EMC Joins The Flash Madness Club By Acquiring Israel's XtremIO
Storage technology giant EMC said today it has reached a deal to acquired the Israeli startup XtremIO. The price was reported by the Israeli newspaper Globes to be $430 million, but EMC didn't confirm that in a statement.
Context & Ripple Effects
EMC had already used acquisitions to broaden its storage and backup portfolio, including the 2007 purchase of online-backup company Mozy and Data Domain. IBM's purchase of an Israeli storage startup in 2008 also placed Israel's storage sector on the acquisition map for large infrastructure vendors.
The XtremIO deal extends that acquisition-led approach into flash storage, giving EMC a startup capability rather than relying solely on internal product development.
First-order effects
- EMC adds XtremIO and its flash-storage technology to its storage portfolio, while XtremIO moves from an independent Israeli startup into EMC's organization.
Second-order effects
- IBM and other infrastructure vendors seeking differentiated storage technology face a smaller pool of independent startup targets after EMC's purchase.
Third-order effects
- If large vendors continue to buy specialist storage companies, innovation in the segment will increasingly be commercialized through incumbent portfolios rather than standalone suppliers.
The trend: Enterprise infrastructure vendors are using capability acquisitions to secure emerging storage technologies and consolidate them into broader product portfolios.