SanDisk Corporation (NASDAQ:SNDK) CEO Sanjay Mehrotra recently told CNBC in an interview why his company is buying Fusion-IO, Inc. (NYSE:FIO) and it’s all about flash memory being used in data centers.
According to the SanDisk Corporation (NASDAQ:SNDK) cofounder and president, Fusion-IO, Inc. (NYSE:FIO) “has tremendous solutions offerings to help enterprise accelerate their applications.” Mehrotra said that because of this acquisition, his company will be able to offer these very solutions.
Saying that SanDisk Corporation (NASDAQ:SNDK) has the technology, software expertise and scale, the CEO noted that the Fusion-IO, Inc. (NYSE:FIO) acquisition will give his company the ability to “bring compelling propositions” to their customers. The acquisition will also scale up SanDisk, Mehrotra noted.
Meanwhile, Jon Fortt noted that SanDisk competitors saw their stock rise on Monday because of the announcement of the Fusion-IO acquisition. Fortt said that this seems to be investors betting that SanDisk competitors will be forced to acquire other companies to compete in the enterprise memory solutions industry.
Asked what scale is needed and whether he thinks competitors will acquire to compete in the space, Mehrotra said that what is needed is a broad portfolio of solutions, strong goal-to-market capabilities and vertical integration. He noted that with the Fusion-IO, Inc. (NYSE:FIO) acquisition, SanDisk Corporation (NASDAQ:SNDK) will have the broadest portfolio for enterprise customers.
The CEO also expressed how confident he and his team are that they will be able to work with customers to understand their needs to solve IT infrastructure challenges bring compelling solutions. Mehrotra also said that as enterprise storage demand keeps increasing because of the impact of cloud computing, SanDisk believes they are in the best position to take the lead. According to the CEO, they envision flash memory working to update the modern data center. He added that they see their enterprise storage business being larger than a one-billion business in 2016.
Watch the interview below.
SanDisk Corporation (NASDAQ:SNDK) shareholders includes Rob Citrone’s Discovery Capital Management which reported by the end of March that they had about 7.96 million shares in the company. Michael Lowenstein’s Kensico Capital is also an investor with about 6.699 million shares in the company by the end of the first quarter.
Investors in Fusion-IO, Inc. (NYSE:FIO) includes Steven Cohen’s Sac Capital Advisors with about 1.62 million shares in the company by the end of the first quarter of the year. D E Shaw also owned 761,178 shares in the company by the end of March.