DataDirect Networks CEO: Acquiring Tintri Would Accelerate Move Into Enterprise, Expand Existing Technology

DataDirect Network's planned acquisition of Tintri is aimed at speeding up its move into the enterprise market while expanding its existing technology, which traditionally has been more oriented toward performance-focused workloads.

DataDirect Networks, or DDN, Tuesday said it signed a non-binding letter of intent to acquire the assets of all-flash storage vendor Tintri for an undisclosed sum.

Tintri, once a high-flying storage vendor which only last year had its IPO, has in the past year suffered from falling revenue and mounting losses, and on Tuesday filed for Chapter 11 bankruptcy.

[Related: DataDirect Networks Throws Lifeline To Tintri With Buyout Offer]

The Mountain View, Calif.-based vendor is known for its enterprise-class, VMware-aware all-flash storage and the ability to manage data at the virtual machine level rather than the traditional LUN level.

Alex Bouzari, CEO and founder of Chatsworth, Calif.-based DDN, told CRN that his company has in the past four to five years expanded its focus from large-scale data patterns such as big data and artificial intelligence to more enterprise opportunities.

"Customers tell us they would like to see us better support virtualized environments, containers, snapshots and dedupe," Bouzari said. "We started looking at what we would need to get these things. Partner with other vendors? Licensing deals? Acquisitions?"

DDN had been following Tintri because of its state-of-the-art virtualization capabilities and looked at the possibility of acquiring the company even as its financial problems mounted, Bouzari said.

"We put in our letter of intent," he said. "Unfortunately, Tintri had to file for bankruptcy. But it has great products that are stable and reliable. Customers vouch for the products. … When we looked at the money burn, sadly we saw a mismatch between money coming in and money going out. It's not an ideal situation. We're hoping the company can navigate through these troubling times."

DDN, with its acquisition bid, wants to give the Tintri line stability and continuity in the road map for customers, Bouzari said.

"We're interested in the technology, the intellectual property, the product portfolio," he said. "That's what got us interested n the first place. If we are able to get this done, and get Tintri on board, the first step will be to rebuild the engineering team, the support team, and the intellectual property. Tintri spent a decade evolving its product portfolio. We want to continue that development."

The fate of Tintri as a public company is by no means unique, Bouzari said. "Silicon Valley has a way of pushing organizations to scale," he said. "Sometimes it works great. Sometimes it doesn't."

DDN, on the other hand, has remained private. It is profitable, growing and debt-free, Bouzari said.

"Being private gives us the foundation to focus on our customers and develop better tools to help customers," he said. "If this acquisition happens, it will give us better tools to help our portfolio. But the distraction of an IPO would impact business, and is not something we would look forward to. We saw what happened to Tintri."

Assuming the acquisition closes, Tintri would become a wholly owned subsidiary of DDN with its own development and sales teams including many of the people who have been let go by the company, Bouzari said.

"But the DDN road map and the Tintri road map are synergistic in many ways," he said. "There are ways for them to work together."

Bouzari said DDN does not know if other companies might launch their own bids for Tintri. "Once they get into bankruptcy court, these things take on a life of their own," he said. "We believe our offer brings value to creditors and customers of Tintri. … We don't know who else would come up with an offer."

Aaron Cardenas, founder and CEO of P1 Technologies, a Hermosa Beach, Calif.-based solution provider that has sold about 100 Tintri arrays to large enterprises and to media and entertainment companies across Southern California, said he is glad to see a company like DDN step up to the plate to save Tintri.

"The question is, will DDN or any buyer honor existing Tintri support contracts?" Cardenas said. "They might not even know. But we and our customers are interested in knowing. Customers are unanimous in wanting Tintri's technology to continue."

P1 Technologies has worked with DDN in the past, and sees that DDN's products are popular in the media and entertainment and the high-performance computing markets, Cardenas said.

"Traditionally, DDN provides big, fast SAN storage, but we are more of a NAS shop," he said. "DDN also has an object storage product called WOS, which seems awesome. However, object storage vendors in general are finding this part of the market soft."

What is most interesting about a potential acquisition of Tintri by DDN is that the two companies could not be any more different, Cardenas said.

"DDN has been around a long time, and is financially stable, but sometimes can't find its place in a specific market," he said. "Tintri has been crushing it in the market, but not financially. DDN has a stable market. Hopefully, DDN will stabilize Tintri's business into the future."

If the acquisition of Tintri closes, it would be DDN's second acquisition in a month.

DDN in late June acquired the Lustre file system business and related assets from Intel for an undisclosed sum as a way to improve the scalability of its storage offerings and its ability to service customers in high- performance computing, analytics, artificial intelligence and hybrid cloud.