Fresh off a better-than-expected earnings report that sent its shares rallying last week, Western Digital Corp. today announced that its ActiveScale object storage business will be acquired by Quantum Corp. in a deal set to close later this quarter.

Western Digital is one of the industry’s main suppliers of disk and flash drives. A few years ago, the company made an attempt to move up the value chain by introducing two storage array lines for data centers. One was the ActiveScale series, while the other was IntelliFlash, a product family Western Digital obtained through its purchase of Tegile Systems Inc. in 2017.

Fast forward to late 2019, and the company’s ambitions for the shrinking storage array market cooled considerably, so it decided to throw in the towel. Western Digital in September sold off IntelliFlash to DataDirect Networks Inc. and started seeking buyers for ActiveScale, an effort that the newly announced deal with Quantum concludes.

The ActiveScale series consists of two disk-based storage arrays designed for storing large amounts of unstructured data inexpensively. The more powerful system of the two, the X100, can hold up to 74 petabytes’ worth of information.

ActiveScale is a logical pickup for Quantum, a San Jose, California-based maker of storage systems for safekeeping unstructured data. The company’s systems are primarily used to store media files such as medical images and film studio video archives. Quantum plans to offer the ActiveScale line to customers as an archiving solution for holding data that isn’t high-priority enough to be stored on a company’s primary storage systems but is used too often to relegate to a slow tape-based archive.

The sale of ActiveScale and IntelliFlash will enable Western Digital to free up resources for its core storage drive business. Mike Cordano, the company’s president, said last year that “by refocusing our Data Center Systems resources on our Storage Platforms business, we are confident that the Western Digital portfolio will be better positioned to capture significant opportunities ahead and drive long-term value creation.”

Those opportunities include the growing demand for the company’s NVMe solid-state drives. Western Digital’s NVMe sales surged more than 50% last quarter, even as its flash business as a whole dropped from $2.2 billion to $1.4 billion year-over-year and total revenues were flat. Still, Western Digital’s financial results beat Wall Street’s expectations on all major counts.

As for Quantum, Chief Executive Officer Jamie Lerner said today that the company will look at the possibility of more acquisitions after ActiveScale. “As Quantum returns to a growth path, we will be evaluating strategic acquisitions that bolster our technology portfolio,” Lerner said in statement. 

Quantum’s quest for growth has been anything but simple. Against the backdrop of the ActiveScale deal this morning, the company resumed trading on the Nasdaq, ending a several-month suspension brought upon by inaccurate financial reports filed before Lerner came aboard as CEO. Quantum last week also posted its first profit in more than four years. 

Photo: CeBIT Australia/Flickr CC