UPDATED 14:47 EDT / AUGUST 29 2017

INFRA

Western Digital inks deal to acquire flash array maker Tegile

Fresh off its purchase of consumer-oriented cloud storage provider Upthere Inc., Western Digital Corp. is making another acquisition that shifts the focus to the enterprise.

The company today announced plans to buy Newark, California-based array maker Tegile Systems Inc. for an undisclosed sum. Tegile’s hardware lineup is divided into two categories: all-flash arrays powered entirely by solid-state memory and hybrid models that also include traditional disk. Since launching in 2009, the company has raised over $174 million from investors.

Tegile’s most recent funding round in April was led by none other than Western Digital. The acquisition is set to buy the storage giant over 1,700 new customers including CVS Health Corp., Bookings.com and the U.S. Department of Defense.

Western Digital plans to fold Tegile into its Data Center Systems division after the deal completes. The company sees Tegile’s speedy flash arrays complementing the ActiveScale system family offered by the unit. Based on traditional disk, the appliances target workloads that prioritize the ability to efficiently storage large data volumes over performance. 

The acquisition of Tegile comes only months after Hewlett Packard Enterprise picked up Nimble Storage Inc., another early entrant into the flash array market, for $1 billion. This consolidation is likely to continue given the fierce competition in the segment. There are well over a dozen players that sell flash storage equipment, while all the leading cloud platforms offer solid-state memory capacity as well.

With that in mind, the deal marks a timely exit for the venture capitalists that invested in Tegile alongside Western Digital. The timing of the acquisition is noteworthy in other respects as well.

Western Digital is reportedly days away from closing an $17.4 billion agreement to buy Toshiba Corp.’s stake in a joint venture that they’ve set up to produce flash chips. The group has been the subject of tense negotiations that had already resulted in one lawsuit so far. Toshiba hopes that a sale will alleviate its dire financial situation, while Western Digital is looking to prevent the business from falling into the hands of a competitor.

Image: Tegile

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