LSI, known for their high quality RAID cards here at PC Perspective have just agreed to purchase our favourite designer of  SSD controllers, namely Sandforce.  The deal is for $322 million in cash, with another $48 million of unvested stock options and restricted shares also being picked up.  This deal makes an interesting pair of bedfellows, with Sandforce being well known by consumers but making few inroads into the server room or other corporate markets.  LSI is the opposite, with very few consumers running out and picking up a $700 SAS RAID controller while in the corporate environment they are a common purchase. 

The two markets are very different; consumers want both speed and affordability in a drive and are quite willing to sacrifice a little reliability to that end.  Corporate usage places reliability first, there is no point having incredibly fast storage medium if it is occasionally unreachable and so are willing to pay a high price for that reliability.  This purchase seems to be indicating that SandForce feels that there is a market for their controller in the corporate world, if they can overcome the reliability and MTBF of their SSD drives.  LSI can provide experience with that in spades, their testing methodology is capable of detecting and pinpointing flaws that a consumer would never notice but which a heavily loaded server might.  This might just see SandForce arrive as a controller in a server room near you.  Keep your eyes peeled for more information from Allyn.

MILPITAS, Calif., October 26, 2011 – LSI Corporation (NYSE: LSI) today announced that it has signed a definitive agreement to acquire SandForce, Inc., the leading provider of flash storage processors for enterprise and client flash solutions and solid state drives (SSDs). Under the agreement, LSI will pay approximately $322 million in cash, net of cash assumed, and assume approximately $48 million of unvested stock options and restricted shares held by SandForce employees.
 
SandForce’s award-winning products include flash storage processors at the heart of PCIe flash adapters and SSDs. Flash storage processors provide the intelligence required to deliver the performance and low-latency benefits of flash storage in enterprise and client applications. With market-proven, differentiated DuraClass™ technology, SandForce flash storage processors improve the reliability, endurance and power efficiency of flash-based storage solutions.
 
The acquisition greatly enhances LSI’s competitive position in the fast-growing server and storage PCIe flash adapter market, where the WarpDrive™ family of products from LSI already uses SandForce flash storage processors. The complementary combination of LSI’s custom capability and SandForce’s standard product offering propels LSI into an industry-leading position in the rapidly growing, high-volume flash storage processor market space for ultrabook, notebook and enterprise SSD and flash solutions.
 
“Flash-based solutions are critical for accelerating application performance in servers, storage and client devices,” said Abhi Talwalkar, LSI president and chief executive officer. “Adding SandForce’s technology to LSI’s broad storage portfolio is consistent with our mission to accelerate storage and networking. The acquisition represents a significant, rapidly growing market opportunity for LSI over the next several years.”
 
Michael Raam, SandForce president and CEO, said, “The combination of SandForce and LSI allows us to deliver differentiated solutions in the PCIe flash adapter segment by tightly integrating flash memory and management. In addition, leveraging our flash storage processors with LSI’s comprehensive IP portfolio and leading-edge silicon design platforms will lead to innovative solutions.”
 
The transaction is expected to close early in the first quarter of 2012 subject to customary closing conditions and regulatory approvals. Upon closing, the SandForce team will become part of LSI’s newly formed Flash Components Division, with Raam as general manager.