NetApp agreed to buy storage startup SolidFire for $870 million in cash to boost its presence in the growing market for flash systems.
Sunnyvale-based NetApp was the No. 4 player in the market for all-flash devices in 2014 with about $110 million in sales, according to Gartner. SolidFire, based in Boulder, Colorado, had sales of about $50 million that same year, Gartner said. The two companies announced the deal in a statement Monday.
NetApp Chief Executive Officer George Kurian is seeking to trim costs while focusing on areas such as flash storage and software to help companies manage and organize data that is stored both on internal networks and in public cloud systems. At the same time, traditional storage systems are seeing sales declines and Kurian told analysts last month that overall technology spending remains “constrained.” NetApp hasn’t posted a sales increase in the past eight quarters.
Projections for the flash market keep growing as sales for the systems, which stash information on chips instead of hard drives with spinning magnetic disks, almost reached $1.6 billion last year, two years earlier than IDC had predicted. Customers are looking to this type of storage because it is speedier than traditional hard drives and prices for flash are decreasing. Storage market leader EMC, which is being bought by Dell, is also the flash market leader and No. 3 player Pure Storage Inc. has a market value of about $3 billion after holding an initial public offering in October.
NetApp shares finished unchanged in trading Monday at $27.60
