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Western Digital expands flash portfolio with array startup Skyera

Western Digital's latest flash deal comes six weeks after Skyera beefed up the capacity to 136 TB of its single-controller 1U skyHawk all-flash array

Western Digital Corp. this week added dense all-solid-state drive (SSD) arrays to its fast-growing flash portfolio this week, although it's not yet clear if it wants the array platform or only the NAND controller technology.

Skyera will become part of Western Digital's HGST subsidiary. It did not disclose terms of the all-cash deal. Skyera was launched in 2013 by a team of former executives of solid-state drive controller vendor SandForce, and raised at least $57.6 million in funding.

HGST's flash buying spree that began in 2013 includes deduplication and application acceleration technologies of VeloBit, NAND controller technology from sTec Inc., and PCIe-based flash from Virident Systems.

The deal comes six weeks after Skyera beefed up the capacity to 136 TB of its single-controller 1U skyHawk system for unified storage. Skyera first launched skyHawk arrays in 2012, claiming a price per gigabyte of less than $3. The startup started shipping skyHawk in volume in April. However, Skyera was late to deliver its skyEagle 1U dual controller-array, which was originally promised for this year but was pushed back to a mid-2015 target before the acquisition. Skyera claimed it would pack skyEagle with 500 TB of flash storage with enterprise-class data availability and inline data reduction features.

HGST has not disclosed its plans for skyHawk or skyEagle, but the deal does give HGST control of Skyera's controller technology and NAND engineering teams. Skyera integrates consumer-grade multilevel cell NAND flash in its arrays and extends NAND life by lowering write amplification and using adaptive error correction.

Western Digital's press release announcing the deal did not mention skyEagle or skyHawk. It did say, "The acquisition brings engineering talent and intellectual property that will further strengthen HGST's technical expertise and resources."

Mike Gustafson, senior vice president of the flash platform group at HGST, said Skyera has achieved "strong customer validation and pull" in accelerating databases, virtualization and within the federal storage market.

"The Skyera array is one the densest and most efficiently packaged platforms for using flash in environments where it hasn't reached before. It gives us an opportunity to combine Skyera with other HGST technologies to accelerate our own platform strategy of moving up the stack," Gustafson said.

Keeping the Skyera arrays could put HGST in position of competing with OEM partners that sell SSD-based systems. Gustafson said HGST will make final decisions on how to market Skyera arrays during the first half of 2015.

"I think most of our partners will view this as a logical next step in how we deliver a flash platform they can use as a building block," Gustafson said.

Skyera's executive team will join HGST and initially report to Gustafson during the transition period.

Analysts: Lifeline for Skyera arrays, NAND expertise for HGST

Western Digital has made undisclosed cash investments in Skyera, including contributing to a $51.6 million Series B funding round led by Dell Ventures in 2013.

"Flash vendors and hard drive vendors need to move up the stack to increase their margins," said Henry Baltazar, a senior analyst at Forrester Research. "Acquisitions like this are not surprising, since this is the best way for them to accelerate their product development. WD already had a substantial investment in the Skyera, so the move was not surprising."

Baltazar said Skyera probably did not cost "anywhere near what they would have had to pay for a top flash array startup like Pure Storage or SolidFire, who have both taken in a large amount of funding."

The skyHawk's storage density is an order of magnitude greater than that of competitors, but the single-controller arrays have struggled to gain a foothold in enterprise data centers that require highly available storage.

"Skyera was not having a big impact on the flash array market, other than in particular niches for very dense systems. They were still shipping single-controller arrays, which don't give enterprises and service providers the availability they need, and that's been a major sales inhibitor," said Tim Stammers, a senior analyst with 451 Research.

The key to the deal for HGST centers on Skyera controller technology for tuning raw NAND chips. Analysts say it is too soon to know if HGST will re-engineer Skyera arrays or build its own all-flash array.

"It wouldn't surprise me if they end development of Skyera's all-flash arrays, but it wouldn't surprise me if they continued developing them either, because at least they've got a niche market. They could shut down skyHawk and skyEagle, and the deal still might justify itself on the basis of the drive controller technology," Stammers said.

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