Lenovo to acquire Infinidat in huge AI storage play

Infinidat, valued at more than $1 billion in 2017, was founded by former EMC star Moshe Yanai

Technology powerhouse Lenovo Thursday said it had signed a definitive agreement to buy Israel-based Infinidat, a privately held developer of high-performance storage technology that was founded in 2011 and has been growing market share among enterprise customers.

Infinidat – founded by former EMC employee Moshe Yanai, who worked to develop EMC’s flagship Symmetrix storage system in the 1990s – is focused on developing storage technology for high-performance workloads, particularly for AI.

Financial terms of the deal, which is still subject to regulatory approvals, were not disclosed. The company has raised $370 million in total funding since its founding from multiple investors including Goldman Sachs' growth equity unit, TPG and Israel-based ION Asset Management. At one point, in 2017, the company had a valuation of $1.6 billion.

The company late last year developed a new retrieval-augmented generation, or RAG, workflow deployment architecture aimed at helping users of the company’s InfiniBox and InfiniBox SSA enterprise storage systems use them to optimise data for output to AI models.

According to LinkedIn, Inifinidat, has around 500 employees. The firm, with US headquarters in Waltham, Massachussetts, and corporate headquarters in Herzliya, Israel, was honoured with a 2024 Tech Innovator Award for OnfuzeOS cloud Edition.

Greg Huff, chief technology officer in Lenovo’s Infrastructure Solutions Group, said in a statement that the acquisition of Infinidat helps Lenovo accelerate innovation and deliver greater value for customers.

“Infinidat’s expertise in high-performance, high-end data storage solutions broadens the scope of our products, and together, we will drive new opportunities for growth,” Huff said.

While Lenovo consistently ranks third in infrastructure market share according to IDC, the demand for its products is growing. In its most recent quarter, the company saw high double-digit revenue growth for storage thanks to aggressive cloud investment, it stated during its November earnings.

In that same frame, Lenovo’s combined revenue from storage, software and services grew 35% year-on-year to a record high. Revenue from Lenovo Neptune liquid-cooled servers – which remove nearly 100% of the heat produced by modern, GPU heavy, rack scale chip deployments - grew 48% year-on-year.

Infinidat’s storage business has been also steadily expanding among enterprise users in the Global Fortune 500, said Infinidat CEO Phil Bullinger in a statement.

“Infinidat delivers award-winning high-end enterprise storage solutions providing an exceptional customer experience and guaranteed SLAs with unmatched performance, availability, cyber resilience and recovery, and petabyte-scale economics. With Lenovo’s extensive global capabilities, we look forward to expanding the comprehensive value we provide to enterprise and service provider customers across on-premises and hybrid multi-cloud environments.”

Both Lenovo and Infinidat rely on channel partners to deliver revenue with approximately 80% of Lenovo’s commercial sales closed by channel partners. Meanwhile, Infinidat CMO Eric Herzog wrote last month that the company cannot meet its goals in 2025 without channel partners.

“To harness this success in 2024 and then drive success in 2025, we will continue to do three key things,” he wrote in a blog post. “Be unwaveringly customer-centric, delivering the best white glove-quality customer experience in the industry; Work hand-in-hand with the channel, empowering partners to increase their business; Excel to spread the word about Infinidat through teamwork, unleashing the power of Infinidat employees to achieve new milestones that propel our company forward.”

Lenovo built a strong server market with its 2014 acquisition of IBM’s entry-level server business. However, the company initially depended on OEM deals such as one with EMC as well as with a couple of hyperconverged infrastructure vendors, all of which were acquired by Lenovo’s competitors.

Lenovo eventually built a good storage business using a combination of its own server and with software it both developed on its own and from third-party developers.

This article first appeared on Computing’s sister site CRN