SanDisk to Buy Fusion-IO to Capture the Flash-Based SSD Market

SanDisk to Buy Fusion

SanDisk Corp. is all set to buy Fusion-io Inc. for a whopping $1.6 billion. SanDisk is famous for supplying flash storage drive to business customers. To make a much-felt presence in this domain, SanDisk has decided to acquire Fusion-io.

Analyst Steven Fox wrote, “SanDisk was already positioning the company as more of an enterprise storage company … what the Fusion-io deal does is it enhances that significantly.” SanDisk manufactures flash storage drives. The company recently developing solid-state drives using its chips.

The biggest advantage of solid-state drives is speed. SSDs are faster than conventional hard-disk drives. Other advantages are environment-friendliness and better shock resistance. Acquisition of Fusion-io would be marked as a big chip making giant acknowledging a small company’s expertise in a specified field. Fusion-io’s expertise could boost SanDisk’s ongoing effort to move to vertical integration of storage.

Fusion-io employed Steve Wozniak, co-founder of Apple as the company’s chief scientist. The company is specialized in high-end solid-state storage technology. SSD is yet to become all-pervasive in the data storage industry. For that reason Fusion-io’s clientele is not long enough; the clientele, however, includes Facebook and Apple.

The trend of using flash-based SSDs for enterprise storage is gradually increasing. In 2013, almost 4.4 million flash-based solid-state drivers were purchased by corporations. The figure could increase 39% every year till 2018. Thus, the market for flash SSDs is just getting ready. Considering this, Steven Fox said, “It’s leading edge. It’s a question of someone being able to harness that … and drive it to profitability.”

SanDisk has earned a name for providing flash memory storage solution.

SanDisk’s consumer electronics products like pen drive, external hard disks, MicroSD cards, USB flash drives are market leaders. Its competitors are Samsung Electronics, Kingston, etc. In the enterprise storage market, the company doesn’t have a strong presence. With the acquisition of Fusion-io, however, it’s going to change. SanDisk CEO Sanjay Mehrotra indicated this by saying, “SanDisk will have the broadest enterprise flash solution portfolio in the industry.”

After the news of the acquisition broke, Fusion-io’s share price saw an increase of 22%. The stock is now being traded at $11.36. SanDisk Corp. is on the other hand trading at $102 after 3.58% increase.