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In December, reports reported that Microsoft had acquired Fungible, a startup that makes data center hardware like a data processing unit (DPU), for around $190 million. Today, Microsoft confirmed the acquisition, but not the purchase price, saying it plans to leverage “Fungible’s tech and team” to deliver “multiple DPU solutions, network innovation and hardware system advancements.”
“Fungible technologies help enable high-performance, scalable, distributed, scaled data center infrastructure with reliability and security,” said Girish Bablani, CVP, Microsoft Azure Core Division. “Today’s announcement marks Microsoft’s commitment to long-term, diversified investments in data center infrastructure, including our broad range of technologies and offerings to offload, improve latency, increase data center server density, increase energy efficiency and reduce costs.”
A DPU is a dedicated piece of hardware designed to handle certain data processing functions, including security and network routing of data traffic. The approach is intended to help reduce the load on CPU and GPUs for core computing tasks associated with a given workload.
Fungible was started in 2016 by Bertrand Serlet, a former Apple software engineer who sold the cloud storage startup to Western Digital in 2017, along with Krishna Yarlagada and Jupiter Networks founder Pradeep Sindhu. Fungus DPUs sold in two operating systems, one open source and the other proprietary, use a microprocessor architecture called MIPS to control flash storage sizes.
Fungible raised more than $300 million in venture capital before being acquired by Microsoft from investors including SoftBank’s Vision Fund and Norwest Venture Partners. But the DPU architecture was said to be difficult to build, which could have affected its development. In August, after it was rumored to be up for sale to Meta, the company said it was laying off staff and reducing its product portfolio.
Increased competition in the market for DPUs will put pressure on Fungible. Nivea acquired GPU maker Bluefield in 2019, while AMD snapped up Pensando late last year. Other competitors include GigaIO, Liqid, Lightbits, VMware’s Project Monterey and Amazon Web Services’ Nitro cards, which offer DPU-like functionality.
In Fungible, Microsoft gets a DPU technology that it can use to bolster Azure — perhaps by selling it as a subscription product or tiered service for block storage. It’s the second data center acquisition in recent months for the tech giant, following its acquisition of high-speed fiber startup Lumenisity in December.
“Fungible DPU was invented in 2016 to solve the most pressing problem in scalable data centers: the inefficiency of data-centric computing in server nodes,” Fungible wrote in a statement on its website. “We are proud to be part of a company that shares Fungible’s vision and uses Fungible DPU and software to improve storage and networking offerings.”
Fungible’s team will join Microsoft’s data center infrastructure engineering teams, Bablani said.
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