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Technology Stocks : SanDisk Corporation

SNDK 175.53

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Oct 28 9:30 AM EDT

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From: Sam	7/8/2011 11:11:54 AM
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Note from StorageSearch.com on Sandisk/Pliant merger. The author, Zsolt Kerekes, has been following SSDs for a long time now, has a pretty extensive web site devoted to commenting on SSDs (since 1998), and produces each quarter a list ranking SSD vendors and related firms by searches on his web site. Here is his comment on Pliant/Sandisk in this quarter's ranking. The original is here: storagesearch.com By more than coincidence Pliant and SanDisk both moved up 4 places and remained closely coupled in their rankings in this edition of the top SSD companies list - as well as closely coupling in the real world - where they were joined in a $327 million acquisition which was announced in May. Here's some of what I said when the deal was first announced. "This acquisition theoretically fixes complimentary strategic weaknesses for both companies:- no customers (Pliant) and no enterprise IP (SanDisk)." The way I viewed this was that Pliant's main value to a memory maker was they had designed a fast SSD controller - which they had proved worked - because they had a few oem customers. The only problem was - this wasn't Pliant's original business plan. They thought they would be an SSD company and take a slice of STEC's SSD pie. But SandForce killed those prospects in the 2.5" market - because many oems thought they could serve themselves better to STEC pie using a SandForce steel shovel rather than a silver plated spoon from Pliant. (They preferred adding their own profit margins to the flash memory thanks very much.) And you know what I said about STEC's marketing communications (above) not being in the same class (school really) as Fusion-io etc. Compared to Pliant - STEC's marketing was pretty good. That's the past - what about the future? If SanDisk doesn't mess this up... big pause there - because they've got no track record worth a figleaf in the enterprise market - and you can read what I said about their past enterprise aspirations in earlier editions of this series - anyway to continue. If SanDisk doesn't mess this up... it can attack the high end 2.5" SSD market and leverage Pliant's controller to be the #50th or so entrant in the PCIe SSD market too. What SanDisk currently lacks in enterprise marketing brains may not matter much initially - because as a consumer company - they're culturally more used to the idea of investing money in ads and marketing messages. Since nobody understands the SSD market anyway (You Dear Reader are the exception) - this could be a time of opportunity when talking loudly and sending out lots of messages about a new SSD gets the job done just as well as talking quietly and sensibly behind the intranet and at events that nobody goes to. We'll see. PS - it's reasonable to ask - what would the rank of the combined SanDisk/ Pliant SSD company had been in this quarter? That works because the businesses had no market overlap. If I filter out the effect of the acquisition announcement on Pliant - then the combined SSD business would have been #5 in this list.

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