Consolidation in the SSD industry is picking up speed as two SSD vendors get acquired within eight days.
SanDisk, Milpitas, Calif., Tuesday said it signed a definitive agreement to purchase Smart Storage Systems, a developer of enterprise-class SATA and SAS SSDs.
This follows last week's move by Western Digital to acquire sTec as a way to beef up that company's HGST SSD and flash storage business.
Smart Storage Systems had about $25 million in revenue in the first quarter and is on a rapid growth trajectory, according to SanDisk.
SanDisk's acquisition of Smart Storage Systems, like that of Western Digital's acquisition of sTec, shows how strong the consolidation wave is in the SSD industry, said Todd Swank, senior director of product marketing at Equus Computer Systems, a Minneapolis-based system builder.
"When you have so many players in the game, smaller ones with good technology will get gobbled up," Swank said. "SanDisk is now a larger company. It looks like it is in this market for real, unless someone else bigger decides to buy it."
In the SSD market, where smaller companies are competing with the likes of Intel and Samsung and their multiple businesses, the ability of a company such as SanDisk to focus on a single product can be a competitive edge, Swank said.
"SanDisk is a partner of ours," he said. "It has great support staff in the field. They seem to be one of those who will succeed in this business."
SanDisk plans to pay about $307 million in cash along with equity-based incentive awards for Smart Storage Systems. The deal is slated to close in August, at which time about 250 Smart Storage Systems employees are expected to join SanDisk.
This is not SanDisk's first acquisition in the SSD market. SanDisk in May 2011 acquired Pliant Technology, helping launch the company into the SSD market after years of focus on flash memory technology.
A SanDisk spokesperson said the Smart Storage Systems acquisition complements its previous Pliant-based technology by bringing SanDisk its first SATA SSD product line and expanding its SAS SSD line.
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