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On September 10, 2013, Cisco announced to acquire the privately held company, Whiptail, a vendor of solid state storage systems.

Neuralytix believes that this acquisition is very serious about taking on the virtual desktop infrastructure (VDI) market. Whiptail had previously focused one of its marketing efforts around VDI, and its acceleration. Neuralytix believes that Cisco is likely to leverage the software intelligence from this acquisition and integrate it into its UCS server platform. By acquiring Whiptail, Cisco increases it ability to optimize the I/O’s, and therefore, the overall system performance of its UCS servers.

Whiptail, a Whippany, NJ company, was founded in 2007. Dan Crain, Whiptail’s CEO, was previously the CTO of Brocade. Whiptail was one of the original small number of all-flash vendors. Initially, Whiptail focused its solutions on delivering file-based solid state storage.

Today, Whiptail’s solutions are focused on a handful of application workloads that can best take advantage of an all-flash storage array. These include:

By focusing on specific workloads, Whiptail has not gained as much attention as some of its competitors; but has quietly been able to complement existing storage systems vendors while gaining footprint, and demonstrating ultra-high performance where required.

Most recently, Neuralytix contributed to Whiptail’s latest focus area – Big Data, in this webinar.

Neuraspectiveâ„¢

Neuralytix believes that this is a tipping point for other leading server vendors to follow. EMC, which acquired XtremIO last May has its own all-flash storage system (although it has yet to become generally available); IBM acquired Texas Memory Systems (TMS) at the end of 2012; and now Cisco with WhipTail is a strong indicator that there is an appetite for all-flash vendors. As a side note, Western Digital recently acquired PCI flash vendor Virident. Neuralytix expects further aggressive consolidation of the flash market over the next two to three years.

WhipTail’s acquisition is likely to have a positive impact to Pure Storage’s intent to go public and Violin Memory‘s recent filing (August 26, 2013) for its IPO. That leaves only Nimbus Data Systems, as a privately held company based in South San Francisco. There are other up and coming companies, including, but not limited to Skyera, Greenbytes ((Disclosure: Ben Woo, Neuralytix’s Managing Director, sits on the Advisory Board for Greenbytes)), and Atlantis. Valuations for these companies are likely to rise as a result of WhipTail’s acquisition.

That said, Neuralytix strongly believes that only those companies that have a strong software solution (for example, Greenbytes’ vIO) will come out winners. Neuralytix does not believe that those all-flash vendors that rely on specialized hardware designs will benefit from the rising tide of acquisitions and IPOs by flash vendors. The key here is for the acquirer to be able to quickly integrate the features and benefits from the acquired companies to enhance its converged infrastructure.

VDI will continue to play a major role in the decisions for larger vendors to acquire emerging companies like WhipTail. Clearly, from the messages sent from VMworld 2013, and from the technology vendors industry wide, the next major opportunity for growth and margin is in developing VDI solutions that are cost effective and simply to deploy.

Make no mistake, Cisco’s acquisition of WhipTail is very strategic to its ability to gain market share in the converged infrastructure market.

 

Source: Cisco Announces Intent to Acquire WHIPTAIL

 

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