EMC has reportedly acquired pure flash storage company XtremIO for $430 million.

The Globes, an Israeli business news site, reported the news today. EMC nor XtremIO have made an announcement about the acquisition.

Reports surfaced last month that EMC had its sights on XTremIO. With the acquisition, EMC is validating the fast growing pure flash storage market. The news will undoubtedly raise the fortunes of Solid Fire, Kaminario, Violin Memory, Pure Storage and a host of others.

XtremIO is an Israeli company. Founded in 2009, the company has raised $25 million in venture capital. The company is so young that it had not even launched its technology except in trials with customers and partners.

XTremIO  represents the new wave of storage innovation. Today’s bottlenecks are hard disk drives that  just can’t keep up. Storage is the key pain point for application developers and limits the acceleration and agility of IT. All-flash arrays will dominate in the long-term for active data. Spinning disk will move deeper into the IT infrastructure where it is infrequently accessed and doesn’t require high performance.

MC’s approach, up until it announced VF Cache, was to place flash as a device into a disk array system. The bottleneck here was still the disk controller, which was designed to support spinning disk. EMC’s VF Cache is an attempt to extend the flash hierarchy and bring storage closer to the processor…and manage that hierarchy where flash is the highest performance tier.

NetApp provides another example. It has a different strategy using a flash-cache type of approach and has shunned tiering. Nonetheless, both companies have a vested interest in designing or acquiring companies that have developed all flash technology with the associated management capabilities.

The acquistion fits in EMC’s comfort zone.  EMC has to date acquired six Israeli companies. It has an R&D center in Israel.  There are some exceptions but generally Israel is an incubator, not a threat to develop the next EMC or NetApp. As a result they often make better acquisition candidates because they don’t have a strong channel and don’t covet doing an IPO such as Fusion-io or Violin. Companies like EMC and NetApp, that have big sales channels can hence pick up small Isreali startups for less money.