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This week, I got revisit the IT world through the efforts of my students. In a class on innovation strategy that I recently completed at UCI, four MBA student teams presented final projects on the current business dilemmas of tech companies.

The most intriguing was that of Fusion-io (NYSE:FIO), a company that provides faster solid state disc (SSD) systems for server farms - 40x faster than a conventional SSD. The company was founded in 2005 and IPO'd in June 2011.

The story sounds pretty daunting. Although it has plenty of cash, the company has lost money the last two years (on revenues of $432 million and $359 million, respectively). It historically has depended on Apple (NASDAQ:AAPL) and Facebook (NASDAQ:FB) server farms for the majority of its revenue, and has been unable to land another comparable sized customer. It's also competing with a number of much bigger and more diversified rivals in a segment (like any IT) that is commoditizing.

At a $11.88 close Wednesday, the stock is up 40% from a historic low of $8.32 in January. Still, the company has lost nearly 40% of its market cap since the IPO. Stock coverage is thin and mixed. Pac Crest rates the stock as a outperform with a $14 target. The Street rates it "as a Sell with a ratings score of D".

Appointed last August, CEO Shane Robison (former Compaq and HP (NYSE:HPQ) CTO) has brought in Yelp (NYSE:YELP) and some other moderately large clients. He's resisted calls to sell the company: it's not clear whether he likes being CEO or really thinks he can turn things around.

The students think that a sale is inevitable, and I find their logic persuasive. They suggest three potential buyers: Seagate (NASDAQ:STX), EMC (NYSE:EMC) and NetApp (NASDAQ:NTAP). They say EMC is best positioned to buy the company, but I think Seagate has the more urgent need to diversify as its core HDD business continues to decline. With 27% of the shares held by large institutional investors, I think the pressure to sell will eventually become irresistible (unless they decide to use the recent runup to bail out).

Either way, it points to a problem that I've remarked almost since the first days of this blog: it's really hard to build a stand-alone tech business nowadays. The complete offering that firms need to provide are complex and diversified, and the incumbents have strong distribution channels and financial positions to keep out any newcomer. Unlike in the early PC era, they are no longer complacent and ignoring new threats and opportunities.