Desperately Seeking Flash – Seagate Invests $40 Million in Virident Systems For Joint Flash Solution

Seagate Technology and Virident Systems announced a strategic partnership to jointly deliver flash storage solutions to the enterprise. In conjunction with the partnership, Seagate is investing $40 million in Virident and will appoint a member to its Board of Directors.

With the partnership Seagate will immediately offer a complete line of flash-based PCIe solutions to its OEM and distribution partners.  Both companies will leverage their mutual strengths to create next-generation hardware and software.  Virident will expand its route to market via Seagate’s world-class channels

Seagate has been busy trying to find some footing in the emerging Software-led Infrastructure (SLI) market. Their spinning disk product or “spinning rust”, as David Flynn CEO of Fusion-io calls it, is not positioned for the rapid growth of the new server/storage paradigm that our research team at defined as SLI – see link 

Software-led Infrastructure (SLI) is a new era of datacenter infrastructure is emerging that will result in operational and application changes on a scale that we have not experienced in more than 15 years. At the core of this change is a shift to increasingly software-centric IT operations with the virtualization of the majority of hardware devices across the IT value chain. Pervasive virtualization across compute, storage, and networking technologies means that the point of control for the datacenter will exist in software, not hardware components.

Meanwhile Virident has been smoking hot with their flash products. The management team has done an excellent job of getting out front of the massive flash technology storage market.

“We are extremely pleased to have Seagate as a strategic partner and investor,” said Mike Gustafson, chief executive officer of Virident. “This partnership validates Virident’s vision of pervasive flash in the performance tier and accelerates our shared vision by bringing next-generation SCM solutions to the enterprise and web datacenters worldwide. The agreement also expands Virident’s routes to market today by making our best-in-class PCIe flash products available to Seagate’s world-class channels.”

Below is David Floyer and I talking about the impact Virident and Flash have on these new IO centric or software-led infrastructure.


The SiliconANGLE

Seagate’s high end disk drive business (i.e. the high performance spinning disk business) is basically dead meat.


In order to get high performance from spinning disks you a) spin them faster and b) “short stroke them” meaning that you only use a small portion of the media and limit the movement of the actuator over a smaller physical space (to minimize the mechanical distance a head has to move).

Flash renders this basically useless.

Why? Why Virident and $40m?

Because the advantage of spinning disk is you can jam loads of capacity onto the platters to take advantage of lower costs, but if you’re “short-stroking” drives you defeat the cost angle. So it’s expensive. More importantly,  it’s not that fast because it’s still mechanical.

Flash is electron speeds and with stuff like compression and de-duplication, prices for high end spinning disks and flash drives are colliding– meaning high performance spinning disks are becoming a total oxymoron.  So Seagate’s moves are to try to protect the high end by delivering hybrid drives comprising SSD and spinning disk:


This is a move that will prolong the life of hard drives and offer 3X better performance than spinning disk alone but ultimately flash will rule because it’s 10X+ faster. Costs just have to get closer not equal for flash to really pressure spinning disks. The same thing that’s happened in laptops will eventually happen in servers – it will just take longer.

The other insight from this deal is complete validation of the trend of SLI (Software-led Infrastructure).

For years the storage systems vendors have been marking up seagate disk drives 4-5X or sometimes more. The world is moving to SLI.   Seagate has to to start bundling certain types of software services into its stack to add value.  Not sure they want to wake the giant that is EMC.

The hard drive manufacturer reported earnings per share of $1.38, more than the $1.28 consensus estimate; revenue came in at $3.67 billion, higher than the anticipated $3.58 billion.

Lets see how that goes now that they have a flash angle with Virident.