Fusion-io to Acquire IO Turbine for $95 Million

Fusion-io, Inc. has entered into a definitive agreement to acquire IO Turbine, Inc., a provider of caching solutions for virtual environments.

Under terms of the agreement, Fusion-io will pay up to approximately $95 million, subject to purchase price adjustments, for all outstanding securities of IO Turbine. The consideration is payable in cash and stock, provided that the cash portion may not exceed $35 million. The transaction is expected to close by the end of August 2011, subject to final closing conditions.

The acquisition is a key part of Fusion’s strategy to enable enterprise customers to increase the utilization, performance and efficiency of their datacenter resources and extract greater value from their information assets. Having partnered closely for a number of months, Fusion-io and IO Turbine have a shared philosophy for solving datacenter inefficiencies. The integration of IO Turbine’s software into Fusion’s platform will enable traditional storage infrastructures to keep up with the increasing demands of virtualized servers and expands Fusion’s market opportunities to both new and existing customers.

"IO Turbine’s software is uniquely architected to take advantage of flash memory in the server to solve the I/O bottlenecks, the inhibitor to the adoption of enterprise virtualization," said David Flynn, Chairman and Chief Executive Officer of Fusion-io. "We believe integrating ioMemory and IO Turbine adds a critical and previously missing performance component to virtualized IT environments that will accelerate the adoption of Fusion-io technology. This acquisition also underscores our focus on providing customers with an enterprise solution that features software and hardware components designed to accelerate their business’ full suite of applications."

San Jose, California-based IO Turbine was founded to address data supply constraints in virtual environments. While adoption and affordability of flash technologies has provided performance advances in virtualization, effective utilization of flash storage in a shared, virtualized environment has remained complex.

The IO Turbine software takes advantage of flash local to the server, delivering improved performance for virtualized workloads by holding data close to where it is used. This approach avoids the need for expensive performance-oriented networked storage systems and memory appliances that struggle to deliver performance from the far end of a network, instead allowing enterprises to use cost optimized shared storage systems. The marriage of ioMemory and IO Turbine software improves ROI by increasing the number of virtual machines per physical server. Moreover, this makes it feasible to virtualize data intensive applications that were previously difficult to migrate to virtualized environments while maintaining performance. Enterprises will be able to virtualize their entire suite of applications and finally realize the benefit of running a single unified virtualized environment.

"In addition to delivering performance that finally unleashes the potential of virtualization, we believe the combined Fusion-io and IO Turbine solution will also boost efficiency by reducing the costs associated with running expensive backend shared storage, as well as extend the lifespan of enterprises’ current storage area networks," noted Rich Boberg, CEO of IO Turbine. "By integrating the IO Turbine virtualization software with Fusion’s ioMemory platform, we believe enterprises will finally be able to accelerate even the most I/O intensive applications in virtualized environments."

At closing, Fusion-io will add approximately 20 IO Turbine employees to its engineering team, with an additional approximately five employees across other areas.