Flash storage solutions provider SanDisk’s (SNDK) SAS enterprise solid state drives (SSD) are being used by Dell’s servers — PowerEdge R720 and PowerEdge T620. Moreover, SanDisk’s SSDs received VMware’s (VMW) support for its new software-based storage solution — VMware Virtual SAN — which enables shared storage for virtual machines.
SanDisk’s SAS SSDs improve performance and minimize storage latency while performing read and write operations, which in turn help in faster response to real-time applications. Additionally, when combined with VMware Virtual SAN, the SAS SSDs not only reduce latency but also ensure data security and prevent data-loss in a cost effective manner.
SanDisk’s association with Dell in the enterprise segment is a positive for the storage provider as Dell is ranked third in Gartner’s latest server market report. Per the report, Dell is placed behind Hewlett-Packed (HPQ) and International Business Machines (IBM) with 16.4% market share in the third quarter of 2013.
SanDisk has been strengthening its enterprise SSD portfolio through product innovations and acquisitions. The company’s traction in the SSD segment has yielded results as it reported strong revenue growth aided by a prudent mix of high-margin embedded and SSD solutions and products.
Moreover, SanDisk’s management remains positive about SSD revenue growth, favorable product mix and better supply/demand metrics in fiscal 2013 which, in turn, is expected to improve the pricing environment. SanDisk also expects an increase in demand for its latest 19-nm technology.
Apart from this, SanDisk’s focus on iNAND technology will drive its mobile-embedded products. The company also expects its total SSD contribution to be roughly 25.0% of total revenue moving into 2014.
Though lackluster PC sales, European issues, competition from Micron Technology and currency fluctuations could hurt fundamentals to some extent, we remain positive on management’s commentary regarding a turnaround in the coming quarters and strong secular demand for NAND flash.
Currently, SanDisk holds a Zacks Rank #1 (Strong Buy).
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