SanDisk shook up the enterprise flash market this week, swooping in to acquire Fusion-io in a deal valued at approximately $1.1 billion. The move is likely to accelerate innovation in the Flash market as the big storage players jockey for position in one of IT’s most chaotic, and potentially lucrative markets.

Consolidation began in earnest with Western Digital’s $685 million buyout of Virident last September, and accelerated when rival Seagate shelled out $450 million to take LSI’s SSD assets off parent company Avago’s hands earlier this year. Now, with SanDisk’s latest move, it’s become clear that all the major storage players are betting the future on flash.

John Kim, an analyst with TrendFocus, said this jockeying is all about positioning as the technology goes mainstream in the enterprise. “The players in the storage market understand there’s one potentially lucrative market there, and that all surrounds the cloud and the hyperscale side of the market,” he said. “Everyone’s chasing the business.”

No flash in the pan

There’s plenty of reason to believe that Flash storage is here to stay, and will only become more mainstream in the enterprise. A recent study by 451 Research found that more than half of all enterprises surveyed had already deployed flash, while a significant percentage of those who haven’t made the move plan to do so in the next 18 months.

“The question for most IT managers is not whether they should deploy flash storage, but how they should deploy it,” noted the study’s authors.

Alan Niebel of WebFeet Research told SiliconANGLE that most enterprises understand that flash technology is far superior to traditional spinning hard disk drive (HDD) storage.

“Flash has shown a 10x-100x improvement in performance, a reduction in power consumption vs HDDs, and the capability to enable virtualization, deduplication, and compression all supporting use of flash in the server, storage, and cache in the enterprise,” Niebel said.

Ready, steady, go!

This recent spate of buying activity suggests the flash market could descend into an arms race, as the leading storage players look to bolster their product portfolios.

“[The flash market] looks like the wild, wild west right now in that there are all sorts of companies pursuing all sorts of strategies and technologies to tap into this market,” said Kim. “The big players who are in a cash-rich position are looking at companies to try and understand which one can enhance their chances to capture market share going forward.”

For SanDisk, PCI Express (PCIe) is critical to its plans. Kim described Fusion-io’s technology as the missing piece in the puzzle for its cloud hyperscale ambitions. The technology can significantly boost data transfer speeds and overall performance, and flash offerings give it a clear edge over rival tech.

It’s not clear how long SanDisk can maintain this advantage, though. According to Kim, it’s just a matter of time before PCIe takes off, and when it does become the standard, everyone’s going to be going after it.

“The thing to monitor is if the PCIe technology becomes commoditized, and made available to everyone.” said Kim. “SanDisk can leverage PCIe even when it becomes commoditized because they have a head start and market share, but some of the other players might be able to tap into that technology and give [SanDisk] a run for its money.”

Who will be the next EMC of storage?

The storage space looks to be chaotic over the next 12-18 months as the remaining players scramble to get their flash offerings up to speed. More acquisitions are likely.

“Companies that can’t sustain their business, are going to be up for grabs,” said Kim. “If you look at players like Violin, their business is not as prosperous as it was before, so it potentially could be picked up.”

It’s hard to predict who will be left standing once the dust settles, but the smart money’s on established players like SanDisk and Samsung who are fingers deep in the entire stack, from top to bottom.

“If you’re looking for the next EMC in storage, it’s going to come from the Samsungs, the SanDisks and the Toshiba’s of the world,” said Wikibon analyst David Floyer in a recent segment on theCUBE. “Most of the added value will be in the controllers, in the software at the heart of it. That’s going to be a very different model from the current one, in which the expertise was in how to manage the slow transfer of data from very fast processors down to those disks. It’s the start of profound change in the storage industry.”

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