Flash Memory Summit: August 13-15 Santa Clara Convention Center

August 2, 2013

796316249


See You At Flash Memory Summit

August 2, 2013

796316249


HGST to Acquire sTec: FULL PR TEXT HERE

June 26, 2013

HGST to Deepen SSD Capabilities and Expertise with sTec IP and Engineering Talent 

SAN JOSE and SANTA ANA, Calif., June 24, 2013 – Western Digital® Corporation (NASDAQ: WDC) and sTec, Inc. (NASDAQ: STEC) announced today that they have entered into a definitive merger agreement under which sTec, Inc., an early innovator in enterprise solid-state drives (SSDs), will be acquired by HGST, a wholly-owned subsidiary of Western Digital. sTec will be acquired for approximately $340 million in cash, which equates to $6.85 per share. This represents approximately $207 million in enterprise value, net of sTec’s cash as of March 31, 2013.

The pending acquisition augments HGST’s existing solid-state storage capabilities, accelerating its ability to expand its participation in the rapidly growing area of enterprise SSDs. HGST remains committed to its highly successful joint development program with Intel® Corp. and will continue to deliver current and future SAS-based SSD products with Intel.

sTec has strong engineering talent and intellectual property that will complement HGST technical expertise and capabilities. HGST will continue to support existing sTec® products and collaborate with its customers to understand their future requirements.

“Solid state storage in the enterprise will play an increasingly strategic role in the future of Western Digital,” said Steve Milligan, president and chief executive officer, Western Digital Corporation. “This acquisition is one more building block in our strategy to capitalize on the dramatic changes within the storage industry by investing in SSDs and other high-growth storage products.”

“This acquisition demonstrates HGST’s ongoing commitment to the rapidly growing enterprise SSD segment, where we already have a successful product line,” said Mike Cordano, president, HGST. “We are excited to welcome such a talented team of professionals to HGST, where their inventive spirit will be embraced and encouraged.”

“At this key point in the evolution of the storage industry, sTec is excited to consummate this transaction. It will be an important next step in proliferating many of the innovative products and technologies that sTec has been known for throughout its 23-year history and provides immediate value for our shareholders and a strong future for our employees and customers,” said Mark Moshayedi, president and chief executive officer, sTec. “This merger will enable our world-class engineering team and IP to continue to make a significant contribution to the high-performance enterprise SSD space that has long been sTec’s focus.”

The board of directors of sTec, on the unanimous recommendation of a special committee of independent directors of the board, has unanimously approved the merger agreement and has resolved to recommend that sTec shareholders approve the transaction at a sTec shareholders meeting to be held to approve the merger agreement and the merger. The directors and executive officers of sTec have entered into separate voting agreements under which they have agreed, subject to certain exceptions, to vote their respective shares in favor of the proposed transaction.

Wells Fargo Securities, LLC has acted as the financial advisor to Western Digital and BofA Merrill Lynch has acted as the financial advisor to sTec in connection with this transaction.

Closing of the acquisition, which is subject to customary conditions, is expected to occur in the third or fourth calendar quarter of 2013.


What’s going on at STEC?

February 17, 2012

Some serious discord:  http://ssdblog12.wordpress.com/2012/02/


FIO Institutions and Funds Hold 50% of Float

January 23, 2012

Here’s the table direct from YAHOO:

Top Institutional Holders
Holder Shares % Out
FMR LLC 3,690,000 4.42
TCW GROUP, INC. (THE) 3,681,292 4.41
NEA Management Company, LLC 25,935,930 31.1
GILDER, GAGNON, HOWE & CO. 1,740,931 2.09
Capital Research Global Investors 970,189 1.16
LORD ABBETT & CO 937,364 1.12
Valinor Management, LLC 750,000 0.9
THORNBURG INVESTMENT MANAGEMENT INC. 636,816 0.76
JAT Capital Management, L.P. 589,800 0.71
EAGLE ASSET MANAGEMENT, INC. 559,887 0.67
47.34
Top Mutual Fund Holders
Holder Shares % Out
FIDELITY GROWTH COMPANY FUND 2,586,756 3.1
TCW SMALL CAP GROWTH FUND 744,451 0.89
THORNBURG CORE GROWTH FUND 630,700 0.76
LORD ABBETT DEVELOPING GROWTH FUND 397,549 0.48
Allianz Fds-RCM Technology Fd 316,110 0.38
Eagle Series Tr-Eagle Small Cap Growth Fund 305,360 0.37
FIDELITY OTC PORTFOLIO 298,124 0.36
FIDELITY CANADIAN GROWTH COMPANY FUND 264,590 0.32
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND 207,800 0.25
JP MORGAN SMALL CAP GROWTH FUND 199,330 0.24
7.15

As a comparison, OCZ is at 81% and STEC is at 87%.  The reason is simply there are not enough shares of FIO to go around.  That will change next month when an additional release of shares comes online and institutions can purchase without triggering SEC-required reporting


First it was John Cagle…then Woody Hutsell…now Shane Robison

January 12, 2012

I was just thinking about all the little camp fires that are now burning around Fusion-io.  Whether it’s the obvious competition from Virident or OCZ/Marvell or STEC or the less obvious and longer sales cycles of appliance vendors like Violin Memory or even attempts to update legacy storage with flash from EMC or NetApp.

And then I was looking at TOPSY results for Fusion-io.  If you are not aware of TOPSY go there right now — a very cool tweet search engine.  And I noticed a very long list of career opens at Fusion-io:  see the sample below.

Anyway, about those campfires — they are having the oxygen sucked out of them by some very clever folks at Fusion-io who are hiring just about everyone and anyone in the flash space.

Moral of the Story:  if you want to be relevant in flash — you need to be recruited into Fusion-io (at least for now).

Department Position Title City State
Sales Account Executive – Atlanta Atlanta GA
Sales – APAC Account Executive – Beijing Beijing
Reliability/Tools NVM Technologist Boulder CO
Reliability/Tools HA Applications Engineer Boulder CO
Sales OEM Systems Engineer Raleigh NC
Sales Account Executive – Carolinas Raleigh NC
Sales OEM Systems Engineer Round Rock TX
Sales Renewal Manager Salt Lake City UT
Software Engineering Software Engineer Salt Lake City UT
Software Engineering Test Automation Engineer Salt Lake City UT
Hardware Engineering Senior Software Engineer Salt Lake City UT
Reliability/Tools Solid State Storage Tech Salt Lake City UT
Reliability/Tools Engineering Technician Salt Lake City UT
Finance Accounting Manager Salt Lake City UT
Finance Accounts Receivable Manager Salt Lake City UT
HR Recruiting Business Partner Salt Lake City UT
Software Engineering Student Intern Salt Lake City, UT or Boulder, CO
Software Engineering Engineering Program Manager Salt Lake City, UT or Boulder, CO
Software Engineering Applications Team Manager Salt Lake City, UT or San Jose, CA
Software Engineering Senior Software Engineer Salt Lake City, UT or San Jose, CA
Reliability/Tools Software Engineer Lead Salt Lake City, UT or San Jose, CA
Operations Manufacturing Engineer Salt Lake City, UT or San Jose, CA
Software Engineering Senior Build Engineer Salt Lake City, UT; San Jose, CA; Boulder, CO
Software Engineering Software Engineer Salt Lake City, UT; San Jose, CA; Boulder, CO
Software Engineering Software Engineer Salt Lake City, UT; San Jose, CA; Boulder, CO
Software Engineering Software Engineer Salt Lake City, UT; San Jose, CA; Boulder, CO
Software Engineering Software Engineer Salt Lake City, UT; San Jose, CA; Boulder, CO
Software Engineering Software Engineer Salt Lake City, UT; San Jose, CA; Boulder, CO
Software Engineering Software Engineer Salt Lake City, UT; San Jose, CA; Boulder, CO
Hardware Engineering Software Engineer Salt Lake City, UT; San Jose, CA; Boulder, CO
Reliability/Tools Senior Software Engineer Salt Lake City, UT; San Jose, CA; Boulder, CO
Sales Systems Engineer Manager, West San Jose CA
Sales OEM Systems Engineer San Jose CA
Software Engineering Technical Manager of Platform Team San Jose CA
Software Engineering Senior Software Engineer San Jose CA
Software Engineering SAN Protocols and Windows Engineer San Jose CA
Software Engineering Senior SQA Engineer San Jose CA
Software Engineering Performance Engineer San Jose CA
Software Engineering SQA Engineer San Jose CA
Software Engineering SQA Engineer San Jose CA
Software Engineering Virtualization Engineer San Jose CA
Finance Sales Commissions Manager San Jose CA
Finance Finance Manager San Jose CA
Virtualization Solutions Senior Software Engineer San Jose CA
Virtualization Solutions Kernel Engineer San Jose CA
Virtualization Solutions QA Lead San Jose CA
Virtualization Solutions Systems Software Engineer San Jose CA
Virtualization Solutions Kernel Engineer San Jose CA
Virtualization Solutions Senior Software Engineer San Jose CA
Sales – APAC Sales Engineer – Shanghai Shanghai
Sales – APAC Account Executive – South China South China
Sales Account Executive – FED Civilian Washington DC DC

Looks For Large Gains From Solid State Drives Storage Wars

January 5, 2012

(Seeking Alpha Repost)

As cloud computing (data centers), smartphones, and tablets continue stratospheric growth rates, the market needs faster, more reliable, and less power-hungry storage options. The digital junk has to be stored somewhere, and these new devices don’t have the storage capabilities of traditional desktop computers loaded with large hard disk drives.

Enter the SSDs, or Solid State Drives (read The SSD Revolution for a good overview of the sector) which provides a better alternative than traditional hard drives, though at a higher cost.

Between analysts raising estimates for Fusion-IO (FIO) and OCZ Technology (OCZ) upping estimates for Q4, the sector has startling growth potential for 2012. Numbers that caught me by surprise.

Fusion-IO is seen as the industry leader and innovator. Not only is the company a recent IPO darling, but Steve Wozniak, co-founder of Apple (AAPL), is the chief scientist, giving the company the instant street credibility that helps with customers and stock valuations.

The company sells plug-in boards that accelerate access to corporate server computers such as those needed in cloud computing operations.

Analysts from Credit Suisse and Morgan Stanley recently upped the estimates for Fusion-IO, even suggesting that new revenue from current and pipeline accounts could double the CY12 revenue estimate of $372M:

Fusion-io is well-positioned to ride the surge in enterprise flash given its leading market share, recent low-cost product introduction (ioDrive2), and growing partnerships / distribution, in our view. Our $30 price target applies an 8x EV/Sales multiple, upper-end of comparable data center peers, to our CY12 revenue estimate of $372M. We believe our estimates are conservative, especially if FIO converts new accounts in its pipeline that have the potential to be multimillion customers. We believe conversion of new revenue in current and pipeline accounts could at least double our CY12 revenue estimate.

Fusion-IO has impressive gross margins in the 50%+ level. The company though trades at lofty multiples. The forward PE clocks in around 70 and the Price/Sales multiple is over 9. The stock is definitely expensive, but if growth accelerates as the analysts think might be possible the stock will end up being cheap. One major caution is that prime customer Facebook could at any point leave it without a major revenue stream.

OCZ Technology is the opposite of Fusion-IO. The company has been around for 10 years and just recently made a move into SSDs. Hence the company remains relatively unknown, even though the revenue growth has been nothing short of spectacular.

Back in December, OCZ guided to higher revenue numbers that amount to 30% sequential increase from Q2 2012 — amounts that exceed those of Fusion-IO by a wide margin. The total fiscal 2012 revenue will now exceed the previously announced top end of $350M. That’s impressive growth for a company that just entered the space a little over a year ago.

The company only trades at roughly 1x those fiscal year 2012 estimates, a far cry from the valuations of Fusion-IO. The one catch with OCZ Tech is that gross margins remain low at just above 21%. Is OCZ undercutting competition by selling their products at low margins? Typically the technology companies that thrive are the ones selling products for premium prices. Once your product becomes a commodity, the stock never makes the high returns desired by investors.

OCZ trades at a very reasonable 12x forward earnings. Any upside to those numbers could result in serious gains for the stock. Investors should focus on whether gross margins move towards the 30%+ range.

Preliminary Highlights

  • OCZ expects revenue for Q3’12 between $100 and $105 million, an increase of approximately 90% compared with the revenue of $53.2 million reported in Q3’11, and an increase of approximately 30% compared with the $78.5 million reported in Q2’12.
  • OCZ now expects revenue for its fiscal year 2012, ending February 29, 2012, to be in excess of the top end of its previously announced range of $320 to $350 million; this does not take into consideration any potential increase in demand for the company’s products arising from the widely reported hard disk drive shortage.
  • “We expect to report record revenue in Q3’12, driven primarily by increased traction for our enterprise and server SSD offerings along with initial shipments of our new PCIe-based offerings,” said Ryan Petersen, CEO of OCZ Technology. “Based on the exit bookings rates from November, interest in these products is exceeding our expectations, due to accelerated adoption of our SSDs by server OEMs and enterprise customers,” he added.

Though listed by some as a market leader in the enterprise flash storage sector, STEC (STEC) appears to be the laggard these days. Not only did the stock plunge back in July when it was revealed that the SEC may recommend a civil injunction against the company, but earnings estimates for Q4’11 and 2012 were lowered dramatically. The 1-2 punch led to a 50% drop in the stock and no ensuing recovery has taken place though the sector is gaining steam. STEC remains a show me stock that should be avoided for now.

The analyst predictions on Fusion-IO and the continued guidance raises by OCZ Technology suggest that investors should take a further look at this sector. The combination of being a cloud computing storage option and fast growth could provide the catalyst for large stock gains.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in OCZ over the next 72 hours.

Additional disclosure: Please consult your financial advisor before making any investment decisions.