With $119M NexGen Deal, Fusion-io Targets Hybrid Storage

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A NexGen hybrid storage appliance, which combines Fusion-io Flash memory with the company's software. Fusion-io has now acquired NexGen.

Marking a strategic expansion of its product portfolio, Fusion-io (FIO) announced that it has acquired hybrid storage appliance company NexGen Storage for $119 milion. NexGen appliances are based on Fusion ioMemory, and targeted at small to medium size enterprises. By using software in combination with ioMemory and standard disk drives, NexGen transforms industry-leading x86 server platforms into hybrid storage systems that provide the performance of an all-flash array at a fraction of the cost.

At the core of the NexGen hybrid storage system is ioControl Management software, which shares all storage resources and maintains simultaneous performance targets for multiple applications. It enables IT teams to control and prioritize acceleration for applications.

"Many SME businesses have lean IT teams and budgets, making it critical to offer an integrated and affordable entry point for flash powered application acceleration that delivers consistent performance, even under demanding workloads like VDI and analytics," said David Flynn, Fusion-io CEO and Chairman. "The hybrid NexGen solution combines memory attached flash and disk on leading server platforms to provide a system tuned to deliver performance, price and capacity. With this acquisition, we will maintain the current NexGen product model as we transition to supporting customers’ preferred server platforms with our OEM partners."

Paying approximately $114 million in cash and $5 million in stock for all of the outstanding stock, warrants and vested equity awards of NexGen, Fusion-io will add around 50 NexGen employees to its team. NexGen Storage CEO John Spiers posted a note on the company blog that there really never was an exit strategy - but that he sees this next phase of growth as a new beginning rather than the end.

“We architected our solution around Fusion-ioMemory because it offered the highest reliability, the most predicable performance, and because it is built as a platform for easy developer integration,” said Spiers, co-founder of NexGen and new Fusion-io Senior Vice President and General Manager, NexGen Products. "The NexGen ioControl software uniquely eliminates the need for another layer of latency in storage tiering and the bottlenecks introduced by SSD storage controllers, making it the ideal hybrid system to evolve into an open, software defined platform at Fusion-io.”

Fusion-io also reported financial results for the quarter Wednesday. The NexGen Storage acquisition directly addresses a strategy for the small and medium size businesses, while progress continues to be made with system vendor partners such as HP, IBM and Dell. During the quarterly earnings call the company noted that in the last quarter four customers placed orders in excess of $5 million, and that its "relationship with Facebook and Apple is strong".  It was also noted that global music streaming service Spotify was added as a Fusion-io customer.