IBM Continues Move into Flash Storage

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IBM has announced their intention to acquire privately-held flash memory specialist Texas Memory Systems (TMS). This move by IBM is a direct attempt to drive growth in its storage business. 

IBM views TMS's solid state technology as a way to support its own storage solutions. Solid State systems have fewer moving parts than traditional hard disk drives and can offer users faster data-access speeds, as well as lower power and cooling costs.

Traditionally, IBM has been delivering cost effective, power-efficient enterprise solid-state storage technologies and solutions. The addition of the integration of Texas Memory Systems’ offerings will further solidify IBM’s position in the storage market.

According to a research report from IDC, SSD industry’s revenue in 2012 is expected to increase significantly from 2011. This increase will be primarily driven by technology innovations and enhancements and near-term shortages in the hard disk drive segment.

The value of the TMS deal has not been disclosed but we do know that storage is a key focus area for IBM. Revenue from IBM's Systems and Technology group, which encompasses servers and storage, was down 9% during its recent second quarter. Storage hardware revenue was flat year-over-year at constant currency.

The solid state market continues to grow rapidly. According to IDC estimates, solid state technology that is being shipped into enterprises will grow significantly over the coming years, reaching almost 3 exabytes by 2016. To understand the volume of that data, 1 exabyte of data is the equivalent of more than 4,000 times the information stored in the U.S. Library of Congress. This number was taken from a report released by McKinsey last year.

The acquisition seems to makes strategic sense for IBM as solid state storage becomes a more critical part of helping improve performance and lower power requirements in storage systems.

IBM will gain a significant flash storage technical boost with TMS and integrate the technologies across its hardware and software portfolios.

TMS is IBM's fourth storage systems acquisition since 2007. Company-wide, IBM has made more than 100 acquisitions since 2003. The TMS purchase may also have broader implications for the storage industry some analysts have speculated.

The acquisition may cause some rivals to make similar moves. Storage giant EMC which has been touting its VFCache technology as a way to place flash in servers via a PCIe card.

EMC may have to target Fusion-io if its effort with VFCache does not work out. NetApp has recently started a partnership with Fusion-io to secure access to their technology.

Flash specialist Fusion-io, which reported stellar fourth-quarter results last week, has already carved out a lucrative niche in corporate data centers. 

It seems that IBM has made the right move at the right time to secure their position in the flash storage field and add additional value across their hardware product lines.

 

 

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