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Samsung's Proximal deal follows SSD makers' acquisition trend

Samsung’s acquisition this month of Proximal Data marked the latest in a string of deals by solid-state drive (SSD) makers to beef up their product portfolios with server-based flash caching and other software extras.

The transaction list also includes SanDisk’s purchases of Fusion-io this year and FlashSoft and Schooner in 2012; Western Digital/HGST’s acquisitions of sTec, VeloBit, Virident in 2013; and Toshiba’s addition this year of SSD maker OCZ, which also brought cache software to the picture. Seagate bought LSI’s flash business from Avago this year, and the company could be ripe for another acquisition.

“Increasingly as we look at the market, the competitive field is offering complementary software capabilities to go with their SSDs,” said Bob Brennan, senior vice president of the Memory Solutions Lab at Samsung Semiconductor Inc. “And we saw that we needed to augment our capabilities in this space.”

Brennan said the Proximal Data purchase fell in line with the company’s overall strategy of facilitating SSD-based enterprise storage adoption. He said Samsung views flash as the future, and the company wants to grow aggressively as it transitions from hard disk to flash.

Samsung Electronics Co. Ltd. sold its hard-disk drive (HDD) business to Seagate Technology plc in 2011. The Proximal deal served as a complement to Samsung’s 2012 acquisition of NVELO for client-side SSD caching software. Proximal focused on enterprise server-side caching for virtualized environments with its AutoCache technology, Brennan noted.

“It’s all been an industry trend of drive makers buying into this technology because it will help them sell their flash drives,” said Tim Stammers, a senior analyst at New York-based 451 Research. “It’s just that extra 10% help. The flash drive market is going to commoditize as the controller technology matures, and you’re going to reach out for anything you can find that will help you.”

He said acquiring server-based caching was a natural and predictable move for SSD makers. They can promise customers that the software will make their flash drives even more useful to them. But, there has been little advantage for storage array makers trying to sell server-side flash caching software, according to Stammers.

Stammers said Dell has a strong product with its Fluid Cache, but other major array vendors have been pulling back from server-side caching investments. NetApp took its Flash Accel off the market and told him there wasn’t enough demand to justify the development costs. Stammer said EMC has made no major updates in over a year to its XtremCache server-based, write-through caching software, which was formerly known as VFCache. Hewlett-Packard’s SmartCache mainly targets high-performance computing, he noted.

“We believe quite strongly that it’s only going to be a niche market,” Stammers said. “There are some complications with the way that this type of software interacts with backend arrays, and it only suits applications that are cache friendly. If the caching mechanism works well when it predicts which data is hot, you are going to get low latency. If you get a cache miss, you are not going to get low latency, and the caching software will have done nothing for you.”

Niche appeal or not, Samsung became the latest drive maker to join the fray. Brennan said Samsung is not sure if it will sell Proximal’s AutoCache as a standalone piece of software product or bundle it with another product. He said the company will poll key customers to get their opinions on the technology.

“Over time, not right away, we would expect to provide a complete system solution optimization such that the Proximal software works better with Samsung SSDs,” Brennan said.

Jim Handy, chief analyst at Objective Analysis, said Fusion-io started the server-side flash trend with its success in PCIe SSDs and subsequent acquisition of ioTurbine’s optimization and caching software. He said everyone else is now saying, “Oh yeah, we need that, too.”

“Samsung is very keen on being No. 1 in every market that it participates in, and it’s a very long way from there in the enterprise SSD market right now,” said Handy, noting the company’s strength in consumer SSDs. “This was like putting on the turbo jets to get an important position sooner rather than later.”

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