Investopedia: Can Fusion-IO Outrun The Tiger?

There is a saying that goes, "you don't have to be faster than the tiger, you just have to be faster than your slowest friend." That may be a constructive way of thinking about Fusion-IO (NYSE:FIO) today. There's no question that this is a high-growth tech stock with a huge multiple and huge expectations, but that has never stopped those tech stocks that can deliver the goods. (For more, see Earning Forecasts: A Primer.)

Big Data 2.0  
In some respects, what Fusion-IO seeks to do is relatively simple. In the same way that solid-state drives (SSD) have offered consumers considerably better performance than hard disk drives, Fusion-IO is trying to bring the advantages of flash/SSD memory to the enterprise data market.

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Investopedia: Western Digital Doubles Up On Storage

Consolidation is not uncommon in mature industries, and hard computer disk drives are definitely a mature product nowadays. But even though many pundits believe that flash memory will relegate hard drives to the scrapheap of history, Western Digital (NYSE:WDC) seems to think that day is still a ways off. If you want to make a bet on this company, it'll be up to you to decide whether the company is right about its key product's prospects or not. Let's take a look at some of the data.

Western Digital Buys Global Storage Technologies 

On Monday morning, Western Digital announced that it will acquire Hitachi's (NYSE:HIT) Global Storage Technologies unit for $4.3 billion. Western Digital will pay $3.5 billion in cash (which will be funded at least in part by debt) and 25 million shares. That, in turn, will mean that Hitachi will own approximately 10% of the company. The deal also calls for Western Digital to add two Hitachi reps to its board of directors once the deal closes.

Global Storage Technologies is a relatively small part of a huge enterprise and there is not a wealth of financial data available. That said, Hitachi's HDD business has a revenue run rate right now of about $1.5 billion, so Western Digital is paying a little less than three times sales for the deal.

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EMC Buys More Storage Space

EMC (NYSE:EMC) is making one thing abundantly clear - if it has to do with enterprise storage, they are going to have a piece of it. From the first Symmetrix back in 1990, to the latest in software/hardware hybrid, EMC has always been at or near the edge of what is possible with large-scale storage. Now the company is buying Isilon Partners (Nasdaq:ISLN) in what may prove to be a stronger foothold in the next major type of corporate data storage technology. 

The Deal
EMC is paying $33.85 a share in cash for Isilon, a deal that represents a 29% premium for Isilon shareholders and a nearly $2.3 billion bill for EMC. With a termination fee of $100 million attached to the deal, though, it is not unthinkable that other bidders could come into the game.


What EMC Is Getting
Isilon is a very small company in data storage - trailing revenue of less than $200 million, compared to EMC's $16.2 billion - but a very promising one all the same. Isilon specializes in highly-scalable, clustered storage systems that store very large continuous files, and has been involved in this scale-out network attached storage market virtually from the beginning. This market exists because unstructured data is not easily handled by traditional systems, but companies involved in life sciences (sequencing data), media (movies) and energy (seismic data) find they need a better way of handling these huge files. (For related reading, see Xyratex An Interesting Data Storage Play.)

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