Fungible's Been Bought by Microsoft


By: Mary Jander

Fungible Inc., a Futuriom 40 company specializing in data processing units (DPUs), has been acquired by Microsoft (Nasdaq: MSFT). The news was released today in a blog post from Girish Bablani, Microsoft corporate vice president, Azure Core. Terms and timing were not disclosed.

DPUs, sometimes called smart network interface cards (smart NICs), offload CPU processes to speed network and/or storage performance. Their use has increased as data volumes and hyperscaler networks have expanded.

It’s been just over a year since Fungible claimed to set a new world’s record for datacenter storage processing with a component that disaggregates, virtualizes, and then pools solid-state-drive (SSD) flash storage in hyperscale datacenters. At that time, trials at the University of San Diego Supercomputer Center (SDSC) revealed Fungible DPUs hitting 10 million input/output operations per second (IOPS). That was more than 50% of the former record of 6.55 million IOPS reportedly achieved with Mellanox smart NICs from NVIDIA (Nasdaq: NVDA).

Early Hyperscaler Adoption

Fungible, founded in 2015, made other claims to fame, such as stating that its programmable DPUs were not just faster but consumed less power than competing components. Execs also touted early customer wins among hyperscaler cloud providers, telcos, and research institutes that require enormously fast processing at top scale.

Microsoft must have been one of those adopters. Bablani’s blog today notes that Fungible’s DPUs offer “high-efficiency, low-power” solutions that “enable high-performance, scalable, disaggregated, scaled-out datacenter infrastructure with reliability and security.”

The Fungible acquisition follows just a month after Microsoft announced the purchase of Lumenisity, a startup founded in 2017 at the University of Southampton in the U.K. that specializes in hollow core fiber (HCF) solutions. HCF uses a core of air instead of glass to transmit optical signals, a tack that proponents say improves speed and enhances security. At the time, Bablani’s blog stated that Lumenisity “will expand Microsoft’s ability to further optimize its global cloud infrastructure and serve Microsoft’s Cloud Platform and Services customers with strict latency and security requirements.”

Components for Clouds

Microsoft’s acquisition of two component-level technologies signals a focus on improving the underlying compute, storage, and networking functionality in Azure. This mirrors efforts by each of the cloud hyperscalers to leverage chips and custom components from Intel Corp. (Nasdaq: INTC), NVIDIA, and other firms in their cloud infrastructure.

Amazon Web Services (AWS), for instance, has its own silicon and custom Intel processors for streamlining basic cloud service functions. Google Cloud, along with its competitors, also has teamed with Arm Ltd. to use that firm’s Ampere Altra chips to augment its infrastructure.

Indeed, all of the major chip suppliers, including NVIDIA, tout relationships with the big cloud players. The advantage of owning the underlying technology, however, ensures supply, reduces wait times, and enables more competitive technology -- at least in theory.

Fungible Team to Join Microsoft

According to Microsoft, Fungible’s leadership team will “join Microsoft’s datacenter infrastructure engineering teams and will focus on delivering multiple DPU solutions, network innovation and hardware systems advancements.”

Fungible's team includes Pradeep Sindhu, a former CEO and co-founder of Juniper Networks (NYSE: JNPR), and Bertrand Serlet, a veteran of Xerox Parc and NeXT, and a former SVP of software engineering at Apple Inc. (Nasdaq: AAPL).

Fungible is based in Santa Clara, Calif., and has 247 employees on LinkedIn. Over the course of the past seven years, it scored about $300 million in three rounds of funding from investors including SoftBank Vision Fund, Battery Ventures, Mayfield Fund, Walden Riverwood Ventures, and Redline Capital.