Cisco Whiptail Buy Looks Positive As Hard Servers Die Out

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Hard drives are a dying breed. The unstable, fragile and power consuming beasts that have formed the base of most of our computers and all of our networks for a couple of decades are being replaced. Cisco Systems Inc. (NASDAQ:CSCO) is one of the companies at the forefront of destroying the last bastion of the hard drive, servers.

Cisco Whiptail Buy Looks Positive As Hard Servers Die Out

Cisco Systems Inc. (NASDAQ:CSCO) bought Whiptail, a flash storage maker, today.  Whiptail’s acquisition by Cisco Systems Inc. (NASDAQ:CSCO) cost $415 million, and the company is planning on integrating Whiptail into its servers. Cisco isn’t the only company out there getting into the flash storage business, but it could be one of the most successful.

It’s not going to happen overnight, but eventually server hard drives will be replaced by solid state storage drives, the sort found in smartphones and tablets.  Hard drives in laptops are already being thrown out in favor of solid state. In a new report on Cisco Systems Inc. (NASDAQ:CSCO), UBS takes a look at the company’s strength in the future of servers.

Cisco servers grow

Cisco Systems Inc. (NASDAQ:CSCO) held just 1% of the x86 server market back in 2010, but the company had more than 6% of that market in its most recent financial quarter. It’s shown an ability to create a product that clients want, and it’s starting from a small base. A recent acquisition primes the company for growth in the area, according to the report.

The company has an all flash memory array that operates at incredible speeds. Flash is a tiny part of the enterprise market right now, but the massive advantages it has over hard drive storage make it a much better option.

The problem with flash storage is cost, but those costs are getting smaller as technological improvements are made, and the new industry finds its feet. As it gets cheaper, flash servers are going to become a required part of the enterprise deal. Cisco is primed to take advantage of the change.

Flash competition

Cisco Systems Inc. (NASDAQ:CSCO) isn’t the only firm muscling in on flash storage. Western Digital announced plans to buy Virident, another flash drive maker. Cisco’s advantage may be in its ability to offer an all-in -one solution for Flash servers, but there is risk in the industry.

The major result of today’s news is the demonstration of weakness at companies like EMC Corporation, and the likelihood of more problems going forward.

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