Friday, January 30, 2009

EMC racks up record results

You gotta hand it to the folks in Hopkinton: In what might turn out to be the worst IT spending slump since 2001—2002, EMC managed to post record-setting financial results not only for 2008 but also for the fourth quarter.

This week, the company announced that its 2008 revenues hit $14.88 billion – up 12% over 2007. Q4 2008 revenues topped $4 billion – up 8% sequentially and the first time EMC topped $4 billion in a quarter (not to mention generating an operating cash flow of $1.1 billion and free cash flow of $775 million). And it was the company’s sixth consecutive year of double-digit revenue growth.

On the storage front, the company reported that its Information Infrastructure business (which includes storage, RSA security, and content management and archiving products) racked up $3.5 billion in the fourth quarter – an increase of 8% sequentially. (VMware contributed revenue of $514 million in the fourth quarter, and $188 billion for the year.)

Storage-specific revenue increased 4% in 2008, in spite of weak Symmetrix performance (down 9%). That compares to IBM’s 16% decline in storage revenues in 2008, according to Robert W. Baird & Co.

But beyond the stellar financial results (given the macro economic conditions), I’m even more impressed with the company’s cost cutting measures, which recently included layoffs of about 2,400 employees, or approximately 7% of the company’s workforce, and a restructuring that included consolidating back-office functions, reduced spending on contractors, and a reduction in “management layers.” EMC officials expect the restructuring to reduce the company’s cost base by $350 million this year.

During the announcement, EMC officials estimated that 2009 global spending will decline as a percentage in the mid to high single digits compared to 2008, and that a higher-than-usual percentage of IT spending will take place in the second half of the year.

Friday, January 23, 2009

Application-centric storage challenges SANs

I’m in the process of editing an interesting, and perhaps controversial, article by Andrew Reichman, a senior analyst at Forrester Research. It’s based on his report, “Do You Really Need a SAN Anymore?” and makes the argument that application-centric storage may prove to be a viable alternative to traditional SAN architectures.

“Application-centric storage” is when application vendors embed storage functionality into their code to handle some, or many, of the functions typically handled by disk array vendors or third-party software vendors. As such, storage is managed from within the application itself.

I sincerely doubt that application-centric storage will challenge SANs, but in some cases it could make a lot of sense. And don’t underestimate the storage plans or capabilities of vendors such as VMware, Microsoft and Oracle.

Here are some examples, which I’m lifting from the article:

Oracle offers branded storage hardware under the Exadata label. Using its Automatic Storage Management (ASM) feature to control the flow of data between application servers, and storage servers provided by technology partner HP, the Exadata system is a hybrid of software and industry standard hardware that Oracle will sell directly.

Microsoft recommends DAS for Exchange 2007. Exchange has long had a best practice for configuration that precluded adding other workloads to the storage array it runs on, which has served to put it on an island. Now, with the addition of Cluster Continuous Replication (CCR), the application can manage its own high availability and replication.

VMware offers native storage management capabilities. The virtualization market leader continues to add storage features to its application stack. For example, VMFS offers volume management capabilities within virtual machine management, and VMware recently announced vStorage, which includes native thin provisioning and other key storage features. While many of the storage features within VMware leverage SAN array capabilities, the control and management is substantially shifted to the application realm.

Leading application vendors probably won’t rock the SAN boat, but it’s quite possible that they’ll provide some worthy competition to the pure-play storage hardware/software vendors.

Tuesday, January 20, 2009

SSDs a bright spot?

In a down economy, with severe belt tightening in the IT sector, some technologies actually have an advantage. And on the storage front, solid-state disk (SSD) drives may be one of them.

In a recent InfoStor QuickVote poll of our site visitors, 9.8% of the respondents said they were currently using solid-state disk (SSD) drives in enterprise storage systems (as opposed to laptops or desktops), while another 26.3% said they plan to use SSDs within the next year. However, 63.9% had no plans to use SSDs. Nevertheless, virtually every storage industry analyst puts SSDs on their list of top technologies for 2009.

Although the shipment numbers may still be low, there are signs that the enterprise SSD market is poised for takeoff this year. For example, STEC has an impressive roster of SSD design wins, including EMC, Sun and another biggie expected soon.

Long-time SSD player (30 years) Texas Memory Systems reports that sales of its RamSan line of SSDs grew 20% in 2008. And the company posted record revenues in the fourth quarter. That’s despite increased competition and the entry of heavyweights such as Intel into the SSD space.

In an article published on, “SSDs poised for the enterprise,” Objective Analysis’ Jim Handy predicts that shipments of SSDs are expected to hit 1.7 million units in 2013, representing an average annual growth rate of nearly 150%.

Sure, SSDs are still incredibly expensive if you look at it from a cost-per-GB basis, but if you look at it from a cost-per-IOPS basis they could actually save money over buying loads of spinning disks – not to mention the energy savings. And manufacturers report that the price of materials is declining rapidly.

“We are cautiously optimistic about 2009,” says Woody Hutsell, Texas Memory’s executive vice president. “SSDs are an important part of telecommunications systems, financial exchanges, national defense systems and green IT initiatives, which are likely to benefit from government investment. SSDs can cost-effectively extend the life of existing IT infrastructure, allowing cash-strapped IT managers to postpone major purchases.”

But whether or not SSDs really take off this year will depend in large part on whether manufacturers can meet the expected price decline expectations.

Thursday, January 15, 2009

Dr. Dedupe blog

In previous posts I've noted that data de-duplication will be one of the, if not the, hottest storage technologies in 2009. For a humorous (and, well, odd) look at data de-duplication, check out NetApp's Dr. Dedupe Blog.

Better yet, check it out on YouTube.

Tuesday, January 13, 2009

2009 VAR outlook: temporarily grim

If you want to take the economic pulse of the storage industry, look straight to the channel. That’s what Robert W. Baird & Co. does on a quarterly basis, and the firm just released results of its Q4 2008 survey of 40 enterprise resellers representing about $6 billion in annual IT spending.

The fourth quarter actually wasn’t that bad, with channel respondents split almost evenly among ‘above plan,’ ‘on plan’ and ‘below plan’ in terms of revenue. In fact, things improved in Q4 vs. the difficult Q3.

Not surprisingly, resellers expect Q1 2009 to be at or below normal seasonality, but they do see storage as a relative area of strength throughout the year. In fact, 30% of the survey respondents cited storage as the strongest area of IT spending, followed by server virtualization, which was cited by 11% of the VARs. (The weakest sectors are PCs and physical servers.)

Baird analysts summarize VARs’ performance as “lackluster,” although given the dour macro economic situation I’d say “lackluster” has become a very positive term.

Among the vendors getting the highest marks from the channel: Brocade, CommVault, Data Domain and NetApp.

And when the VARs were asked which vendors save their customers the most money, VMware topped the list, followed by Data Domain, NetApp, HP and CommVault. Rounding out the top ten were IBM, EMC, EqualLogic, Hitachi and Brocade.

Tuesday, January 6, 2009

Top storage technologies for 2009

It’s time to ring in the New Year with the obligatory Top Storage Technologies for 2009. I’ve culled through dozens of picks from the vendor community, and the one that comes closest to my own predictions is from HP. So, according to me and HP, here are the hottest storage trends for this year, in no particular order:

Cloud-based storage is changing how companies commoditize and store the exponential amounts of data from video sharing, digital media and social networking sites. The need to store massive amounts of data with real-time access capabilities will change the storage industry in 2009 as we see a greater uptake in cloud-based storage solutions that address the challenges of data growth, but at a fraction of the cost of traditional storage infrastructures.

Data de-duplication. By drastically increasing disk utilization (some vendors claim data de-dupe ratios of 50:1 or more, although your mileage will vary), data de-duplication reduces storage costs and improves capabilities such as disaster recovery.

Solid-state disk (SSD) drives: In a recent InfoStor QuickVote reader poll, only 6% of the respondents were currently using SSDs; another 6% planned to purchase SSDs within the next six months; 14% within the next six to 12 months; and 74% had no plans to use SSDs. However, according to HP: “Once the industry addresses the cost premium and capacity challenges of SSDs, we will be one step closer to IDC’s predicted 70% compound growth rate for SSDs by 2012.”

Virtualized storage: IT organizations are looking to virtualize their storage environments to achieve the same benefits they’ve seen from server virtualization. This is leading to “shared data” architectures that ease storage management burdens.

Secure storage: Industry and government compliance requirements, as well as the need to protect sensitive data, will put storage-level security at the forefront in 2009. More and more users will opt for encryption, including drive-level encryption, to protect data.

Energy-efficient storage: Technologies such as data de-duplication and SSDs eliminate the need for unnecessary hardware to improve performance while reducing power consumption.