Fusion-io has just signaled its intention to break even further into the SME market, announcing the acquisition of hybrid flash/disk array vendor NexGen Storage in a deal worth $119 million.

UT-based Fusion-io announced the news in a prepared statement earlier this morning. The startup, which was founded in 2010, has already enjoyed a long relationship with Fusion-io, using its flash cards in its n5 arrays that are primarily targeted at small and medium enterprises. It previously secured around $12 million in funding in series A and B rounds, making today’s acquisition a nice little pay out for its early investors.

About 50 employees from NexGen, including its senior staff, will head on up to Fusion-io, most likely being put to work at its research and development center in nearby Superior, CO.

Writing on Fusion-io’s blog, co-founder and CEO John Spiers gave us his perspective on the deal:

“All of us at NexGen are in it for the long haul. The Fusion-io acquisition is not an exit, it’s the beginning of something great. One of the interesting things about NexGen in light of today’s news is that we never had an exit strategy. Our goal was to grow the company in the way that would best serve the needs of customers. Today, we essentially went public through becoming a part of Fusion-io. Getting to that stage happened a lot more quickly than anyone ever imagined.”

Since its launch in 2010, NexGen has proved a hit with SMEs. Its storage arrays , which based on the Fusion ioMemory virtual storage layer, combine standard disk drives with software to create hybrid systems that offer a similar performance to that of an all-flash array, only for a much lower cost.

Fusion-io was pretty upfront with its reasons for acquiring NexGen, stating quite clearly its interest in breaking further into the SME space.

David Flynn, Fusion-io’s chairman and CEO, presented his vision of how NexGen’s products could be integrated with his own company’s. This should be simple enough, given that NexGen’s core product suite is already built using Fusion-io’s storage layer:

“Many SME businesses have lean IT teams and budgets, making it critical to offer an integrated and affordable entry point for flash powered application acceleration that delivers consistent performance, even under demanding workloads like VDI and analytics. The hybrid NexGen solution combines memory attached flash and disk on leading server platforms to provide a system tuned to deliver performance, price and capacity. With this acquisition, we will maintain the current NexGen product model as we transition to supporting customers’ preferred server platforms with our OEM partners.”

Fusion-io reportedly paid $114 million cash, plus $5 million in stocks to acquire NexGen.

Here with analysis on the acquisition this morning, is Wikibon’s Dave Vellante and David Floyer:

In other news on Wednesday, Fusion-io published its first quarter earnings report, announcing net losses of $20 million, despite seeing revenues of $87.7 million up to the end of march. Fusion-io shares closed down by 17 cents on the news (1.01%), only to shoot up by $1.84 (11.1%) in after-hours trading.