This content is part of the Essential Guide: A look back at the 2014 data storage market

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Cloud, flash led storage acquisition activity in 2014

Cloud storage acquisitions were common in 2014 with EMC, NetApp and Microsoft getting into the act, but flash brought in the big bucks.

Cloud technology of all types led the way in mergers and acquisitions in the data storage industry in 2014. Flash technology companies were also scooped up by large vendors, although flash acquisitions were not as prominent as in 2013.

Hybrid clouds, cloud backup and cloud appliances were M&A targets in 2014. EMC, NetApp and Microsoft were among the shoppers for cloud companies. The large vendors sought technologies that could help them utilize the cloud for improving their backup and disaster recovery processes -- and compete with large public cloud providers.

EMC makes four cloud storage acquisitions

In June, Microsoft picked up InMage to enable disaster recovery on its Windows Azure cloud. The plan calls for Microsoft to develop a new backup hardware appliance running InMage software. In October, NetApp made news with an $80 million acquisition of Riverbed Technology's SteelStore backup appliances. The deal was part of a NetApp cloud strategy that also included the launch of a virtual edition of its Data Ontap operating system for the public cloud.

EMC gobbled up three cloud companies in October. The storage giant brought Maginatics, Spanning and Cloudscaling on board to begin building a more robust hybrid cloud offering for its customers. Cloudscaling aids companies in building OpenStack private clouds; Maginatics brings a cloud file system and Spanning made its mark early in the cloud-to-cloud backup space.

EMC also acquired TwinStrata as a cloud tier for storage in July. EMC executives said its main use for TwinStrata technology would be to integrate it with its VMAX enterprise storage array architecture so that customers could easily move data between private and public clouds.

With more customers using the cloud for backup, vendors and service providers set about acquiring competitive technology last year. In December, Datto acquired cloud-to-cloud backup startup Backupify, following EMC into that market.

Fusion-io: Flash's billion-dollar baby

While cloud technology made up the largest volume of storage acquisitions, the big money went to flash buys.

SanDisk Corp. scooped up leading PCI Express (PCIe) flash leader Fusion-io for $1.1 billion in June. That price made it clear that 2014, just like the year before it, was one where cutting-edge solid-state drive (SSD) technology would fuel changes in some market strategies for large vendors. For SanDisk, the acquisition immediately led to questions about whether it would continue selling its ioControl hybrid SAN arrays since they would now compete with systems using SanDisk SSDs.

Hard disk drive (HDD) giant Seagate finally entered the enterprise flash zone in May when it shelled out $450 million for LSI's flash business. As one of the two major HDD players remaining, Seagate took its time getting to the flash party but the Seagate acquisition of LSI's flash technology gave Seagate the second-largest PCIe market share behind the one previously held by Fusion-io.

Aside from those well-established players, some startups were rewarded for their cutting-edge work with flash last year. EMC acquired DSSD, a startup that focuses on server-side flash storage architecture for in-memory workloads such as SAP HANA. Few financial details were made available, and not much was known about DSSD at the time -- but DSSD didn't come out of nowhere. Sun founder Andy Bechtolsheim is DSSD's chairman, and the company boasts a roster of former Sun engineers.

Samsung Electronics bought solid-state caching software startup Proximal Data in November, giving Samsung a flash caching product for virtual machines.

Backup was also an M&A investment area in 2014. Along with the cloud-to-cloud and NetApp's cloud appliance pickups, Hitachi Data Systems acquired virtual tape library pioneer Sepaton.

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