Monday, October 26, 2009

VARs rank vendors

October 26, 2009 – In my last post I recapped the results of a channel survey conducted by Robert W. Baird & Co., concluding that the majority of resellers are optimistic about their revenue prospects in the fourth quarter. In fact, it was the most optimistic response since Baird’s Q2 2008 channel survey, indicating that a turnaround in IT spending is underway (see “VARs upbeat about Q4” ).

Baird analysts also surveyed resellers about the performance of vendors in a variety of areas. When asked which vendors were above plan, on plan or below plan, VMware topped the list, followed by NetApp, Cisco, Symantec and Hitachi. Among major vendors, IBM was ranked lowest, with many more VARs reporting that sales of IBM gear were below plan than above plan or on plan.

In terms of “channel friendliness,” LeftHand and NetApp led the pack, with CommVault, HP and Hitachi rounding out the top five. At the bottom of the list (although still posting scores of better than 5 out of a possible 10, were Isilon, IBM, EMC, and EqualLogic.

When asked which vendors’ products they would sell more of in 2010, VARs cited VMware, EMC, Cisco, NetApp and HP most often, with IBM in last place. (It was EMC’s strongest showing in this category since Baird’s Q3 2008 channel survey.)

When asked how they perceived various storage vendors in the next 3 to 6 months, Data Domain topped the list, followed by NetApp, EMC, LeftHand, CommVault and Hitachi. In negative territory (more VARs saying sales were declining vs. improving) were HP, Dell, IBM and Sun.

Baird analysts also asked VARs to rank vendors by specific technology. Here are the leaders in various categories, in decreasing order:

Fibre Channel SANs: EMC, Hitachi, HP, IBM, Compellent, NetApp
NAS: NetApp (by a long shot), EMC, HP, IBM
iSCSI SANs: NetApp, EqualLogic, LeftHand, HP, EMC, IBM

In one final note on the emerging technology front: Baird analysts queried VARs about end-user interest in FCoE, and 74% of the respondents indicated that there is “some interest, mostly evaluating;” 15% said that demand was “ramping moderately;” and 2% said that there was “strong demand” for FCoE.

Wednesday, October 21, 2009

VARs upbeat about Q4

October 21, 2009 – Indicating that a turnaround in IT spending is imminent, or underway, a recent survey of the channel conducted by Robert W. Baird & Co. shows that VARs are upbeat about fourth quarter prospects. In fact, it’s the most upbeat response that Baird has seen since its Q2 2008 survey.

The results are based on a survey of 47 enterprise resellers with total annual revenue of $8.2 billion and average revenue of $198 million per year.

In terms of Q4 expectations vs. Q3 reality, 32% of the resellers were positive (expecting increased revenues), 54% were neutral, and only 12% were negative re Q4 performance.

Large VARs (more than $100 million in revenues) were much more positive than VARs with less than $100 million in revenues. For example, 47% of the large VARs expect increased revenues in the fourth quarter, 32% were neutral, and only 9% were negative. (The rest said it was too early to tell.)

For perspective, in the third quarter 46% of the VARs were below plan, 39% were on plan, and only 15% were above plan.

Baird also surveyed resellers about which storage technologies were in highest demand. Topping the list were cost-saving technologies such as data deduplication and thin provisioning. And VARs cited Data Domain as the leader in data deduplication, and 3PAR as the leader in thin provisioning

In my next blog, I’ll take a closer look at the channel’s views on specific vendors. In other words, the apparent winners and losers going into 2010.

Friday, October 16, 2009

Check out the Channel Chargers

October 16, 2009 – I spent most of this week at the Storage Networking World (SNW) show in Phoenix. For the past couple years I’ve been advocating that SNW management consider (a) collapsing the show into one event per year and (b) getting more storage channel professionals (VARs and integrators) to attend and participate in the show.

I’ve changed my mind on (a). Assuming reports of a turnaround in IT spending have not been greatly exaggerated, I think the storage industry needs, and can sustain, two SNWs per year. Although attendance, the number of exhibitors, and product introductions were way down compared to the show’s heyday, it’s still a vibrant forum for the exchange of information between vendors, users and the channel.

And there did seem to be more channel presence at this week’s show.

In addition to meeting with a boatload of vendors, industry analysts and some end users, I had an interesting dinner with a startup that doesn’t fit into any of those categories: the Channel Chargers. Since they’re based in San Diego, their company name is even cooler than it seems.

Basically, Channel Chargers delivers an active link between vendors and reseller/integrators, providing channel strategies and also connecting vendors and VARs. Other outfits do this, but the management team at Channel Chargers has more channel experience than the other outfits, with a strong focus on storage.

If you’re a vendor, particularly if you’re a startup, that needs to establish or expand relationships in the channel, or a VAR looking for some interesting new products to sell, check out the Channel Chargers.

Back to SNW: There weren’t many products introduced at the show, but for a quick rundown of announcements see “Product highlights from SNW.”

As for the Most Interesting Product, I’d give that award to WhipTail Technologies, a startup specializing in solid-state disk (SSD) appliances

WhipTail introduced the Racerunner version of its SSD appliances, which include Exar’s Hifn BitWackr data deduplication and compression cards and software. The configuration provides an inline (as opposed to post-processing) capacity optimization appliance for primary storage. The SSD appliances are available in 1.5TB, 3TB and 6TB versions.

James Candelaria, WhipTail’s CTO, claims a minimum 10:1 deduplication ratio in virtual server environments, and on average 2:1 to 4:1 optimization ratios in non-virtual server environments (although deduplication ratios vary widely depending on data types). Factoring in the overhead associated with compression and deduplication, Candelaria cites performance of 60,000 I/Os per second (IOPS) on reads and 25,000 to 30,000 IOPS on writes, although the company has not completed its testing of the Racerunner appliances with the BitWackr cards. The deduplication/compression cards are offered at no extra charge.

Bottom line: When you combine compression and deduplication with the falling prices of SSDs, you approach price parity between SSDs and HDDs.

WhipTail also launched its VIPER channel partner program.

Overall, at SNW I sensed a level of optimism that hasn’t been present at the show for the last two years or so, both in terms of the general storage business and the show itself. I hope they can maintain the 2x/year format.

Monday, October 12, 2009

Brocade on the block

October 12, 2009 – The rumors are swirling that Brocade has quietly put itself up for sale, and the buzz will probably pick up at the Storage Networking World show in Phoenix this week. It all started with an article in the Wall Street Journal, “Network Specialist Brocade Up for Sale."

I don’t think Brocade will be acquired, at least not in the next year. The company’s in great shape from a financial and market-share perspective, and its value will continue to grow. Why sell now?

When these acquisition rumors start flying, I like to check out what the financial analysts have to say. And two of my favorites are Paul Mansky at Canaccord/Adams and Glenn Hanus (and colleagues) at Needham & Company. Both analysts focus on the storage industry.

Here’s a clip from Paul Mansky’s notes on the subject:

“We agree Brocade boasts strong strategic positioning . . . but we take issue with the prevailing argument the company is a near-term acquisition target. The independent OEM-centric business model is central to the company's ability to maintain its storage footprint during the pending protocol transitions, while the ‘anybody but Cisco’ story in Ethernet switching has not even begun to ramp. Ownership by a single OEM would hasten the demise of Fibre Channel (60% of revs) while limiting the Ethernet switch TAM expansion story. In our view, a sale today is like punting on second down.”

Or tossing a Hail May on first possession, first down.

More Mansky:”To the degree that there is an appetite to flesh out or build Ethernet switch product lines or gain access to closely held Fibre Channel technology, we view there to be several less expensive candidates. In Ethernet switching, this would include 3Com, Extreme and Force10. In Fibre Channel, we view QLogic as an eager seller of its switching product line -- possibly for as little as $300-350 million.”

I agree: There are much cheaper ways to get what Brocade has to offer, even if it means acquiring two companies.

Speculation centers on HP and Oracle as the most likely acquirers, but Needham’s Hanus puts a number of other vendors in the potential mix, including an “A” list of HP, IBM and Juniper, with Oracle and Dell as remote possibilities.

Commenting on the most likely suitor, Hanus (with colleagues Rich Kugele and Greg Mesniaeff) writes:

“Historically, HP has had a strong relationship with BRCD in the fibre channel arena. It is speculated that HP will eventually at least resell/OEM BRCD's Foundry related gear as HP defends itself against Cisco getting into the server space and resells less Cisco IP networking gear. HP has its Procurve switch line as well. If BRCD were to get acquired by IBM, it would be a big problem for HP as BRCD has 70% or so of the fibre channel switch market. Cisco is the distant #2 player with Qlogic #3. Obviously, HP does not want to source FC switching from IBM or Cisco. If HP owned it, a challenge could be some reduction in BRCD revenue base as HP competitors IBM/Dell (current large BRCD partners) would try and move away. Also HP does not have a reputation for paying up for M&A targets. Overall though, we see HP as one of the leading contenders if BRCD decides to sell.”

I’ll be at the Storage Networking World conference for the next couple days, and if anything interesting happens – regarding Brocade or otherwise – I’ll let you know.

Monday, October 5, 2009

iSCSI + NAS for virtual servers?

October 8, 2009 – When end users first started the mass migration to virtual servers, the majority did so with direct-attached storage (DAS) as the underlying storage architecture. They quickly found out that virtualization required networked storage, and the incumbent SAN protocol – Fibre Channel – became the front runner in the race toward dominance in server virtualization storage architectures.

Fibre Channel SANs are still the dominant storage architectures in virtual operating environments, but iSCSI – and also NAS – are coming on strong.

In an QuickVote poll (conducted last year), we asked virtual server users what their primary storage configuration was. More than half (53%) cited Fibre Channel SANs, 28% were relying primarily on iSCSI, 10% on NAS, and only 9% on DAS. Since then, I’m sure the percentages for iSCSI and NAS have shifted upward.

That survey didn’t ask whether users were combining different storage architectures to support their burgeoning virtual server implementations. However, combining SANs and NAS appears to be a strong trend.

In an end-user survey, Enterprise Strategy Group (ESG) posed the following question:

Does your organization have plans to consolidate NAS and SAN storage resources into a unified storage architecture that supports both file-based NAS and block-based SAN storage?

With the caveat that the question was not posed in a virtual server context, it’s interesting to note that well over half of the respondents (67%) planned to pursue a “unified storage” (SAN+NAS) strategy. In fact, 18% were already underway – and the ESG survey was conducted late last year.

Among those that are moving to unified storage architectures, 41% plan to rely primarily on NAS gateways to front-end SANs; 18% plan to rely primarily on unified NAS-SAN storage systems; and 40% plan to use both approaches.

If you’re among the growing group of users that are deploying iSCSI + NAS architectures – particularly if you have virtual servers – check out our Webcast, “Unified Storage for Virtual Servers: iSCSI SANs and NAS.” If you missed the "live" version earlier this week, you can view the archived version here.

ESG analyst Terri McClure presents interesting data from ESG’s end-user surveys and discusses trends in the context of unified storage and virtual servers. And John McArthur, president and co-founder of Walden Technology Partners, discusses solutions that enable you to combine iSCSI SANs and NAS to optimize efficiencies in virtual server environments – at a low cost and with minimal management overhead.

Choosing the right storage architecture for your virtual server environment is not an either-or decision.