Datacenter solutions provider
) recently announced the acquisition of ID7, known for its
advanced storage software solutions. Financial terms of the deal
were not disclosed.
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Founded in 2006, U.K.-based ID7 specializes in making LINUX-based
software defined storage subsystems. ID7's software solutions are
based on an open-source platform named SCST. The platform allows
creation of sophisticated storage devices from any Linux box and
boosts the functionality of servers.
Prior to the takeover, ID7 used to assist Fusion-io in developing
software for its ION Data Accelerator software, which will
transform industry standard servers into shared storage
appliances. Now, with ID7's capabilities, Fusion-io will be able
to offer open source software solutions (SCST) to allow its
customers get advanced storage solutions.
With the SCST offerings, Fusion-io will be in a better position
to compete with its rivals
In Aug 2011, Fusion-io acquired IO Turbine Inc. for approximately
$95.0 million to extend its storage solutions portfolio. IO
Turbine was a provider of caching solutions for virtual
environments. With the new capabilities from IO Turbine, Fusion's
traditional storage platform was able to match the growing
demands for virtualized servers.
With the new improved offering, ioCache, which leveraged IO
Turbine's technology, Fusion-io succeeded in improving adoption,
performance and efficiency of datacenter resources and enabled
optimum utilization of information assets for its enterprise
Most enterprises experience a significant growth in data storage
requirements, annually, due to deployments of new applications
and workload balancing. Input/output-intensive requirements and
overall growth of storage are putting pressure on traditional
storage architectures. This has led to a secular shift toward the
use of flash memory-based storage systems in the datacenter to
make better use of big data.
We believe that with new product offerings based on advanced and
acquired technologies, Fusion-io will be able to secure its
We are also encouraged by Fusion-io's second quarter 2013
results. Revenues grew 43.0% year over year and adjusted earnings
per share were 3 cents, as against 4 cents loss per share in the
year-ago quarter. However, the third quarter guidance was
sequentially weak reflecting order delays from blue chip
customers such as Apple Inc. and Facebook Inc. (FB). Apple and
Facebook constitute roughly 55.0% of total 2012 revenues.
We prefer to stay on the sidelines given increasing competition
in the enterprise storage space and customer concentration risks.
Currently, Fusion-io has a Zacks Rank #3 (Hold).