In a bid to improve its flash memory-based systems and software, EMC (NYSE:EMC), the world’s biggest maker of corporate data storage equipment, has announced that it has purchased flash array start-up XtremIO. The technology acquired will help EMC leverage the advantages that all flash storage offers over conventional storage devices. Though the agreement details were not disclosed, the deal is valued between $400 million and $450 million. 
See our full analysis on EMC
EMC Bets On Flash Memory
EMC has always backed flash memory due to the advantage of added performance offered by solid state drive (SSD) chips. Though this makes its offerings relatively more expensive, the trade-off is worthwhile in light of improved performance. EMC has been promoting in-server PCIe (Peripheral Component Interconnect Express) flash cards, and it recently announced an all-flash array called “Project Thunder” which will contain 15 TB or more of PCIe-based flash storage. This will be connected to server farms through the InfiniBand network protocol. 
The company also has all flash versions of its products such as VMAX array which are more expensive. These are high performance products and are used mostly in big data analytics and large virtual desktop environments. With virtualization and analytics taking off, we expect demand for EMC’s flash-based offerings to grow further.
While the flash storage market is currently small compared to traditional storage arrays, we expect this to grow over time as flash memory becomes cheaper to manufacture. It is unlikely that traditional drives will be replaced by flash drives, though the increasing adoption of tablets and potentially ultrabooks can drive the SSD market.
The XtremeIO acquisition will help EMC build its virtual cloud environment as the former’s enterprise storage architecture is all flash and designed to scale on demand. Performance will also be optimized as flash memory tends to be faster than hard disk drive (HDD).
We have a $40.80 Trefis price estimate for EMC, which is significantly greater than the current market price.Notes: