Fusion-io is one of those companies that comes around just once in a while that transforms the data center. I love this company. Why?  Fusion-io has some of the smartest people in tech, their product is “running the table” on key wins, their CEO was on theCube, and the Woz works there. More importantly, Fusion-io is being used by the smartest and leading companies – just ask Facebook among others leaders. All will privately say Fusion-io is key to their success.

We’ve been following Fusion-io for sometime now and the big time press such as AllThingsD is picking up the Fusion-io trend. With the cloud revolution in full bloom architectures are evolving to meet the demands driven by the surge in new data types and applications.

Why is the Fusion-io trend so important? Because we are seeing more volume, variety, and velocity of data. This is forcing the big data centers and infrastructures to adopt new tech to meet new levels of changing demand and thus new requirements.

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The SiliconANGLE on Fusion-io

Fusion-io describes itself as a a leading provider of data-centric computing solutions – a combination of hardware and software that places data closer to processing, resulting in dramatic improvements in both performance and efficiency. Fusion-io provides persistent flash memory devices that connect directly into a computer server’s PCIe bus resulting in higher application performance.

BusinessANGLE:

Fusion-io is a privately held company with nearly 300 employees as of December 2010. Revenues are undisclosed however sources have indicated the company’s 2010 sales exceeded $200M on a run-rate basis.

Facts

Founded: 2006.

Founders: David Flynn, Don Basile, Rick White

Raise: $112M+ from VC’s including: Lightspeed Venture Partners, New Enterprise Associates (NEA), Dell Ventures, Sumitomo Ventures, Samsung, Accel Partners, Andreessen Horowitz, HP, Triangle Peak Partners, Meritech Capital Partners,

Key Executives: David Bradford, Chairman, David Flynn, CEO and co-founder, Steve Wozniak, Chief Scientist.

Key Customers: IBM, HP, Dell, Credit Suisse, Sybase and several cloud companies including Myspace, Facebook (citation- GigaOm), Wine.com and Cloudmark. Fusion-io claims to have more than 300 customers.

Fusion-io was the first company to develop a hardware and software architecture which allows flash to be viewed as a seamless extension of server-based random access memory (RAM); as opposed to the traditional use of flash as a device that emulates a mechanical disk drive. The Fusion-io implementation results in an order of magnitude lower latency and higher throughput on traditional solid state disk devices (SSDs). Fusion-io’s first mover advantage and strong customer base has allowed it to attract much venture capital investment.

Consumer market innovations generally and Apple innovations specifically, (e.g. iPad, Macbook Air, etc) are pressuring traditional Intel-based market spaces to give similar enhanced user experiences. Over time, either Fusion-io will be adopted as a standard or Intel could create its own PCIe flash architecture placing much pressure on Fusion-io’s market potential. This development will be a key determinant of Fusion-io’s long-term playbook. According to CEO David Flynn, “Our VCs are willing to wait for the home-run…and we’re not in the business of getting acquired. We have the luxury of being able to grow this company without someone with itchy fingers.” Fusion-io will have to carefully play its cards. On the one hand, it doesn’t want sell out early as did VMware – i.e. VMware’s current market value is 58X its sale price to EMC. On the other hand, if Intel aggressively develops its own standard architecture it could crush Fusion-io’s value.

MarketANGLE:

In the 1980s, mainframe-class solid state disks became popular as external devices that attached to servers and emulated disk drives. The advantage of these early systems was they offered very high access speeds but two main drawbacks slowed adoption, including: 1) exceedingly high costs of up to 100X those of spinning disks and 2) lack of persistence which required cumbersome battery backups to protect data in the event of a power loss. In the mid-1980’s, persistent flash devices were introduced but it took decades to meet large enough volumes to become price competitive with spinning disk drives.

In 2004 a significant pivot point revolutionized the industry, specifically Apple’s use of flash in its mini iPod. The enormous volumes of these and other consumer device led to dramatic price reductions and ultimately completely replaced spinning disk drives in lower capacity consumer applications. Apple’s prescient move to flash, which ironically many viewed as ill-advised, catalyzed ubiquitous adoption of flash in mobile devices which led to dramatic price decreases. Prices of flash dropped to around 20-30X the cost of spinning disks and EMC, along with STEC introduced solid state disks into the enterprise storage marketplace in early 2008. These early devices plugged into existing storage subsystems and emulated disk drives. While more expensive, in certain high performance applications these devices could be cost-justified.

Fusion-io’s vision and innovation was that flash technology should not be limited to disk emulation, rather it should be applied to extend server-class memory (i.e. RAM) combining the persistence of traditional disk drives with a lower cost class of main memory. The expectation from many market observers is that these devices will become the de facto standard for all computer systems (i.e. laptops, desktops and servers). Early instantiations of this trend are seen in iPad and Macbook Air systems.

Market Size and Competition:

Fusion-io directly competes in the market for server-class memory. Indirectly the company competes with SSD suppliers such as STEC, Pliant and others. Worldwide spending on Intel-based PC’s and servers is about $280B annually. According to Wikibon, there exists an about $14B market opportunity (a subset of the $280B) for flash as a persistent memory extension by 2015. It is expected that IBM, HP, Sun and Intel will all compete for a share of this market – either by reselling technologies from the likes of Fusion-ion or developing their own architectures. As well, Samsung is expected to enter the market directly. Fusion-io also competes directly with new entrants (e.g. Violin) developing solutions for PCIe connect.

The bottom line from a market perspective is that persistent flash-based memory is completely changing computer system design and architecture. Rather than continuously evolving system architectures in an incremental fashion (e.g. faster buses, more memory, high speed spinning disks, etc), market participants will adopt flash approaches pioneered by Fusion-io as a memory extension and give orders of magnitude performance improvements in the coming decade. Further, high speed spinning disks (e.g. high spin speed, short-stroked devices) will be replaced by either flash or SSDs.

TechANGLE:

Fusion-io’s pioneering development is that its device plugs directly into a PCIe slot, providing direct memory access. Moreover, the company’s architecture allows the flash memory to be used seamlessly, for the first time delivering persistent storage on the processor side of the channel. Because the Fusion-io architecture is an extension of memory, it is a directly addressable resource at a lower cost than RAM. Relative to SSDs, the main advantage of this approach is that it eliminates the protocol overheads of addressing external disk drives– even solid state devices.

Consider current designs and the complexities of achieving data protection. When a traditional server or application crashes, all server data is lost. Data is protected by recovering data written to a persistent disk media device. The complexity of this approach is very high because the enormous speed differences between the processor and the disk drives need complex recovery software to synchronize resources. SSDs, while faster, don’t cut the complexity because they use the same processes and protocols as with spinning disks. In the case of Fusion-io, instead of going through the complex, multi-command process typified by disk protocols (e.g. SCSI), any software can issue a simple write command to the Fusion-io device with the confidence that the data is protected.

The implication of this innovation is that the amount of data that can be read or written by the end user is no longer constrained by the mechanics of disk drives or their cumbersome overheads. The Fusion-io approach enables a 100-fold increase in the data available to a user. The main tradeoff of the Fusion-io approach is that it adds cost to processor design and applications will need to be adapted to take full advantage of these innovations. Databases, operating systems and applications will need to evolve to fully exploit flash as a memory extension.

SocialANGLE:

Flash technology enables the instant-on capabilities of products such as iPad, Macbook Air, Google’s Chrome OS (first seen in the experimental “Netpad” Cr-48) and Android mobile phones.Consumers are increasingly expecting faster, more agile and faster access devices and Fusion-io is an enabler to bring this class of innovation to Intel-based enterprise systems. To a user this means vast amounts of more data available within each application bringing a richer and more productive experience to the enterprise.

A typical use case for Fusion-io technology is to remove database constraints in scale out applications often found in real-time Web and new media examples. Traditionally, social sites such as Facebook and Myspace throw more and more processor, memory and disk resources at performance problems and make only marginal gains. Technologies such as those pioneered by Fusion-io eliminate database bottlencks and allow a more seamless scaling of resources. To users of these services, this means orders of magnitude more data available at their fingertips.

More resources available at:
http://wikibon.org/wiki/v/Category:Fusion-io

[Editors note: Michael Sean Wright, David Floyer and David Vellante contributed to this article. Photo credits to Ricky McGill/SiliconANGLE, Fusion-IO and HotHardware -mrh]

CEO David Flynn Inside the Cube at VMworld 2010 on SiliconANGLE.tv