August 16, 2012

IBM Buys Flash Memory Maker Texas Memory Systems

Michael Harper for - Your Universe Online

IBM announced today they have agreed to buy Houston-based Texas Memory Systems, a flash-memory provider, for an undisclosed amount of money. IBM is looking to boost its offerings as everything in the tech world continues to get faster, leaner and most of all, smaller.

With this latest acquisition, IBM will have quite the impressive portfolio, stocked with both server-side and standalone flash products. According to ZDnet, IBM could use the tech from Texas Memory Systems in their server, software and appliance products.

Texas Memory Systems, (TMS) was founded in 1978 and is a smaller memory provider, employing 100 people. TMS specializes in solid-state drives, which are becoming more prevalent in today´s super-fast, super-slim technology.

TMS also offers flash-embedded PCIe cards and rack-mounted storage solutions.

This kind of memory isn´t only being used in today´s hottest gadgets, however. Data centers and servers are beginning to adopt the new drives, causing many companies such as IBM to acquire these smaller flash providers. EMC corp., for instance, acquired an Israeli storage maker called XtremIO in May of this year. Acquisitions are happening on the other side of the spectrum as well, as SanDisk Corp, maker of flash drives and other storage solutions, acquired a flash software company called Schooner Information Technology this June.

In fact, the IDC analyst group estimates that enterprise systems will be buying up to 3 exabytes (1 billion gigabytes) per year by 2016.

"The [IBM] acquisition makes strategic sense as solid-state storage becomes a more critical part of helping improve performance and lower power requirements in storage systems," said Brian Marshall, an ISI Group analyst, speaking to the Wall Street Journal.

Marshall also says this acquisition is further proof that the future for data centers is in flash.

Today´s announcement falls in line with IBM´s goal to spend $20 billion in the next 3 years on acquisitions. So far, many IBM acquisitions have been in the way of software companies as the company tries to warm up to “high-margin” businesses, such as analytics. Hardware remains an important part of IBM´s business model, however, bringing in 17% of the companies revenue during the second quarter.

According to IBM´s general manager of systems storage and networking Brian Truskowski, this acquisition of TMS will allow the company to boost the performance of their offerings while lowering the cost at the same time, a win-win for any company.

Though IBM announced the acquisition today, the deal isn´t expected to close until later this year.

While the move appears to be a good move overall for both parties, Jack Clark at ZDnet worries that IBM will begin to shut out another of their partners with this acquisition. Fusion-io offers some of the technology in IBM´s PCIe-linked flash cards, a similar technology offered by TMS. According to Clark, if IBM begins to choose TMS´s server-side flash technology over Fusion-io´s then other companies could have cause to worry.

To their credit, Fusion-io´s chief executive told Clark, “All of our OEMs have had multiple sources for customers, so today's announcement from IBM does not change our existing relationship with the company.”

“Ours is a unique software-defined storage approach that will win out over closed, proprietary boxes."