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SanDisk acquires Pliant to tackle enterprise SSD market

It’s no secret that there are more solid state drive (SSD) vendors in the market today than can possibly survive, and there is bound to be consolidation through acquisition and some companies folding. One step toward consolidation came today when SanDisk acquired startup Pliant Technology for $327 million, giving SanDisk entry into the enterprise market and providing more resources for development of Pliant’s technology.

SanDisk makes NAND flash products for the retail and consumer markets, mostly smart phones, digital cameras and tablets. Pliant makes enterprise multi-level cell (MLC) and single-level cell (SLC) SAS interface SSD drives, including those used by OEM partners Dell, LSI and Teradata in storage systems and servers. There is no overlap in products between SanDisk and Pliant.

SanDisk’s Chief Strategy Officer Sumit Sadana said the vendor took a look at all the enterprise flash providers before acquiring Pliant because of “the technology that Pliant brings to the table, its credibility with tier one storage OEM customers, and its ramping revenue. Pliant is a leader in MLC-based flash, and that allows customers to gain access to this technology in the enterprise space at a lower cost than SLC. We think that’s the winning approach for the future.”

Sadana said SanDisk will continue to sell Pliant’s SLC flash, but will concentrate on MLC. “We’re not opposed to SLC-based solutions, but we will be heavily driving MLC to dramatically increase the presence of flash in the enterprise,” he said.

He said SanDisk will also continue Pliant’s strategy of selling through storage OEMs. Dell sells Pliant SSDs in its PowerVault storage arrays and PowerEdge servers. Pliant SSDs are also used in storage enclosures sold by LSI and Teradata’s data warehouse systems. Pliant has also been pursuing OEM deals with other major storage vendors.

Sadana said most of Pliant’s 80 employees will join SanDisk, including its founders – president Mike Chenery, chief architect Doug Prins and CTO Aaron Olbrich. Pliant CEO Richard Wilmer, who joined the company in March, will stay on through the transition period but Sadana said Pliant VP of marketing Greg Goelz will run the enterprise business and report to SanDisk VP Sanjay Mehrotra.

Goelz said Pliant, which had $57 million in funding, first approached SanDisk about a strategic relationship regarding SanDisk’s NAND chip. “We were also looking at raising money to fuel 2011 growth,” he said. “They looked at us and said, ‘We want to be in the enterprise, you guys are doing well …’”

He said Pliant did not have to be acquired to survive, but it can benefit from being part of a larger established vendor.

“SanDisk wants to be in the enterprise space and we know one or two things about the enterprise space,” Goelz said. “They’re a technology leader in NAND, and it’s a good natural fit.”

Jim Handy, SSD analyst at Objective Analysis, said he agrees that the two companies are a good fit because Pliant includes enterprise data protection features such as triple-redundant protected meta data and support for the T10 Data Integrity Field standard.

“It’s interesting that SanDisk wasn’t paying the slightest bit of attention to the enterprise before,” he said. “And Pliant is a serious player in the enterprise. Pliant is a company that understands enterprise storage rather than a company that understands flash memory. Most companies trying to get into flash memory don’t understand things like end-to-end data protection. That’s completely alien to people in the flash memory market.”

Handy said SanDisk’s challenge is to adopt an enterprise business model. “It’s a consumer oriented company,” he said. “This will be a new deal for them, not just because of the technology but also because of the sales challenges and the new approach to selling.”

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