I am sure all of you have seen the latest on Violin Memory (the company has five buyout offers after a disappointing IPO). So what are things going to look like in, say, mid-2015 and 2016?
In opening up my crystal ball, I think what will happen is that the NAND suppliers themselves are going to take a lesson learned from others in the industry and move up market. This means that both Samsung, Intel, Toshiba and others that make NAND are going to start making storage devices that can be sold in the market.
NAND is a commodity part that had low margins, even storage devices such as a disk drive have low margins but are likely better than NAND, but storage appliances have way better margins. I think that this is happening in other markets and it will start to happen in the SSD market.
The question is: can these new vendors pull off this huge change? Selling NAND or even selling NAND-based storage is far different than selling to SMB, which is far easier to sell to than the enterprise. There are issues of customer knowledge and expectations on product. The fact of the matter is that today people are looking for integrated products that are appliances that can address multiple types of requirements from big data, to file storage to even object storage. There has to be a lot of software written. The only way to accomplish that in a short period of time is through acquisition.
That means that smaller software companies and hardware companies that have NAS, support big data analysis, support objects and/or have software that helps all of this are going to be on the auction block very soon. If I am right, by mid- to late 2014 we are going to see purchases in this area by the NAND suppliers. Time will tell if I am correct.
Labels: IPO,flash memory,Violin Memory,SSD
posted by: Henry Newman