SanDisk scoops up Smart Storage Systems for $307M to infiltrate data centers

Flash memory business SanDisk has agreed to acquire enterprise solid-state-drive maker Smart Storage Systems for $307 million in cash and equity-based incentives, the companies announced today.

SanDisk does well in consumer markets, but it wants to do better with enterprise and data center sales. Smart Storage Systems (SSS) already makes SSDs based on the SATA and SAS storage protocols and generated about $25 million in revenue in its latest quarter. So the marriage could be good for SanDisk if it can continue converting customers.

“This acquisition enables SanDisk to address a $1.6 billion market opportunity in enterprise SATA products and complements our strong enterprise SAS product portfolio,” Sumit Sadana, EVP & chief strategy officer of SanDisk, said in a statement. “With this combination, SanDisk will have products qualified with six of the top seven storage OEMs worldwide.”

The two big issues for SanDisk here are that the competition is fierce and margins are thin. Just last week, Western Digital agreed to acquire enterprise SSD hotshot sTec for $340 million. And there are lots of institutional players in the space like EMC and IBM and smart startups like SolidFire and Skyera.

The companies expect the deal to close in August 2013. About 250 Smart Storage Systems employees will join SanDisk as soon as the deal closes.