March 30, 2009 – As further evidence that solid-state disk (SSD) drives may actually live up to their hype, Western Digital today announced its acquisition of SiliconSystems, for a reasonable $65 million in cash. SiliconSystems specializes in SSDs for embedded systems.
According to Western Digital, embedded SSDs accounted for approximately one-third (or about $400 million) of the total revenues for SSDs last year. SiliconSystems’ strengths have been in the communications, industrial equipment, medical, aerospace and military markets, and investors in the company include Samsung and SanDisk.
It was no secret that SATA drive specialist WD was planning to increase its presence in the enterprise space, but its next anticipated move was expected to be Fibre Channel and/or SAS drives. WD could still make those moves, but an (inexpensive) acquisition that jump starts the company into the nascent market for enterprise-class SSDs (as well as SSDs for markets such as “netbooks”) seems like a prescient power play.
In addition to the fact that Samsung and SanDisk are investors in SiliconSystems, it’s interesting to note that the company was founded by a former STEC executive. STEC is the early market leader in the enterprise SSD space, having locked up (exclusive for now) OEM wins with big guns such as EMC, Hitachi Data Systems, Sun, and others. It’s unlikely that those big guns will stick with a single supplier for SSDs, so WD’s entry into the market gives it a shot at second-source deals with some of those vendors.
Assuming that SSD manufacturers and their OEMs can get SSD prices down to a point that end users will actually start buying them, the SSD battle could prove very interesting over the next year.
In other SSD-related news today, startup Pliant Technology announced $15 million in Series C funding. Pliant sells Enterprise Flash Drives (EFDs) based on SSD technology and the SAS interface, which it began shipping to OEMs late last year.
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