Wednesday, July 10th 2013

Western Digital Acquires VeloBit

Western Digital Corporation has acquired privately held VeloBit, a provider of high-performance storage I/O optimization software. VeloBit will be fully integrated into HGST, a wholly owned subsidiary of Western Digital. Headquartered in Lincoln, MA, VeloBit enhances storage system performance with its software technology by adding a transparent acceleration layer utilizing solid state drives (SSDs). Financial terms of the transaction were not disclosed.
The acquisition builds on HGST's strategy to enhance the overall value of datacenter storage by integrating HGST SSDs with software. VeloBit's SSD caching software dramatically accelerates applications and increases server density by enabling higher I/O performance, lower latency, and more efficient usage of processor and storage resources.

Both the VeloBit acquisition and the proposed sTec acquisition by Western Digital reflect acceleration by its HGST subsidiary in the fast growing and strategic enterprise SSD space, augmenting its technology position and IP portfolio with additional engineering and design resources. "In VeloBit we saw a great team that has developed and commercialized breakthrough I/O optimization software," said Mike Cordano, president, HGST. "The acquisition of VeloBit is an important step in our strategy to develop robust software capabilities to augment our successful SSD product portfolio."

"We are convinced that the best way to meet our customers' needs is to tightly integrate storage optimization software with the hardware," said Duncan McCallum, co-founder and CEO of VeloBit. "In HGST we have found the ideal partner to continue to develop our ground-breaking caching, compression, and cache coherence technology. This acquisition will enable us to continue to expand the range of products and services we offer to our customers."

VeloBit has won multiple competitive product benchmarks in the areas of I/O acceleration and server density optimization. VeloBit HyperCache was chosen by Storage Magazine as a 2012 Storage Product of the Year.

VeloBit was founded in September 2010 by an experienced team of storage industry experts and entrepreneurs to commercialize inventions in caching and data compression. The company was funded by Fairhaven Capital and Longworth Venture Partners.

Wells Fargo Securities, LLC has acted as the financial advisor to VeloBit in connection with this transaction.
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