ActiveScale through the acquisition of Amplidata by HGST in 2015, the huge acquisition of SanDisk in 2016 for $19 billion, and bought Tegile Systems in 2017.
Toshiba was not interested in this activity.
On the contrary, DDN is totally involved in storage subsystems since its inception and already strengthened its position with the acquisitions of Tintri for $60 million in 2018 and Nexenta one year later. It has currently as much as 5,000 enterprise, government, and public-sector customers.
Consequently WD will soon quits storage systems business which consists of the Intelliflash hybrid and NVMe and SAS AFAs sold to DDN, and ActiveScale businesses where it is exploring strategic options. But it will continue to maintain its JBOD and JBOF (just a bunch of flash) expansion racks and storage servers, and pursuing its NVMe-oF platforms.
WD IntelliFlash SAS AFAs
In the deal, WD will become will become a customer of Intelliflash by DDN, and a supplier of HDDs and SSDs supplier to DDN.
In the most recent Gartner Magic Quadrant Primary Storage published on September 17, 2019, DDN and WD are not in the Leaders' Quadrant but in the Challenger one.
Here is an abstract of the opinion from Gartner on Western Digital (Tegile) coming from its Magic Quadrant for Solid-State Arrays published on July 23, 2018.
Only Western Digital SSDs are used in IntelliFlash SSAs, which guarantees cost-effective supply continuity regardless of market dynamics. Being part of a larger vendor has helped to expand the integration of IntelliFlash technology, because IntelliFlash software is now also used as SDS to manage the storage within the converged Western Digital IntelliStack active archive system. The acquisition also provides more investment and engineering resources, but all sales remain indirect through channel partners. As a complement to the existing T4600, T4700 and T4800 series, two new models in the IntelliFlash SSA family have become available in the last 12 months. The first was the high-density HD series, which became available in July 2017. The second was the N Series, which uses the high-performance NVMe internal storage protocol; it became available in December 2017. The storage software that manages all IntelliFlash arrays is also used in the company's hybrid arrays, which enables replication capabilities among all IntelliFlash solid-state or hybrid systems; and all arrays share the same administrative GUI. During 2017, IntelliFlash SSA sales overtook hybrid array sales, and 60% of the revenue is now generated by SSA deployments. With the introduction of the new high-capacity HD and low-footprint, high-performance NVMe-based N5200 and N5800 arrays, the company has continued its cadence of innovation. The breadth of the product portfolio, combined with unified storage protocol support, ease of use and comprehensive guarantees, enable IntelliFlash arrays to be used in virtually any workload or environment.
Strengths
• All IntelliFlash arrays are compatible families that can be used for block and file workloads.
• They are simple to implement with minimum requirements for extra chargeable installation or consultancy services.
• They are highly competitive in price, features and guarantees, and there is no competitive overlap among the product families.
Cautions
• In the APAC region, IntelliFlash SSAs can be purchased only in China through a joint venture with Beijing-based UNIS, which sells the IntelliFlash families under the UniverFlash brand.
• Customer awareness of the IntelliFlash brand and Western Digital as an SSA vendor lags behind the company's larger competitors.
• The IntelliFlash families do not currently offer a cloud gateway or interface to public cloud storage services.
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