Microsoft Enhances Azure Networking and Storage with the Acquisition of Composable Infrastructure

Microsoft has acquired Fungible, a provider of digital processing units DPUs, also known as SmartNICs, and composable infrastructure.

FREMONT, CA:Microsoft (NASDAQ: MSFT) has announced the acquisition of Fungible, a provider of digital processing units DPUs, also known as SmartNICs and composable infrastructure.

The corporate veep for Azure Core, and appears to be intended to give Microsoft's Azure cloud a technology and talent upgrade. According to Microsoft, the Fungible team will join its data center infrastructure engineering teams and focus on delivering multiple DPU solutions, network innovation, and hardware system advancements.

DPUs are already used by Microsoft in Azure. And there is a tonne of competition for Fungible in the market, including Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), AMD (NASDAQ: AMD), and Intel (NASDAQ: INTC).

Even though Fungible's products are well-regarded, a tiny business would have a difficult time competing with the aforementioned five. Additionally, while Fungible's storage hardware has been added to VMware's list of hardware compatibility, its DPUs have not. They call attention to this omission because vSphere 8 is the only widely used enterprise program that presently uses accelerators. Therefore, an acquisition appears to be a good way for Fungible to exit the market, and Microsoft represents a warm and probable long-term home for its technology.

Rival DPU manufacturers might be less pleased with the agreement because Microsoft is one very, very, large customer that Intel, AMD, Nvidia, and Broadcom won't be gaining. After all, it decided to create its technology rather than purchase off-the-shelf equipment.

The four DPU manufacturers are already having difficulty selling to AWS, which has developed its own Nitro DPUs. It appears that Alibaba Cloud has also developed its own SmartNIC. It's possible that Microsoft's purchase of Fungible signals a desire to design its DPUs that are tailored to its requirements.

When Fungible technology will enter Microsoft's data centres is unknown. Microsoft never makes public its exact plans for the technology developed by Fungible. But The Register believes Fungible may very well be behind those services if Azure starts to advertise new networking or storage features, or better efficiency in either area, in a year or three.