Amazon buys NVMe startup E8 Storage to boost public cloud

Another NVMe flash startup has been acquired -- this time by a public cloud storage giant.

Amazon confirmed it will acquire E8 Storage and deploy its rack-scale flash storage in the Amazon Web Services (AWS) public cloud.

Amazon said the transaction includes "some assets" that include hiring the E8 Storage team. E8 Storage CEO Zivan Ori reportedly will join Amazon in an unspecified executive capacity.

Israeli news outlet Globes first reported the story, citing unnamed sources who estimated Amazon will pay between $50 million and $60 million to acquire E8 Storage. A separate report by Reuters said the purchase price is much less, citing another source with knowledge of the deal. Amazon did not publicly disclose the acquisition price.

Amazon's move comes two weeks after its public cloud rival Google bought file storage software startup Elastifile and nearly one month after holding company StorCentric acquired NVMe array hopeful Vexata.

The Amazon-E8 Storage marriage signals growing interest in NVMe flash. There is widespread industry belief that the NVMe protocol will eventually replace traditional SCSI-based storage. SCSI traffic makes several network hops along the network. By contrast, NVMe allows applications to talk directly to storage across multilane PCIe devices.

For Amazon, the deal highlights the competition it faces from enterprises seeking an AWS-like alternative that costs less than AWS and is managed on premises. It will be worth watching to see if Amazon integrates E8 Storage gear with AWS Nitro compute instances, which use NVMe as the underlying media with Elastic Block Store.

By acquiring E8 Storage, Amazon gains a storage operating system optimized for NVMe flash, said Eric Burgener, a research vice president of storage at analyst firm IDC.

"E8 has an NVMe-over-TCP implementation integrated in its software. It's not that Amazon couldn't have built that, but E8 already built it and it works. TCP is clearly the future of NVMe-over-fabrics-attached storage. That's where the volume is going to be," Burgener said.

Ori and Alex Friedman founded E8 Storage in 2014. Both previously had worked in management positions at IBM Storage. Friedman was E8's vice president of R&D. E8 Storage emerged from stealth in 2016, with a dense block-based array that combines 24 NVMe SSDs in a 2U standard form factor.

The E8 Storage software targets analytics and similarly data-intensive workloads that require extreme performance and ultralow latency. E8 received more than $18 million in total funding, including a $12 million Series B round in 2016.

In addition to E8 arrays, customers have also been able to buy E8 Storage software on reference architecture with servers by Dell, Hewlett Packard Enterprise and Lenovo. The vendor this year added parallel file storage to target high-performance computing.

E8 Storage was an early entrant in end-to-end NVMe flash. The E8 architecture is based on industry-standard TCP over IP. Other NVMe startups include Apeiron Data, Excelero and Pavilion Data Systems.

Burgener said he wouldn't be surprised to see more consolidation in NVMe storage. After ceding ground early, Burgener said legacy storage vendors have aggressively pushed into NVMe.

"Most of the majors have gotten their marketing acts together around selling NVMe for mixed workload consolidation, but they also want to go after the same kind of dedicated workloads" first targeted by NVMe startups, Burgener said.