Interesting in depth review for those who predicting takeover of e.DIGITAL by SAMSUNG
When reading the article pay attention to those highlighted area .it may give you a goose bump.......
DISCHINO BEAWARE !!!
SSD Company Acquisitions - examples from StorageSearch.com |
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>SiliconSystems
This is 1 of the 2 most significant SSD acquisitions in the market - because it was a major hard disk oem acquiring a successful flash SSD oem.
SiliconSystems had sold millions of its SiliconDrives into the embedded market prior to the acquisition. |
>M-Systems |
This is the other most significant SSD acquisition, even though it happened in 2006 - because it was a major >flash SSD oem.
Prior to this acquisition M-Systems had developed high speed MLC controller technology and achieved early market success in the use of SSDs in phones. M-Systems had also designed fast 3.5" flash SSDs for use in enterprise servers. The successor to this IP is what made SanDisk itself so attractive as an acquisition target later (in 2008 by Samsung).
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>Adtron |
These are examples of companies which were already in the SSD market acquiring other SSD companies to strengthen their market position or technology. |
>Gnutek and >Micron acquired >Dataram acquired assets of >Density Dynamics assets of >GalaxyStor acquired assets >Hitachi GST acquired Fabrik, parent company of >Curtiss-Wright acquired >Micro Memory |
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When it works well, acquisition is a powerful way of getting a strategic foothold in the SSD market. It gives you access to products and technology which competitors can't easily replicate. And if the acquired company has a strong base of patents than that may provide another lucrative source of revenue in the future.
But what if your needs are tactical? You need to get into the SSD market quickly - but it's likely that your needs will change. You need the flexibility of getting into the technology now - but in a way that doesn't leave you locked into an expensive dead-end if things change?
That's where the next method comes in.
SSD Market - Easy Entry Route #2 - Badge Engineering / OEMing / Integrating Someone Else's SSD ProductThis kind of deal is extremely common in the storage market.
Unlike an acquisition - this is strictly a marriage of convenience. (Sometimes I get the impression I'm reading the pre-nuptial in the text of the OEM Announcement press release.)
One the one side is typically a company which already has an established route to market and strong marketing brand. Let's call them OldRichCorp. Whatever they put in a box - with their label on it - will sell (no questions asked) to their loyal faithful customers. (In real life it's harder than that - but this is the story told by the negotiators in OldRichCorp when they're putting a new contract in place.) The main risk for OldRichCorp is that if it doesn't offer an oemed SSD product at all - then its customers may be tempted to take their whole business to their main competitor OtherBigCorp to get these features. OldRichCorp knows from its long dark corporate history that it should not try to develop this technology in-house. And although it has set up a task force to look into the subject of acquiring an SSD company - it can't afford to wait years without having a saleable solution.
The other partner, let's call them HotTechnologyCo, typically has some best of breed, hot technology product - but suffers from the disadvantage that their product is just a small part of the solution that users buy. Although HotTechnologyCo does sell a proportion of products to end-users - the cost of capturing each new customer is high compared to the value of each product. Much easier to sell at a lower price to volume customers who do all the marketing for you. Unfortunately this almost guarantees that HotTechnologyCo never invests enough resources to stand alone. There are many risks for HotTechnologyCo because the bulk of its business future is in the hands of a single big customer. If sales are low there is little that HotTechnologyCo can do to push sales along. On the other hand, if sales are high - OldRichCorp may be tempted to switch its business to one of many new suppliers emerging in the market.
It would be possible to write a whole book about the
Imagine the irritation that IBM felt in the early 1980s when rushing to cobble together its >late coming to market - and that meant it had limited choices. No realistic choice at all for the microprocessor supplier (Intel had already sown up the market for 16 bit designs) and a limited range of suppliers for a "ready to run OS". Nevertheless those choices had a profound impact on the PC market for the next 25 years. Is it possible that one of the many OEM deals which have already been reported on these pages will have the same effect on the SSD market as those early PC market choices?
I don't think so - because the SSD market is too multi-dimensional and fragmented. But it is nevertheless true that when companies like OldRichCorp cast their favors publicly on suppliers - it helps to advance the whole market - even if they turn out to be transient choices.
"I gave you the best years of my life" wailed HotTechnologyCo when she was dumped by OldRichCorp.
"You were prettier then, and younger" says OldRichCorp. "And I found you playing around with You Know Who."
Markets are cruel. And we hope is that all this Darwinian activity leads to better products sooner.
A note about my use of the terms such as "Badge Engineering" - which sounds derogatory - but which I think (coming as I do from a design background) more accurately summarizes succinctly what goes on in a lot of deals. Does OldRichCorp do anything technical to leverage the products they get from HotTechnologyCo - apart from putting the stuff in a box with their own logo?
They don't even do that to start with. Stage 1 on technical value add - is getting the driver bugs sorted out. Stage 2 may be some parameter tweaks. But in most cases the value added part of the design is easily transferrable to products from another source.
Here are just a handful of examples of SSD OEM deals which have been announced in the SSD market.
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SSD Market - Who OEMs Whom? - some examples from StorageSearch.com |
>STEC
>STEC
>Fusion-io and >Coraid oems >Fujitsu oems >Kingston Technology rebrands >Hynix Semiconductor and >Mtron
>STEC
>Intel, then >STEC
>Texas Memory Systems
>Intel, >Superior Data Solutions |
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Nearly all the examples above relate to high volume deals in the flash SSD market. The exception being Dynamic Solutions International. DSI, for many years oemed rackmount SSDs from Texas Memory Systems, which it integrated into the banking and financial markets. These products were initially RAM SSDs. But the product range now includes flash.
Another difficult to enter market - in which low volumes of SSDs are oemed by other companies is the
- licensing SSD IP (designs, technology and patents)
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Now, having seen the earlier parts of this article, you may have been hoping that this, too, would be another one of those "easy to do" methods which simply requires a big enough credit card limit or intelligent purchasing department. Isn't designing your own SSD from chip level building blocks quite hard?
Yes.
This is not a quick trip to the virtual SSD mall in the hope you'll see some nice bits. You've got to know what you're doing - and what the trade-offs are in reusing 3rd party SSD IP. But it's still a
lot easier than designing everything yourself. And that's why I've included it in this article.
Sometimes companies cross license their patents simply to reduce the risk of being sued by each other - or as the end-point to such litigation.
I'm not talking about such defensive moves here.
A more likely scenario on licensing IP may be that you're working on a small form factor SSD and expect great performance - but while you were designing the media part of the SSD for a SATA-2 interface the external market has moved on - and that doesn't look so attractive any more - or is not the best showcase for your memory performance. Instead your marketers think your product might be better going straight to a SATA-3 or 8Gbps host interface or even PCIe. If you know another company which can offer you a ready to use design - that could shave valuable microseconds off your latency and increase the throughput you can put on the datasheet.
Or maybe you're a http://www.storagesearch.com/raid.html">RAID adapter company and are looking for a new market. Many SSD oems are putting RAID inside their SSD systems - and because of latency issues - that reduces the market for your products (originally designed for hard drives). But have you seen the price they charge for a RAID plus some flash chips? How hard can it be to make money in such a crazy market?