Dave Simpson's Storage Blog

NetApp to buy LSI’s Engenio for $480 million

2011-03-09T17:13:00.000-08:00

March 9, 2011 – Following Monday’s announcement of Western Digital’s plan to acquire Hitachi GST for $4.3 billion, consolidation in the storage industry continued today with NetApp’s surprise announcement that it will buy LSI’s Engenio business for $480 million in cash – the largest transaction in NetApp’s history. The deal is expected to close within 60 days.

NetApp officials expect the acquisition to add $750 million to its revenue stream in fiscal 2012, and to add $5 billion to its total addressable market (TAM) by 2014.

LSI’s Engenio division had revenues of $705 million in 2010. (LSI’s entire storage portfolio generated revenues of $954 million in 2010.)

The new unit will be run by Manish Goel, executive vice president of NetApp’s product operations.

It’s important to note that NetApp is buying only the Engenio product line (external disk arrays), not LSI’s other storage lines (e.g., the ONStor and MegaRAID and 3ware controller/adapter families).

In acquisitions such as this, it’s customary to examine product overlap between the two companies’ product lines. However, NetApp officials didn’t really address that during their conference call. Instead, they focused on new workloads (vertical markets) that the company can penetrate better with Engenio’s technology than with NetApp's FAS technology. NetApp officials cited video (including full-motion and surveillance) and high performance computing (HPC), as well as multimedia, oil and gas, semiconductor simulation, weather simulation, medical imaging, and content distribution.

In addition to those new fast-growth verticals, NetApp officials noted that the Engenio acquisition will significantly expand NetApp’s channel strategy.

Fine, but the interesting question is what will happen to Engenio’s OEMs partnerships. Engenio’s OEMs include IBM (Engenio’s largest customer, and already a NetApp partner), Oracle/Sun, Dell, SGI and Teradata.

In today’s conference call, NetApp CEO Tom Georgens (who was formerly with Engenio) subtly danced around this issue, and downplayed the OEM side of the deal. Here are some clips from Georgens:

“Clearly, we have to have dialogue [with Engenio’s OEMs ]. . . Our objective is not to undermine the OEM business; our objective is work hand-in-hand with them . . . [but] if things change and a relationship becomes less friendly, I think we have the tools to compete that the previous owner of this business did not.”

More clips: “We expect [the OEM business] to roll off a bit. It’s certainly not going to be a growth element. The growth will come from the new business . . . and expanded TAM . . . At the price we’re paying . . . and the potential return, I think we would have justified this transaction with no OEM business.”

And in response to a question about whether NetApp would be able to keep all of Engenio’s OEMs: “I think that we’ll keep a number of them, or a large portion of the OEMs, but I don’t think we’ll keep every dollar of OEM revenue . . . I’m not saying that OEMs don’t matter, but the growth is elsewhere [in the new vertical markets].”

I’d guess that the OEM relationships with Oracle/Sun and Dell will be on shaky ground, but if the storage opportunities in areas such as video and HPC grow as rapidly as expected, and NetApp can gain significant market share in those verticals with the Engenio technology, then the OEM side of this equation may not matter.

As for LSI: The company’s press release said that “The strategic decision to divest the external storage systems business was based on the company’s expectation that long-term shareholder value can be maximized by becoming a pure-play semiconductor company.” In conjunction with the acquisition announcement, LSI said that its board of directors has authorized a new stock repurchase program of up to $750 million.

EMC lengthens its lead in disk array fray

2011-03-07T12:13:00.000-08:00

March 7, 2011 – Despite impressive growth from some its arch rivals (most notably, NetApp) EMC appears to be widening the gap between itself and its collective competitors, according to a report on the disk systems market by IDC. The market research company recently issued statistics for the fourth quarter and full-year 2010, including market size, vendor shares and revenues.

EMC capped 2010 with a 25.6% market share on revenue of $5.44 billion in the external disk systems market. That compares to a 2009 market share of 22.9% on revenue of $4.1 billion.

Rounding out the top 5 in 2010 were IBM (13.8% share, down slightly from a 14.3% slice the previous year), NetApp and HP (tied with 11.1% market shares) and Dell (9.1% share on 2010 revenue of almost $2 billion).

EMC posted impressive 2009—2010 revenue growth of 32.5%, but that was overshadowed by NetApp’s whopping 49.5% revenue growth. NetApp raked in $2.35 billion in 2010, vs. $1.57 billion in 2009.

Going forward, it will be interesting to see how HP’s acquisition of 3PAR, EMC's acquisition of Isilon, and Dell’s acquisition of Compellent will alter the market share dynamics and revenues.

Conspicuously absent from the top 5 in 2010 was Hitachi Data Systems. However, HDS did claw its way into the top 5 in the fourth quarter of 2010, ending the quarter in a virtual tie with Dell for the last spot. HDS garnered an 8.7% share in 4Q10 on revenue of $533 million vs. Dell’s 7.9% share on revenue of $483 million.

In the fourth quarter, EMC pulled in $1.58 billion for a 26% market share. That compares to a share of 23.9% in 4Q 2009 ($1.25 billion in revenue).

However, NetApp’s surge was again apparent in the fourth quarter of 2010. The company posted year-over-year revenue growth of 43.7% (vs. 26.3% for EMC), and closed the gap with HP on revenue of $630 million vs. HP’s $704 million.

Last year was a good one for the external disk systems market, which grew by 18.3% to top $21 billion.

Breaking down 4Q10 by market segments: the NAS market grew 41.3% year over year. EMC was #1 in NAS, followed by NetApp at 23.7%.

The iSCSI market posted equally impressive gains, growing 42.1% in 4Q10 vs. 4Q09. Dell was #1 in the iSCSI space with a 32.6% share, followed by HP (14.7%) and EMC (13.4%).

One more fun fact: EMC has been #1 in the external disk systems market for 14 consecutive years.

For more details, see IDC’s press release: “Worldwide Disk Storage Systems Finishes 2010 with Double-Digit Growth on Strong Fourth Quarter Results.”

What are your post-lease options?

2011-03-04T13:50:00.000-08:00

March 4, 2011 – When your lease or warranty runs out (or even when you’re on lease or warranty), you have a number of options. You can undergo a total technology refresh and buy new systems from your primary storage supplier – an expensive option, and it’s likely that you don’t really need the latest and greatest gear. Or, you can re-up and sign an extended service-and-support agreement with your primary vendor – another expensive option.

Alternatively, you can contract with a third party that provides support for all kinds of IT hardware. But let’s say you’re a NetApp shop: What level of expertise does a general-purpose third party really have on NetApp systems?

A third alternative is to sign a services-and-support contract with a third party that specializes specifically in the type of hardware you have. In the case of NetApp systems, a good example is Zerowait.

I recently chatted with Mike Linett, Zerowait’s president and CEO, and Rob Robinson, the company’s vice president of sales.

Zerowait specializes in service and support of NetApp equipment – and only NetApp. Prior to 2002, Zerowait was a NetApp reseller, but when NetApp nixed that deal Zerowait moved into the service and support business, competing with NetApp.

Linett claims that Zerowait typically charges about half of what NetApp charges for service and support. But according to one of Zerowait’s customers, the savings could actually be much higher.

“Zerowait is 50% to 90% less expensive than NetApp, depending how old your hardware is,” says Balazs Nagy, manager and chief architect at NewPush, an application and data warehousing hosting company. “The older the equipment, the more prohibitive NetApp makes it for service and support, and if the equipment is very old NetApp won’t even support it.”

NewPush has a services and support agreement with Zerowait that covers four NetApp systems.

Besides the basic support you would expect from a third party, what can a company such as Zerowait provide?

“Zerowait allows us to have spare parts onsite at a very low cost,” says Nagy, “but they also provide much more in-depth phone support than NetApp does, as well as remote or onsite engineering, architecting and education services.”

In a time of tight IT budgets, Zerowait seems to have a good business model. The company grew 45% last year, according to Linett. And Zerowait is expanding worldwide (Europe in 2008 and Australia near the end of last year).

“The typical lease is three years, but these days a lot of people want to extend that to five or six years before they do a refresh,” says Zerowait’s Robinson.

In addition to third-party support services, Zerowait also offers off-lease transferable license systems. More recently, the company began selling its SimplStor system for secondary storage. SimplStor is based on commodity hardware (SuperMicro chassis and drives from Seagate or Hitachi) and open-source operating systems.

NewPush, for example, recently began offering private remotely-managed storage services based on Zerowait’s SimplStor. The service, which starts at $75 per TB per month, is positioned as an alternative to public cloud storage services.

Chelsio challenges Emulex, QLogic, Intel, et al

2011-02-28T07:34:00.000-08:00

February 28, 2011 – If you look at the converged network adapter market through the eyes of a storage professional, the first two vendors that may come to mind are Emulex and QLogic. If you look at it from a network professional’s view, you might think first of Intel and Broadcom. And if you’re into the high performance computing/clustering space, you might think of Mellanox.

There’s another key player in the converged adapter market: Chelsio Communications, which today announced a line of Unified Wire Adapters based on its Terminator 4 (T4) chips.

I recently spoke with Kianoosh Naghshineh, Chelsio’s CEO.

In the converged adapter market, vendors tend to crow about a few things: first to market, which generation silicon they’re on, how many storage/networking protocols they support and/or offload, how many virtualization standards they support, and how many ports per adapter they have.

Chelsio is firing on all those fronts. For example, the company introduced seven fourth-generation (T4-based) PCIe 2.0 adapters today with a variety of port configurations, including a version with four 10GbE ports and a version with four 1GbE ports. That differentiates Chelsio from some of the other players in the converged adapter market.

I hate to draw up laundry lists, but there’s no other way to convey how Chelsio differentiates itself from some of the other, more well-known, players – so here we go:

In terms of offload functionality, Chelsio has a TCP/IP Offload Engine (TOE), and also claims to be able to offload iWARP RDMA, iSCSI (full offload in T4), FCoE (open FCoE as well as full HBA, or hardware-based, FCoE offload ), UDP, and Multicast – most of which is new in the fourth generation adapters. The adapters also support the Data Center Bridging (DCB) protocol. (Of course, this begs the question of who would possibly want, or need, to run all of those protocols, but that’s a subject for another blog post.)

In terms of virtualization-related standards, Chelsio claims to support SR-IOV, VEB, VEPA, Flex10 and QFC/VNTag in its fourth-generation T4 adapters. The converged network adapters also include an embedded switch, which can be beneficial in virtualized environments because it can switch traffic from as many as 140 virtual and physical ports per adapter.

And Chelsio supports all that stuff on a single card and with one firmware version. (Some other converged network adapter vendors have different cards/firmware for different protocols.)

Pricing for Chelsio’s adapters starts at $579.

Unlike some other converged network adapter vendors, Chelsio does not announce all of its OEM design wins, but its publicly-announced server/storage OEMs include EMC (Isilon and Data Domain), HP, IBM, NEC and SGI. And Chelsio claims more than 100 OEM platform wins; 100,000+ ports shipped; and year-over-year revenue growth of 50%.

My point? The market for CNAs will be much more crowded and competitive than originally expected.

Related blog posts:

Intel’s card play in unified networking

Broadcom claims 2 million+ IOPS on converged controller

Related articles:

Emulex ships 10GbE CNAs to the channel

QLogic announces 10GbE NICs, CNAs

Cloud storage: Nirvanix takes shots at Amazon S3, EMC Atmos

2011-02-23T18:16:00.000-08:00

February 24, 2011 – IDC predicts that by 2014 the cloud storage market will exceed $7 billion per year. That compares to about $1.5 billion in 2009. Assuming IDC’s prediction comes true (which is debatable), it’s no wonder that so many vendors are crowding into the cloud storage space.
But every small cloud storage equipment/services provider has to come up with a business case that sets them apart from the 800-pound gorillas in the market, most notably Amazon and EMC.

All of the smaller players have value propositions versus the big boys, but Nirvanix has recently become one of the more vocal challengers. To back up their claims, Nirvanix officials cite customers such as NBC Universal and GE, both of which deployed Nirvanix’s cloud storage platform after evaluating Amazon S3, EMC Atmos and other alternatives.

I recently chatted with Geoff Tudor, vice president for strategy and business development at Nirvanix, and Steve Zivanic, Nirvanix’s new vice president of marketing.

Versus Amazon’s S3, Nirvanix claims a number of advantages. For example, unlike Amazon, Nirvanix allows customers -- including security auditors -- to inspect its data centers (of which there are seven worldwide). That might not be a big deal for many companies, but for those that still harbor concerns about certain aspects of the cloud – such as security – it might be important.

Nirvanix also allows customers to determine where their data will reside, and to provision their data, and guarantees Quality of Service (QoS) levels. And Nirvanix enables federation of public (remote) and private (local) clouds.

Versus EMC Atmos, Nirvanix claims scalability advantages (billions vs. millions of files), the ability to federate public and private clouds (vs. only private clouds), and independence from specific hardware and file systems. Nirvanix’s Web Services Layer can sit on top of virtually any file system, including those from NetApp, EMC (Isilon and Celerra) Exanet and Ibrix. In addition, Nirvanix users only pay for usable capacity (aka storage-as-a-service); there are no extra charges for data protection capacity (e.g., replication, RAID 6).

Nirvanix also differentiates its approach to cloud storage by offering different deployment options, which the company collectively refers to as “CloudComplete.” At the heart of each deployment option is the CloudNAS gateway.

From there, users can leverage Nirvanix’s Storage Delivery Network (SDN) public cloud platform, which provides a federated, tiered grid with a single namespace and unified view, or go with the company’s hNode software, which provides a cloud services layer for hybrid (public and/or private) cloud architectures.

More cloud storage articles:
Is cloud-enabled DR ready for prime time?
EMC debuts self-service platform for cloud storage
eSilo tackles cloud-based backup, DR
3X upgrades cloud storage appliances

NetApp profits up, shares down

2011-02-16T17:02:00.000-08:00

February 16, 2011 -- NetApp reported results for its fiscal 2011 third quarter on Wednesday. Revenue and earnings numbers were impressive, but guidance was apparently viewed as weak because investors sent NetApp’s stock price south.

NetApp raked in revenues of $1.27 billion in the third quarter. That compares to slightly more than $1 billion in the same period a year ago – a 25% growth rate.

Revenues for the first nine months of the fiscal year were $3.61 billion. And NetApp officials estimated revenue for the upcoming fourth quarter of approximately $1.38 billion. That means that the company has a good chance of topping the $5 billion mark for the full fiscal year.

Net income in 3Q2011 was $172 million, or $0.42 per share, compared to net income of $108 billion, or $0.30 a share, in 3Q2010.

Hardware (or what NetApp calls “product”) revenue was $818.6, up 32% year-over-year and +5% over the previous quarter. Software (“software entitlement and maintenance”) revenue was $183.8 million, which is a gain of 8% y-o-y and 3% sequentially. Revenue from services was $265.7 million, up 20% over the same quarter a year ago, and +6.5% sequentially.

I’m not a savvy investor, but those numbers look pretty good to me. Nevertheless, at one point after the report NetApp (NASDAQ: NTAP) shares were down about 6%. I’d guess that they’ll recover fairly rapidly.

During its third quarter, NetApp made the biggest product launch in company history (see “NetApp overhauls product line, from arrays to OS” ).

More recently, the company bought Akorri (see “NetApp to acquire Akorri Networks” ), and plans to roll Akorri’s BalancePoint management suite into the NetApp OnCommand management suite.

Related article: “EMC announces 41 new products”

LTO crushes other tape formats

2011-02-14T08:51:00.000-08:00

I’ve been around long enough to remember when the tape format wars were among the more interesting skirmishes in the storage industry. Remember LTO vs. DLT, DAT vs. AIT, 8mm vs. QIC, Stones vs. Beatles?
Today, the LTO tape format commands 87.2% of the tape cartridge market (excluding mainframe-oriented formats), according to tape media market research from the Santa Clara Consulting Group (SCCG). In the fourth quarter of 2010, revenue from LTO tape cartridges was about $182 million, vs. $209 million for the total tape cartridge market.

The surge in shipments of LTO cartridges is due in large part to the popularity of the newest generation of the format – LTO-5. Shipments of LTO-5 cartridges doubled in Q4 vs. Q3 (as was the case in Q3 vs. Q2), accounting for 10% of total cartridge sales and 25% of total revenue.

Even shipments of LTO-4 tape cartridges were up in the fourth quarter, representing 48% of total unit shipments and 24% of revenues.

At its current rate of market share gains, LTO will command more than 90% of the tape cartridge market by the end of this year.

HP led the LTO media market with a 34% market share, followed by Fujifilm and IBM, according to SCCG.

Near the end of last year, the LTO Program vendors (HP, IBM and Quantum) claimed that more than 3.3 million LTO tape drives, and more than 150 million LTO cartridges, have been shipped since the format was introduced.

Shipments of all other tape formats – including DDS/DAT, DLT, AIT, QIC and 8mm -- continued their ongoing declines. However, revenue from QIC cartridges – the oldest of the mid-range tape formats – still exceeded $1.8 million in the fourth quarter of last year.

Other tape-related blogs:

Who says tape is dead?

Tape: Spectra revenue up 60%, Oracle ships 5TB drive

The Top Ten Storage Startups

2011-02-03T10:22:00.000-08:00

UPDATED Feb. 4, 2011 – Last year, the number of startups that entered the storage market just about equaled the number of storage vendors that were acquired in the M&A fever. I have no idea when a startup ceases to be a startup, but when I first started this top ten list I gave it a three-year window. That proved too daunting, and the startups that launched two or three years ago have received plenty of coverage anyway. So I made it easy on myself and limited my picks to startups that either launched or shipped their first products during 2010. I also factored in technology innovation, company management and funding.

In alphabetical order, here are some of the more promising startups:

Actifio

Actifio coined the term “data management virtualization,” or DMV (but don’t try googling that acronym), to describe its software suite, which is packaged in appliances. The software is designed to reduce storage management costs (by as much as 90%, according to the company) by virtualizing storage resources and streamlining processes such as data protection, disaster recovery and business continuity. The goal is to reduce or eliminate separate silos of data protection point products.

“The paradigm we’re applying to data management is analogous to what virtualization did to servers,” said Ash Ashutosh, Actifio’s CEO (and formerly a founder of AppIQ, which was acquired by HP).

Related article: “Actifio introduces data management virtualization” (InfoStor)

Related blog post: “Keep an eye on this startup” (InfoStor)

BridgeSTOR

BridgeSTOR may be the youngest startup on this list (the company shipped its first products in late November 2010), but founder John Matze has been around the block, having started storage companies such as Siafu Software (acquired by Hifn, which was acquired by Exar) and Okapi (acquired by Overland Storage).

BridgeSTOR’s Application-Optimized Storage (AOS) appliances can combine data reduction technologies such as data deduplication, compression and thin provisioning, as well as encryption. The appliances are currently available in three models tuned for specific application environments, including VMware virtualization, backup applications, and network storage (iSCSI and NAS).

“BridgeSTOR does for storage what VMware does for servers,” said Matze.

Related article: “Startup BridgeSTOR enters data reduction market” (InfoStor)

Cirtas Systems

Cloud storage is clearly among the top storage technologies for 2011, so Cirtas seems to be in the right place with its Bluejet Cloud Storage Controller. The controller migrates data between a high-performance local cache and the cloud based on data access patterns.

“Today’s cloud is not truly a replacement for enterprise storage,” said Josh Goldstein, Cirtas’ vice president of marketing and product management. “Enterprise organizations won’t use cloud storage as is because it is insecure, slow, costly and lacks enterprise-class features.”

Cirtas hopes to change that situation with the Bluejet Cloud Storage Controller, which includes features such as data encryption, automated tiering, data deduplication, WAN optimization, compression and snapshots.

Last month, Cirtas tapped Gary Messiana as CEO. Messiana formerly held CEO positions at Netli and Diligent Software. Cirtas co-founder Dan Decasper continues as CTO. The company also announced Series B funding of $22.5 million, led by Shasta Ventures and Bessemer Venture Partners as well as first round investors NEA, Lightspeed Venture Partners and Amazon.

Related article: “Cirtas launches cloud storage controller” (Enterprise Storage Forum)

Gridstore

Gridstore’s NASg software virtualizes NAS nodes into a single pool of shared storage in a grid-based, parallel-processing, scale-out NAS architecture.

“The software resides on client systems and aggregates the processing power of those machines,” said Gridstore CEO and co-founder Kelly Murphy. “All of the storage processing is done on the client side, and we stripe data across all of the storage nodes.”

Gridstore won a “Best in Show” award in the “Best SMB Solution” category at the ITEXPO West 2010 show.

Related article: “Startup Gridstore addresses ‘NAS sprawl’” (InfoStor)

Infineta

Infineta hopes to solve the problems associated with moving data between data centers. The startup’s Velocity Dedupe Engine appliances include hardware-based data deduplication and are aimed at storage applications such as SAN replication for disaster recovery, backup and recovery, data migration, and cloud deployments.

Related article: “Infineta unveils deduplication for inter-data-center traffic” (InfoStor)

Kaminario

Plenty of vendors are touting the performance improvements from integrating solid-state disk (SSD) drives in their arrays, but if you want really fast I/O consider Kaminario’s DRAM-based K2 system. The K2 architecture has two key elements: ioDirectors and Data Nodes.

Kaminario claims performance of 1.5 million IOPS, or 16GBps of throughput, on a high-end K2 configuration with eight ioDirectors.

Related blog post: “Startup claims 1.5 million IOPS on RAID array” (InfoStor)

Nasuni

Nasuni launched its Nasuni Filer cloud gateway software in early 2010. The 2.0 version of the software includes enhancements for Windows environments, as well as support for Hyper-V, Azure and DFS namespaces. Nasuni 2.0 cache keeps copies of working files in local storage for fast access and deduplicates, compresses and sends file changes to the cloud. The software is available as a downloadable VM image.

Related articles:

“Startup Nasuni puts primary NAS in the cloud” (InfoStor)

“Nasuni overhauls cloud NAS filer for Microsoft environments” (Enterprise Storage Forum)

Nimble Storage

Nimble Storage is taking a somewhat unique approach by converging primary and secondary storage in a single iSCSI system that includes flash drives and SATA drives. The company’s Cache Accelerated Sequential Layout (CASL) architecture uses multi-level cell (MLC) NAND flash as a caching layer while offloading “cold” data to the SATA tier.

Features include inline data compression, data deduplication and WAN replication.

Nimble Storage recently received $16 million in Series C funding.

Related article: “Nimble iSCSI array merges primary, secondary storage” (Enterprise Storage Forum)

Pancetera

Pancetera is focused squarely on improving storage applications – primarily backup – in virtual environments. Last week, the company introduced Pancetera 2.1. New in the release is a SmartMotion module, which makes it easy to move VMs for applications such as backup, replication and migration, according to Bart Bartlett, Pancetera’s vice president of marketing. Bartlett claims that SmartMotion enables up to a 90% reduction in the bandwidth and time required to move VMs over LANs or WANs.

Pancetera also added change block tracking to its SmartRead module in the Unite 2.1 release, as well as a VMware vCenter Plugin.

Related article: “Pancetera reduces I/O for VM backups” (Enterprise Storage Forum)

StorSimple

StorSimple is combining four of the hottest technologies in the storage industry – cloud storage, tiered storage, data deduplication and SSDs – in its “application-optimized” cloud storage appliances for Windows applications. The startup shipped the StorSimple 5010 and 7010 appliances in December.

The company’s BlockRank technology automatically applies a priority to each block of data and places the data on the most appropriate storage tier (e.g., SSD, SAS, cloud), with the most-frequently-accessed data remaining on-premise. StorSimple’s appliances work with a variety of public cloud providers, including Amazon, AT&T, Iron Mountain and Microsoft’s Azure.

StorSimple has received a total of $21 million in funding (led by Mayfield Fund, which also funded 3PAR).

TwinStrata

Rounding out our list is yet another cloud storage specialist: TwinStrata began shipping CloudArray in May 2010.

CloudArray is available as a software-only virtual appliance or in a bundled iSCSI hardware appliance. CloudArray provides a hybrid (private and public) cloud storage architecture, and can be used with cloud services platforms from vendors such as Amazon, AT&T, EMC, Mezzeo, Scality and others.

The software features dynamic caching, which enables administrators to create multiple caches to tune application performance. Other features of CloudArray include snapshots, inline compression, AES encryption, replication, and a "compute anywhere" feature that allows users to run the software in a public cloud.

TAPE: Spectra revenue up 60%, Oracle ships 5TB drive

2011-01-31T09:37:00.000-08:00

January 31, 2011 – We’ve seen some impressive financial reports from the storage sector over the last week or so, but Spectra Logic’s caught my eye. The company recently reported on the first half of its fiscal year, which ended December 31.
Bearing in mind that this a company that focuses primarily on tape libraries (although it also sells disk-based backup systems): Spectra Logic’s overall revenue grew 34% year-over-year, but the real shocker was that revenue from its enterprise tape library line (T-Finity and Spectra T950) grew a whopping 60% and unit shipments grew about 100%.

Revenue from Spectra Logic’s T50e and T120 tape libraries grew 54%, and the company’s total tape library and media revenues increased more than 50% year-over-year.

As I -- and many others -- have said many times before, reports of the death of tape have been greatly exaggerated.

Company officials cited increased demand for tape libraries in applications such as active archives and cloud computing as driving forces behind the revenue growth.

Spectra Logic also got a strong assist from its channel partners, where revenue increased 70% year over year.

Oracle-Sun-StorageTek

Meanwhile, at the high end of the tape market, Oracle announced the T10000C tape drive, which has a native capacity of 5TB and a native transfer rate of 240MBps. That’s more than 3X the capacity of LTO-5 tape drives, and 1.7X the transfer rate of LTO-5 (which is by a long shot the most popular tape format today).

The T10000C drives are available with native 4Gbps Fibre Channel interfaces or native FICON interfaces for connection to mainframes. The drives include inline encryption that does not degrade the 240Mbps performance, according to Tom Wultich, Oracle’s director of product management for storage.

Integrating the T10000C drive (which carries an Oracle-Sun-StorageTek brand) into Oracle’s high-end tape libraries (the SL8500 and SL3000) enables users to scale to a native capacity of 500PB. Assuming 2:1 compression, which is fairly standard in the tape arena, users can scale to an exabyte.

If archives keep expanding at a blistering pace, we’ll have to get used to that term ‘exabyte,’ which is one quintillion bytes (and conjures up fond memories of the company that used to go by that name).

Related blog post:

Who says tape is dead?

EMC sets revenue records, again

2011-01-25T17:59:00.000-08:00

January 25, 2011 – I couldn’t find an iota of bad news in EMC’s Q4 and year-end financial report today, so I turned to the financial analyst community. They couldn’t find anything negative either, although a few of them noted that, going forward, EMC may face more hurdles than it’s used to facing.
While generally praising EMC’s report, Technology Business Research (TBR) analyst Greg Richardson noted that “TBR expects EMC to face headwinds from multiple forces as it attempts to expand in the midmarket. Although the company posted 22% year-to-year growth in mid-tier revenue in 4Q10, we believe EMC will be forced to adjust its services model in order to win in the channel against NetApp, which leaves whitespace for channel partners to utilize their own services when deploying and supporting NetApp products.”

Richardson also noted that “Additionally, EMC will face a hurdle in the form of public cloud adoption. As customers become increasingly more comfortable and trusting of the cloud’s security, TBR expects adoption of public cloud to increase, particularly in the price-sensitive low end of the midmarket.”

And Stifel Nicolaus analyst Aaron Rakers noted that, going forward, EMC could face increasing competition at the high end (Symmetrix) of the market, particularly from Hitachi (Virtual Storage Platform), IBM (refreshed DS8000) and from 3PAR now that HP owns that company.

Other than those potential future challenges, everything’s coming up roses for EMC.

The company set records across the board in Q410 and for the full year. Fourth quarter revenue was $4.9 billion, up 19% over Q409. GAAP net income increased 61% year-over-year to $628.6 million. GAAP diluted earnings per share were up 53%. EMC closed the quarter with $9.5 billion in cash and investments.

For the full year (2010), EMC’s revenue was $17 billion, an increase of 21% over 2009 revenue. GAAP net income increased a whopping 75% to $1.9 billion, and diluted earnings per share were up 66%.

EMC executives expect 2011 revenue to be in the $19.6 billion range.

Diving a little deeper into EMC’s fourth quarter numbers: Symmetrix revenue increased 19% vs. Q4 2009, and revenue from the company’s mid-tier lineup (Clariion, Celerra, Centera, Data Domain, etc.) was up 23%. Revenue from majority-owned VMware was up 38%.

Looking ahead, I’m sure EMC will get a nice boost when the Isilon product line ramps, and I also expect very positive results from the recently introduced VNX/VNXe unified storage product line. And with the large amount of cash on hand, expect EMC to make some more acquisitions this year, most likely in the cloud and virtualization spaces.

Related article:

EMC announces 41 new products

Book Review: "Data Center Storage"

2011-01-21T11:43:00.000-08:00

I recently read an advance copy of a book that’s due to be published in mid-February. I know and respect the author, and it’s rare that we get entire books on our favorite subject, so I was anxious to read it. It’s called Data Center Storage: Cost-Effective Strategies, Implementation and Management, by Hubbert Smith (see bio at the end of this post).

This book makes the case that IT organizations spend too much on storage, examines why, and provides practical advice on how to correct that situation.

According to Hubbert, the root causes of over-spending include using direct-attached server storage instead of consolidated storage; using old school performance-optimized designs rather than capacity-optimized storage; relying on single-tier storage rather than tiered storage; backing up to tape in situations where snapshots should be used; and not employing tiered storage SLAs. And, of course, over-spending on storage will accelerate as volumes of incoming data ramp up.

After examining the root causes behind over-spending on storage, Data Center Storage then provides solutions to “deliver more while spending less.”

The author sets out to separate the signal from the noise surrounding data center storage through use cases and coverage of key issues in storage performance, capacity, power and cost. The examples are usually supported with simple “financial scenario A vs. financial scenario B” cost analysis, including hardware, maintenance and operational (people) costs. The book goes deep enough into the technologies to offer IT-business-level understanding and recommends specific improvements for IT managers.

Data Center Storage then covers the building blocks of storage, including hard disk drives (HDDs) and solid-state disk (SSD) drives, in business terms such as IOPS/$ and GB/$, leading the reader to an understanding of the tradeoffs between storage capacity, performance and costs. Data center power is covered to an adequate depth to improve IT-business-level understanding, and at the end of every section the book offers recommendations for improvements -- in the context of financial scenarios -- to assist in the justification of spending on improvements.

Storage consolidation and data protection are also covered and, consistent with other sections in the book, improvements are provided with financial comparison templates.

The next sections of the book build on the storage consolidation theme, introducing storage tiering and tiering-specific Service Level Agreements (SLAs) covering performance, capacity, up-time, growth, RPO/RTO and price. All of this is in support of the book’s central theme: delivery of service levels and fiscal responsibility.

Data Center Storage de-mystifies new, and not-so-new, technologies such as virtualization, replication, snapshots, thin provisioning, and unified storage (SAN/NAS). The book provides insight into where these technologies have a payoff and where they have limited payoff.

The final sections of the book build on storage consolidation, tiering, reliability and SLA approaches to guide your organization in taking advantage of managed hosting and cloud services, including project planning and service provider vetting and SLAs, all of which is supported with the “financial scenario A vs. financial scenario B” concept.

Data Center Storage closes with insights into roadmap creation, project management and financial justification drawn from the author’s experience in technology company processes, which are equally applicable to IT.

This book is not for readers looking for a technology-only book -- those that exhaustively describe the inner workings of all the various RAID levels and the intricacies of Fibre Channel zoning and similar technical deep-dive topics.

This book is for IT storage professionals who manage storage systems, especially those lobbying for storage improvements to meet “spend less and deliver more” directives. Data Center Storage improves the possibility of fruitful interactions with the folks that control the budget and spending on storage.

I’d also recommend the book for IT business professionals that are tired of the marketing noise and weary of hearing about all the solutions in search of problems. The book provides a business-level understanding of storage use cases and associated costs, and should lead to more informed spending decisions.

Most storage books cover technology, and not business, issues. In contrast, Data Center Storage offers a unique and useful approach to business-meets-storage-technology. And, as the fundamental components of data center storage (performance, capacity, reliability/up-time, power and price) do not change significantly over time, this book could be an often-referenced source for any IT department -- small, medium or large.

For more info or to place an advance order, visit the Data Center Storage page on Amazon.com.

And here’s a little background on the author:

Hubbert Smith contributed to early versions of several disruptive technologies, including network-attached storage (NAS), server fail-over and storage replication. He also pioneered the creation and development of a new product category -- capacity optimized enterprise disk drives (aka Raid Edition) – which is used in enterprise storage and surveillance systems. Capacity-optimized drives now make up roughly one-third of all enterprise-class disk drives.

Smith contributed to the development of Serial ATA (SATA) industry standards, specifically those that enabled SATA to be used in enterprise storage systems. He is a patent holder and a published author (Serial ATA Architectures and Applications - Intel Press).

He holds a BS degree in Electrical Engineering from Auburn University and is currently Director of Product Management at LSI.

EMC + Dell: It’s not Ozzie and Harriet anymore

2011-01-19T15:25:00.000-08:00

January 19, 2011 -- It’s not news that the fissure is getting deeper, and wider, in the once rock-solid reseller relationship between EMC and Dell. And the fissure started looking more like a crevasse this week as the relationship became icy when EMC introduced the VNX and VNXe (entry level) line of unified storage systems as part of a massive rollout of new products (see “EMC announces 41 new products” ).

EMC chairman, CEO and president Joe Tucci made a number of interesting remarks this week, but I think the most strident was in a CRN article where he was quoted as saying: “In this product line [the VNXe] there is no Dell partnership. In any conversations we have had with Dell, Dell will not take up this partnership. They will not resell this product.” (See Joe Kovar’s article on CRN: “EMC’s Tucci: No Dell Partnership With VNX/VNXe.”)

Tucci went on to say: “Obviously some channel partners – maybe all channel partners – would see Dell as a competitor. Here we are saying ‘Don’t worry about it – Dell is not getting this product.’ It sounds like I’m saying ‘You can’t have it, Dell’ [but] basically, it doesn’t fit their strategy. It doesn’t fit our strategy.”

But it’s important to note that those comments related to the low-end VNXe (which has a starting price of less than $10,000), not the VNX line.

Here’s what Dell has to say, courtesy Dell spokesperson David Graves: “Dell is selling VNX through our reseller agreement. A Dell-branded OEM version of VNX is still in discussion. Dell and EMC have mutually agreed not to use Dell as a channel for the VNXe product – either as a reseller or a Dell-branded OEM offering.”

So Dell will not resell the VNXe but will – at least for now – resell the VNX as an EMC-branded product with the (unlikely) possibility of reselling it with the Dell-EMC brand.

A little (probably unnecessary for InfoStor readers) history: The EMC-Dell relationship began 10 years ago and was for some time a wildly successful win-win. The fissure in the relationship probably started to appear when Dell acquired EqualLogic, which put Dell on the storage map. (In its last reporting period, Dell stated that revenue from the EqualLogic line grew 66% over the previous year.)

The fissure widened when Dell made a bid for 3PAR (eventually losing a bidding war with HP) and started looking like a chasm when Dell said it would acquire Compellent, which is still in progress.

The decision (by EMC or Dell or both?) for Dell to not resell the VNXe is a real boon to EMC’s resellers, which otherwise would have had to compete with Dell. But the two companies should do the entire channel a favor and just sever the relationship and move on.

Related articles:

EMC announces 41 new products (InfoStor)

EMC’s Tucci: No Dell Partnership With VNX/VNXe (CRN)

Top Five Storage Technologies for 2011

2011-01-10T09:10:00.000-08:00

January 10, 2011 – Any top technologies list is somewhat (totally?) arbitrary. Do you pick them based on how interesting the technologies are? How much end-user interest is behind them? The extent to which the technologies will benefit end users? How much revenue they’ll generate? Or all of the above? Let’s go with “all of the above.”

Here’s my list of some of the key storage technologies for this year (in no particular order), with links to related in-depth features and recent product news articles from InfoStor and our partner site Enterprise Storage Forum.

#1. Solid-state disk (SSD) drives

2011 will finally be The Year of SSDs. All of the major disk array vendors now offer SSDs (mostly from STEC, although competition will heat up significantly this year). Prices are declining rapidly as volumes increase and technology improves. Some vendors are positioning relatively inexpensive multi-level cell (MLC), as opposed to single-level cell (SLC), NAND flash for enterprise duty. SSD and controller vendors have solved most of the issues around reliability and endurance which, together with the price declines, eliminate the primary gating factors to end-user adoption of SSDs.

Market researcher IDC predicts that the total SSD market will grow at a 58% CAGR in unit shipments and a 44% CAGR in revenues over the next few years.

The fastest growing segment of the overall market is enterprise-class SSDs, where unit shipment are expected to surge at a CAGR of 74%, and revenues are expected to grow at a 54% clip, through 2014.

IDC expects the total SSD market to exceed $7 billion in 2014.

Related articles:

Why solid state drives won’t replace spinning disk (Enterprise Storage Forum)

Fixing SSD performance degradation, part 1 (Enterprise Storage Forum)

Fixing SSD performance degradation, part 2 (Enterprise Storage Forum)

SSDs hit mainstream stride

Intel ships miniature SSDs

SSD update: Toshiba, OCZ

Hitachi GST enters SSD market

STEC scores OEM win with IBM for MLC SSDs

LSI ships SSD-based accelerator card

#2. Data reduction (data deduplication and/or compression) for primary storage

Just like data deduplication for secondary storage swept the market and became mainstream over the last couple years, data reduction for primary storage will gain traction in end-user adoption over the next two years.

Interest in data reduction for primary storage picked up significantly last year due in large part to a number of factors, including NetApp’s evangelizing the technology, IBM’s acquisition of Storwize, Dell’s acquisition of Ocarina, and the entry of startups such as BridgeSTOR.

Related articles:

IBM to buy Storwize for real-time data compression (Enterprise Storage Forum)

Dell to acquire Ocarina for data deduplication

Startup BridgeSTOR enters data reduction market

Musings on the future of data dedupe (blog post)

Data deduplication: Permabit finds success with OEM model (blog post)

#3. Cloud storage

A few years after the term ‘cloud storage’ was introduced, vendors and users are still debating what it is. Let’s just call it storage-as-a-service, whether internal (private) or external (public, or hosted). There were probably more product/service announcements regarding cloud storage last year than any other technology. And there’s little doubt that will continue in 2011.

Related articles:

SNIA forms Cloud Backup and Recovery SIG

SNIA develops standards for cloud storage

SNIA completes cloud storage standard

Guidelines for implementing cloud storage

EMC debuts self-service platform for cloud storage

F5 ARX appliances integrate with cloud storage

#4. Data center convergence

Data center convergence can be viewed as the unification of storage, servers and networks, or, as the convergence of networks. In the context of the latter, we’ll see increased end-user interest in Fibre Channel over Ethernet (FCoE) in 2011, which was stalled over the last year due in part to the slump in IT spending. But as the IT world moves to 10GbE, the old FCoE-vs.-iSCSI debate will be renewed this year (with a lot of the debate centered on performance and cost issues).

I also expect a lot of controversy over the various approaches to converged (10GbE/FC/iSCSI) adapters, which are usually referred to as converged network adapters (CNAs). Expect a battle royale between vendors such as Emulex, QLogic, Intel, Broadcom and others.

Related articles:

Guidelines for FCoE deployment

FCoE I/O convergence and virtualization

Brocade moves FCoE beyond top-of-rack (Enterprise Storage Forum)

Broadcom claims 2 million+ IOPS on converged controller (blog post)

Intel’s card play in unified networking (10GbE+iSCSI+FCoE)

#5. Storage solutions for virtual servers and desktops

There has been a lot of innovation from storage vendors as well as virtual server platform vendors over the last few years in the area of optimizing storage for virtual server environments, particularly in disk arrays and backup/recovery software. But this year, Virtual Desktop Infrastructure (VDI) deployments will take off, and just as virtual servers created a lot of storage challenges, so will VDI.

According to a Client Virtualization Straw Poll conducted by CDW, which surveyed 200 IT managers, 91% of the respondents plan to implement some form of client virtualization within the next 12 to 24 months. The primary drivers behind adoption of client virtualization are improved operational efficiency and reduced costs (expected savings were estimated at 20% of the IT budget, according to early adopters).

Related articles:

Storage considerations for VDI implementations

Seven steps to a successful VDI implementation

FalconStor adds VDI support to SAN Accelerator

Related blog post: The Top Ten storage acquisitions of 2010

The Top Ten Storage Acquisitions of 2010

2011-01-02T15:44:00.000-08:00

January 3, 2011 -- I originally posted a Top Ten acquisitions list in September, under the assumption that after the blockbuster HP-3PAR buyout we may have seen the last of the big storage acquisitions for the year. Wrong. The storage industry capped a crazy year of M&A fever with the EMC-Isilon and Dell-Compellent acquisitions. With those additions, I had to knock off from the list a few of the relatively minor acquisitions of the year, including SolarWinds’ acquisition of Tek-Tools and Exar’s buyout of Neterion.
Here's my revised list of the Top 10 storage acquisitions of 2010, in ascending order:

#10: PMC-SIERRA – ADAPTEC

Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing.

PMC-Sierra acquired Adaptec this summer for a mere $34 million.

In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.

PMC-Sierra’s acquisition of Adaptec puts the company in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought primarily on the semiconductor front.

Related articles:
PMC-Sierra to buy Adaptec’s channel storage business
PMC-Sierra ships 6Gbps SAS controllers

#9: NETAPP – BYCAST

The terms of the NetApp-Bycast deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically-dispersed locations into a single pool for storing fixed content data.”

See “NetApp to acquire Bycast for cloud storage software”

NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.

Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.

#8: EMULEX – SERVERENGINES

Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE (and going head-to-head with Ethernet giants Broadcom and Intel, in addition to long-time rival QLogic and others).

The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s strategy. Emulex paid a high price for ServerEngines, but there wasn’t any choice.

According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”

But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”

See “Emulex to acquire ServerEngines”

The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), including Dell, EMC, HDS, HP, IBM and NetApp.

ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.

#7: DELL – OCARINA

Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody, and (along with #6, see below) confirmed that capacity optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.

According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”

I think Dell will initially leverage Ocarina’s technology in image-intensive, fixed-content applications on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will probably continue to resell Symantec, CommVault and Data Domain software where those companies’ technologies make more sense, or where customers demand it.

And in a related Top 10 acquisition . . .

#6: IBM – STORWIZE

This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in a top spot among Hot Storage Technologies.

Rumors put this deal in the range of $140 million.

Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.

It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.

The Storwize product line is now part of the IBM Real-time Compression business unit.

See “IBM to Buy Storwize for Real-Time Data Compression” on InfoStor partner site Enterprise Storage Forum.

#5: VISION SOLUTIONS – DOUBLE-TAKE

This one ranked high on the surprise factor and it also ranked high in dollars, being valued at $242 million.

That amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.

Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, with vendors such as Dell and HP considered to be potential acquirers.

Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.

See “Vision Solutions to acquire Double-Take”

#4: EMC – GREENPLUM

I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list.

Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.

In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum became the foundation of a new division within EMC’s Information Infrastructure business.

Greenplum is a nice fit with EMC’s cloud initiatives, but it also heats up the competition between EMC, Oracle, IBM and Sun.

See “EMC acquires data warehousing vendor Greenplum”

#3: DELL – COMPELLENT

This one may not be a done deal, but it’s pretty close so Dell’s “take-under” acquisition of Compellent takes the #3 spot on our list. The latest offer is $27.75 per share, which translates into about $960 million, or $820 million net of Compellent’s cash.

In a sense, Compellent is a consolation prize after Dell lost the bidding war with HP over 3PAR. Acquiring 3PAR would have solidified Dell’s position in high-end disk arrays, but Compellent fills out Dell’s mid-range (and slightly high-end) positioning.

It will be interesting to see how Dell positions Compellent’s disk arrays relative to the EqualLogic product line (which grew 66% in revenues over the last year), but it will be even more interesting to see what happens to Dell’s EMC reseller agreement.

#2: EMC – ISILON

EMC shelled out around $2.25 billion for scale-out NAS vendor Isilon Systems, net of Isilon’s existing cash balance. That’s an eye-popping amount of cash, particularly considering that Isilon was barely profitable, but market researcher IDC predicts that the scale-out NAS market will grow on average about 36% annually, reaching an estimated $6 billion in 2014.

According to EMC’s press release on the announcement: “EMC’s Atmos and Isilon’s solutions will offer customers a highly scalable, low-cost storage infrastructure for managing ‘Big Data’ . . . EMC Atmos object storage provides the perfect complement to Isilon for massive globally distributed environments and object access to data for usages like Web 2.0 applications.”

EMC officials estimate that the combined revenue from the Isilon and Atmos platforms will hit a $1 billion run rate during the second half of 2012. EMC also emphasized synergies between Isilon’s clustered scale-out NAS platforms and systems/software from Greenplum.

Isilon wasn’t EMC’s only acquisition this year. The company bought Bus-Tech about a week prior to the Isilon announcement. Bus-Tech specializes in VTL technology for mainframe environments. The financial terms of the Bus-Tech acquisition were not disclosed.

See “EMC snaps up Isilon for $2.25 billion” on InfoStor partner site Enterprise Storage Forum.

#1: HP – 3PAR

By virtue of its price ($2.4 billion) and the drama of the bidding war with Dell (which started at $1.15 billion), HP’s acquisition of 3PAR was clearly the #1 storage acquisition of 2010.

The acquisition of 3PAR puts HP in a much better competitive position, but it will be interesting to see what happens to the rest of HP’s disk array lineup. Does the 3PAR acquisition sound the death knell for the venerable EVA line? And what will be the fate of HP’s reseller deal with Hitachi? Months after the acquisition was announced, we still have more questions than answers on this acquisition.

2010 wasn’t a record-setting year in terms of the number of storage acquisitions, but it certainly was a record setter in terms of the amount of money that was shelled out.

As we enter 2011, the big question is: Who will be acquired next? According to the financial analyst community, CommVault is the most likely storage vendor to be acquired, but other possibilities cited by financial analysts include (in no particular order) Xiotech, Brocade, BlueArc, FalconStor and NetApp.

Related article:

Top 10 Storage Predictions for 2011 (by Henry Newman, on Enterprise Storage Forum)

And the Top 6 storage software vendors are . . .

2010-12-21T13:39:00.000-08:00

IDC recently released its Q3 2010 report on the storage software market, and there weren’t any changes on the leader board in terms of the top six vendors’ market shares in Q3 vs. Q2. EMC is still in the top spot with a 24.4% market share on revenue of $768 million in the third quarter.

Pure-play software vendor Symantec held on to its #2 ranking with a 16.5% share on revenue of $518 million, followed by IBM (13.4%) with revenue of $421 million and NetApp (8.4%) with $263 million.

The race is a bit tighter for fifth and sixth place, with CA (3.3%) pulling in $104 million and edging out #6 HP (3.2%, $99 million).

As was the case in the disk array market in the third quarter, the real winner appears to be NetApp, which experienced a growth rate of 19.8% in Q3 2010 vs. Q3 2009. EMC had the second highest growth rate at 13.9%. HP was the only vendor to have negative growth (-9.4%).

The overall storage software market racked up $3.1 billion in revenue, for a growth rate of 8.7% over the same quarter a year ago and a 6.3% boost over the previous quarter, according to Laura DuBois, IDC’s program vice president, storage software.

In terms of storage market segment growth, the top three were storage infrastructure (+37.3% year-over-year), archiving (+12%) and data protection and recovery (+10.7%).

DuBois notes that the big boost in storage infrastructure can be attributed largely to increased spending on automated storage tiering. Other segments of the storage software market include replication, storage management, device management, and file systems.

For more info, see IDC’s press release: “Storage Software Market Continues on Its Growth Trajectory in the Third Quarter”

Related blog post: “Disk arrays: NetApp, HP duke it out for #3 spot”

Broadcom claims 2 million+ IOPS on converged controller

2010-12-17T09:22:00.000-08:00

December 17, 2010 – Broadcom this week announced a 10GbE converged (TCP, iSCSI, FCoE, RDMA) controller that the company claims can exceed two million I/Os per second (IOPS). The BCM578X0 chip family is designed for converged network adapters and LAN-On-Motherboard (LOM) implementations.

“It’s the first quad-port, fully converged 10GbE controller, and it can perform at full line rate on all four ports, or 40Gbps bidirectionally,” claims Robert Lusinsky, director of product marketing in Broadcom’s Ethernet Controller Group.

One caveat: Although Broadcom is currently sampling the chip to OEMs, and claims to have some design wins with Tier-1 vendors, production shipments of the chip aren’t expected until the third quarter of 2011.

Broadcom cites Intel, Emulex and QLogic as its primary competitors in the 10GbE converged networking space. Lusinsky says that Broadcom’s key differentiators vs. some of its competitors are port count, chip size and performance.

To date, the highest performance claims in the converged adapter market have been around one million IOPS.

As always, however, performance claims should be taken with a grain – or large block – of salt, and they depend on a wide variety of factors, including CPU utilization.

For server vendors needing to cram more and more chips on their motherboards, Broadcom points to the size of the BCM5784X0 chip: four ports on a 23mmx23mm (0.82 square inches) device. That compares, for example, to Intel’s dual-port 25mmx25mm 82599 processor.

Broadcom’s converged controllers are available in three configurations: the dual-port BCM57800 and BCM57810, and the four-port BCM57840.

Other features of Broadcom’s 40-nanometer converged controller include support for PCIe 3.0, Energy Efficient Ethernet, and virtualization technologies such as SR-IOV, NIC partitioning and Virtual Embedded Bridge (VEB). The chips provide full hardware offload for iSCSI, FCoE, TCP and RDMA.

For more info, see the company’s press release.

Dell’s Compellent bid approaches $1 billion

2010-12-13T14:15:00.000-08:00

December 13, 2010 – Dell this morning said it has reached a definitive agreement to acquire Compellent for $27.75 per share, or 25 cents more than Dell offered last Thursday. The $27.75 per share offer translates into about $960 million, or $820 million net of Compellent’s cash.
As I mentioned in my earlier post on this saga, the weird thing about it is that Dell’s offer is still significantly below what Compellent had been trading at. Compellent’s stock at one time hit $34 a share. So this is what the financial people call a “take-under.”

In fact, as I write this Compellent’s stock is trading at $27.92, which is still above Dell’s bid price. That would suggest that investors expect the price to go higher, although almost nobody expects a bidding war to ensue at this stage of the game.

Although most of the financial community seems to think that this is a done deal, it’s important to note that Compellent’s shareholders have yet to approve the deal (although both the Dell and Compellent boards have approved the terms of the deal). And it’s likely that lawsuits against Compellent’s board will be filed.

Since this story may not be over yet, it may be premature to speculate on how Dell will position the Compellent line vs. the Dell/EqualLogic line, but I presume that Dell would position Compellent’s arrays “above” the EqualLogic iSCSI arrays and primarily in the Fibre Channel SAN space.

Whatever the positioning between Compellent and EqualLogic, it’s certainly doubtful that the Dell-EMC reseller relation will last the two years left on the agreement (although Dell officials this morning said that they will continue to offer the EMC options).

According to a note by Stifel Nicolaus analyst Aaron C. Rakers: “For its October 2010 quarter, Dell generated storage revenue of $543 million (3.5% of total; ~3.8% if we include Compellent’s most recent results) revenue, which was up only 7% yr/yr (vs. industry growth rate at +19% yr/yr) and down 13% sequentially. Dell had reported that its EqualLogic (iSCSI SAN) revenue grew 66% yr/yr, which leaves us to estimate ~$165 million in revenue (~30% of Dell’s total storage revenue). IDC recently estimated that Dell had a ~9.1% revenue share in the total external disk storage market, which includes the Dell/EMC relationship; Dell having a ~34% estimated revenue share in the fast growing iSCSI SAN market with EqualLogic.”

Related blog post:

Dell closing in on Compellent acquisition (last Thursday)

Musings on the future of data dedupe

2010-12-10T11:36:00.000-08:00

December 10, 2010 – I recently chatted with a few vendors in the data deduplication space. As conversations often do at this time of year, the talk turned toward the future of data deduplication. Here are a few snippets.

“Tier 1 storage vendors will move past point solutions for deduplication next year,” says Tom Cook, CEO at Permabit. “They’re working toward end-to-end deduplication, across SAN, NAS, unified [block and file], nearline and backup.”

“When that happens, once their customers ingest data and get it into a deduplicated state they’ll never have to re-hydrate that data throughout its lifecycle. The data will stay deduplicated through processes such as replication and backup. That’s a huge savings in workflow, footprint and bandwidth,” say Cook.

“Today, the big vendors use a variety of point solutions, but they’d like to use a single data optimization product across all their platforms, whether it’s block or file, primary or secondary. End-to-end deduplication will creep into the market in 2011 and 2012,” Cook predicts. (Permabit sells deduplication software – dubbed Albireo – to OEMs.)

Personally, I don’t think that single-solution, end-to-end deduplication will happen that quickly, in part because of the huge investments that the Tier 1 vendors have made in their “point solutions,” but we’ll see.

Dennis Rolland, director of advanced technology at Sepaton, has some predictions that are similar to Cook’s, as well as some differing opinions regarding trends in the data deduplication market.

“Dedupe will be required in more places going forward, including primary storage in addition to nearline storage, and end users will have to cut down on how many dedupe solutions they have because of the complexity in managing many disparate solutions,” says Rolland, “but we’ll probably still have distinct solutions for primary and nearline storage deduplication.”

Rolland thinks that the emphasis on deduplication benefits such as capacity, footprint and cost savings is shifting. “Dedupe enables low-bandwidth replication, which in turn enables companies to economically deploy DR [disaster recovery] sites,” he says.

Rolland also links two technologies that will no doubt make my list of The Hottest Storage Technologies for 2011 (assuming I get around to making such a list): data deduplication and cloud storage.

“Dedupe is an enabler for cloud storage,” says Rolland. “It makes it practical to deploy cloud storage because you’re sending, say, 10x less data over the WAN. That has significant implications for deploying cloud-based DR.”

(Sepaton bundles data deduplication software with its virtual tape libraries, or VTLs.)

Meanwhile, Quantum released the results of an end-user survey this week that suggests U.S. companies could save $6 billion annually in file restore costs by adopting deduplication.

According to the survey of 300 IT professionals, respondents spend an average of 131 hours annually on file restore activities, with 65% restoring files at least once a week. Based on the average wage for IT professionals in the US ($31.55 per hour according to PayScale.com), that equates to $9.5 billion. However, Quantum’s survey also found that those companies that are most efficient at file restoration predominantly use deduplication and can complete restores in approximately one-third the average time of all respondents. So, according to Quantum’s press release: “If the broader US market was to achieve similar data restore efficiencies, the potential annual savings for US businesses would be approximately $6 billion.”

This survey seems a bit misleading to me because it’s not really focused on the advantages of data deduplication per se in a file restore context but, rather, the advantages of disk-based backup/recovery.

Steve Whitner, Quantum’s product marketing manager for DXi, explains: “If you back up to regular [non-deduplicated] disk and you have a need for DR, you have to get that data to another site and you can’t keep data on conventional disk for very long – maybe a few days or a week. So the real issue is not the speed of restore; it’s the fact that companies can now store a month or two of deduplicated backup data on disk.”

You be the judge. Here’s Quantum’s press release and here are some supporting slides from the survey results.

One thing is clear: In 2011, the focus will shift from deduplication for nearline/secondary storage to deduplication for primary storage. Witness two of this year’s biggest storage acquisitions: Dell buying Ocarina Networks and IBM acquiring Storwize. (Storwize’s technology is now in the IBM Real-time Compression business unit.)

Related blog posts:

What is progressive deduplication?

Data deduplication: Permabit finds success with OEM model

Dell closing in on Compellent acquisition

2010-12-09T09:34:00.000-08:00

December 9, 2010 – Putting to rest weeks of speculation, Dell announced today that it is in “advanced discussions” to buy Compellent for $27.50 per share, or approximately $876 million. The weird thing about this is that the $27.50 offer is about 18% less than Compellent’s closing price yesterday. That’s a rarity in the high-tech acquisition space, and the financial folks refer to it as a “take-under.”

It looks like I will be proved wrong. Although many financial analysts predicted that, after losing the battle with HP for 3PAR, Dell would set its sights on Compellent, I predicted that Dell would turn away from the over-priced storage stocks and make a few acquisitions in non-storage IT sectors.

As I write this, Compellent is trading at $29.37 per share. That would suggest that investors think that (a) a bidding war will ensue and/or (b) negotiations will drive the price up.

I doubt that a bidding war will ensue, mainly because none of the cash-rich storage giants really need Compellent’s technology (although at least one financial analyst predicted that NetApp might jump into the ring). Making a bidding war even less likely: Dell has more than $13 billion in cash, and even though it backed out of the 3PAR bidding there’s no way Compellent will go for much more than $1 billion vs. the $2.4 billion that 3PAR commanded.

Compellent’s stock has almost doubled over the past couple months due to acquisition rumors. And back in August (prior to the start of the 3PAR bidding contest) the stock was trading at about $12 a share.

If this deal goes through, it will be interesting to see how Dell positions Compellent’s products relative to Dell’s (enormously successful) EqualLogic line. There’s certainly a good deal of overlap there. But what will be more interesting is what happens to the Dell-EMC relationship, or lack thereof.

Both Dell and Compellent officials said that there was no assurance that the acquisition deal will be finalized, and they don’t plan to comment further until the deal is either consummated or goes south.

How bad is SSD performance degradation?

2010-12-07T07:23:00.000-08:00

December 7, 2010 -- “It's a fairly well known fact that solid-state disk (SSD) performance can suffer over time. This was quite common in early SSDs, but newer controllers have helped reduce this problem through a variety of techniques. In part one of this two-part look at SSDs, we examine the origins of the performance problems and some potential solutions.”

That’s how Enterprise Storage Forum contributor Jeffrey Layton begins his exhaustive two-part series on SSD performance degradation.

For years (decades, actually), the focus on SSDs was on the exorbitant prices of the devices. Then the attention shifted to reliability, or endurance, issues. But SSD and controller manufacturers made great strides in those areas over the past couple years.

Now, the focus may be turning to performance degradation over time.

Layton’s articles are the best I’ve read on this subject. However, a warning: The articles are very long, very technical, and very detailed. But if you (a) are using, or considering using, SSDs (b) have sufficient technical credentials and (c) have a lot of time, I strongly recommend reading the articles.

Part 1 examines the issues that cause performance degradation in SSDs, and looks at some of the solutions (or “workarounds,” because all SSD solutions seem to involve trade-offs) that vendors have implemented.

Part 2 looks at technologies/issues such as write amplification, over-provisioning and the TRIM command, and then delves into some very in-depth testing of Intel’s X25-E SSD in ‘before’ and ‘after’ stress test scenarios. Check it out on Enterprise Storage Forum:

Fixing SSD Performance Degradation, Part 1

Fixing SSD Performance Degradation, Part 2

Disk arrays: NetApp, HP duke it out for #3 spot

2010-12-03T14:21:00.000-08:00

December 3, 2010 – In more good news for the rebounding storage industry, revenues from external disk systems grew 19% in Q3 2010 vs. Q3 2009, topping the $5 billion mark, according to a report from IDC. Revenues for the total (external and internal) disk systems market grew to almost $7 billion, representing an 18.5% year-over-year growth rate.

Total capacity shipped grew 65.2%.

In the external array market, EMC held on to its #1 spot by a wide margin, with $1.35 billion in Q3 revenue and a 26.1% market share. IBM was a distant second with $667 million in revenue and a 12.9% market share.

But the real race is for the #3 position, where NetApp and HP are in a virtual dead heat. (Even dead heats are virtual these days.) NetApp had an 11.6% market share in Q3, followed closely by HP with an 11.1% slice. IDC considers it to be a statistical tie when less than a one percent revenue difference separates two vendors.

Dell finished fifth, with a 9.1% market share on revenue of $471 million.

All of the top five vendors had healthy, double-digit revenue growth (ranging from 11.3% for HP to 28.3% for EMC), but it was NetApp that busted the charts with a whopping 54.9% growth rate.

Looking at the leader board trends over the past few quarters, it would seem safe to say that NetApp has blown past HP and is closing in on Big Blue, except for HP’s 3PAR acquisition. With HP’s marketing muscle behind the 3PAR product line, revenue could crank up pretty quickly. For now, however, 3PAR had a market share of only 0.83% in the third quarter. (Isilon’s slice was 0.75%.)

Other highlights from the IDC report: The NAS market was the fastest-growing segment of the overall storage systems market, posting 49.8% growth in Q3 2010 vs. Q3 2009. EMC led the NAS market with a 46.6% share, followed by NetApp with a 28.9% share.

The iSCSI segment of the overall market also did well, posting 41.4% revenue growth, with Dell/EqualLogic in the top spot (33.8% share) followed by EMC and HP in a tie for second place.

For more details, read the IDC press release: “External Disk Storage Systems Market Records Fourth-Highest Quarterly Revenue in Third Quarter”

Who says tape is dead?

2010-12-02T13:10:00.000-08:00

December 2, 2010 – People have been predicting the termination of tape almost as long as they’ve been predicting the demise of mainframes. But both technologies keep hanging in there.

In the third quarter, tape media manufacturers pulled in almost $203 million in revenue, which is expected to actually increase slightly in the next quarter to $205 million, according to the Santa Clara Consulting Group (SCCG). And that’s just from tape cartridges; those figures don’t include revenue from tape drives and libraries.

All segments (formats) of the tape market are declining rapidly, with one exception: the LTO format.

LTO tape cartridges accounted for more than 86% ($175 million) of total cartridge shipments in the third quarter, or 6.2 million units, according to SCCG. Sales of LTO-5 (the latest generation, introduced early this year) cartridges were up 100% in Q3 vs. Q2, and accounted for 5% of unit shipments and 15% of revenues. LTO-4 cartridges accounted for 48% of unit shipments and 46% of the total LTO revenues. Even the LTO-3 segment grew in the third quarter (up 3%).

One reason that users stick with tape is that it’s still way cheaper than disk. Those LTO-5 cartridges cost only four cents per GB (assuming 2:1 compression).

According to a study conducted by The Clipper Group research and consulting firm, the cost ratio of storing 1TB of data on SATA disk vs. LTO-4 tape is 23:1. Even if you compare the costs of archiving data on a VTL with data deduplication vs. tape, the cost ratio is 5:1, according to the Clipper Group study.

And for the energy-conscious: Tape is 290X less expensive than disk in terms of energy costs. (The Clipper Group study was conducted two years ago, but with cost reductions in both disk and tape those ratios are probably still accurate.)

Sure, accessing data from tape is painfully slow, but successive generations of LTO have typically doubled the transfer rate. (Exception: LTO-5 only provided a nominal increase in transfer rate vs. LTO-4 – 280MBps vs. 240MBps – but LTO-6 is expected to almost double the transfer rate to 525MBps. That assumes 2.5:1 compression, vs. today’s average compression ratio of 2:1, which will come from the use of larger compression history buffers, according to Bruce Master, an LTO Program representative and senior program manager of tape storage systems at IBM.

And LTO-6 will boost native cartridge capacity to 3.2TB, or 8TB in compressed mode.

The LTO Program vendors (HP, IBM and Quantum) claim that more than 3.3 million LTO tape drives, and more than 150 million LTO cartridges, have been shipped.

In addition to the usual capacity and speed improvements, LTO-5 includes some nifty features such as media partitioning (which enables users to create two partitions on the cartridge, one for content and one for an index) and the Linear Tape File System (which is a free download that leverages dual partitioning and provides file system access at the operating system level).

The LTO Program celebrated its 10th anniversary last month.

VCs score big in EMC-Isilon deal

2010-11-29T08:41:00.000-08:00

November 29, 2010 – Whenever there’s a blockbuster acquisition such as EMC’s $2.25 billion buyout of Isilon, it’s interesting to speculate about what the marriage will mean to customers and competitors. But one angle I never look into is what the acquisition means to the venture capitalists (VCs) behind the acquired company.

According to a blog post on The Wall Street Journal’s wsj.com, the VCs behind Isilon made out quite well (see “EMC-Isilon Deal Is Another Data-Storage Win for VCs”).

According to that article: Atlas Ventures and Madrona Group, which provided Isilon with its Series A funding in 2001, as well as Sequoia Capital, which led the company’s Series B funding, all held significant stakes in Isilon.

Atlas said it will reap $473 million from the EMC-Isilon acquisition, or 20X its initial investment.

Madrona will get more than 15X the $15 million it invested, or $225 million+, according to a Madrona representative.

Sequoia Capital (which apparently did not sell any of its holdings prior to the acquisition announcement), will score $394.4 million.

Isilon was founded almost 10 years ago by Sujal Patel. The company went public in late 2006 at $13 a share. Going public was rocky in the beginning, with shares falling about 50% in the first year. Isilon’s stock price kept sliding through 2008 and 2009, when investors such as Atlas and Madrona added to their holdings.

Under the terms of the agreement announced a couple weeks ago, EMC will pay $33.85 per Isilon share.

Read the full blog post at wsj.com: “EMC-Isilon Deal Is Another Data-Storage Win for VCs”

Brocade boasts record revenues, but . . .

2010-11-23T14:30:00.000-08:00

November 23, 2010 – Brocade set an all-time revenue record in its fiscal fourth quarter, and narrowly exceeded analysts’ expectations, raking in about $550 million. That’s up 9.3% over the previous quarter and up 5.5% year-over-year.

However, the company posted a net profit of $66 million in 4Q10, or 14 cents a share, which is down from $73 million, or 15 cents a share, a year ago. In addition, guidance for the current quarter was, well, cautious. Company executives predicted revenue for the current quarter of $535 million to $550 million, which translates into flat to -3% growth vs. the previous year That guidance was below Street projections. Brocade’s 1Q11 guidance was variously described as “cautious,” “tepid” and “dour.”

In other words, the company’s performance in this quarter was stellar, but the outlook for 1Q11 disappointed. Mixed signals, indeed.

Brocade earned the applause of analysts – and some Buy ratings -- by (narrowly) exceeding their expectations, but investors sent the stock down late Monday, a slide that continued into Tuesday, presumably because of the lackluster projections for the current quarter.

Brocade (NASDAQ: BRCD) shares closed at $5.13 today, down 10%.

Personally, I don’t think Brocade’s guidance on this quarter looks very bad at all, given an expected slowdown or stall in federal spending and Brocade’s challenging competitive position on the Ethernet side of the business against Cisco, HP and others.

Speaking of which, Brocade’s Ethernet-related revenue numbers suggest that the company is picking up steam against those formidable rivals.

4Q10 revenue from Brocade’s Ethernet line was $142.6 million (representing 26% of total revenue.) That’s an increase of 17% vs. the previous quarter. And the company gained about 300 new customers for its Ethernet switch line in the fourth quarter, bringing the total to 1,600 since the acquisition of Foundry.

Brocade’s SAN storage business remained at about 57% of total revenue (vs. 58% in the last quarter), or $316 million. Services accounted for the remainder of the total revenue, or about $92 million.

Gross margin was 62.3%, compared to 54.1% in the previous quarter.

Related articles:

Brocade, HP debut 8Gbps SAN starter bundles

Brocade tackles network convergence, VM mobility

Brocade increases density, throughput of DCX Backbone

NetApp revenue up 33%, earnings up 72%

2010-11-17T15:27:00.000-08:00

November 17, 2010 – Over the past few weeks, analysts have opined that acquisitions such as EMC-Isilon ($2.25 billion) and HP-3PAR ($2.4 billion) spell bad news for NetApp. Maybe, but for now the NetApp juggernaut appears to be more than solid.
The company reported financial results today for its fiscal second quarter, highlighted by quarterly revenues of $1.207 billion. That’s up 33% over the same quarter a year ago. Similarly, NetApp’s revenue for the first six months of this quarter is up 34% vs. the previous year.

Net income was $165 million, or $0.42 per share, which compares to net income of $96 million, or $0.27 a share, a year ago. That’s a 72% increase year-over-year.

And gross margin was a whopping 66.9%, while operating margin was 19.8%.

The brightest spot was the company’s hardware revenues (which NetApp refers to as “product” revenue).

“NetApp produced 49% year over year growth in product revenue and our highest non-GAAP operating margin in over a decade,” said Tom Georgens, NetApp’s president and CEO. Product revenue in the second quarter was $780 million. And none of that came from the products NetApp announced a couple weeks ago as part of a wide-ranging refresh (see “NetApp overhauls product line, from arrays to OS”).

Other product lines were not so impressive. For example, software revenue was $177.9 million, up 5% year over year, and services revenue was $249.5 million, up 16% year over year.

What may raise some eyebrows is that NetApp is sitting on net cash of more than $3 billion, which will surely spark speculation on possible acquisitions that NetApp might make given the current climate of red hot M&A activity in the storage space.

Company officials predict third quarter revenue in the $1.24 billion to $1.29 billion range, which would translate into sequential growth in the 3% to 7% range.

NetApp [NASDAQ: NTAP] shares closed at $49.25 today, down 6.5%. The company’s 52-week trading range is $28.92 to $57.96.

Trading on the company’s stock was halted this afternoon due to a leak of the earnings report prior to NetApp’s official conference. Shares plunged, apparently because investors were not pleased with the Q3 earnings estimates.

Related blog post: “NetApp hits a home run in Q1”
Related article: "NetApp overhauls product line, from arrays to OS"

Also today, scale-out NAS specialist (and NetApp competitor) BlueArc reported record third quarter revenues and a 100% quarter-over-quarter growth in channel revenues. More details were not available in time for this post. (BlueArc is a private company.)

SSDs hit mainstream stride

2010-11-17T10:44:00.000-08:00

November 17, 2010 – You know a storage technology is hot when there are four significant (well, at least interesting) announcements related to that technology in a single day. Such was the case yesterday with announcements related to solid-state disk (SSD) drives from Hitachi GST (in partnership with Intel), LSI, Violin Memory, Anobit and Intel.

Hitachi Global Storage Technologies (GST) claims to be the first hard disk drive (HDD) vendor to ship both SAS and Fibre Channel “enterprise-class” SSDs, albeit in only limited quantities to OEMs, with production shipments ramping over the first half of next year.

See “Hitachi GST enters SSD market.”

LSI announced a PCIe accelerator card based on SSD technology this week, with shipments slated for the end of the month. With 4KB block sizes, LSI claims performance of 240,000 IOPS on sequential reads and 200,000 IOPS on random reads. At an MSRP of $11,500, LSI’s 300GB WarpDrive SPL-300 card isn’t cheap but the company has some cool technology that integrators can bundle, including MegaRAID CacheCade and FastPath software.

See “LSI ships SSD-based accelerator card.”

Violin Memory introduced cache appliances based on flash and DRAM memory that significantly boost the performance of NFS-based NAS systems. The secret sauce in the NFS caching software comes from Violin’s acquisition of Gear6 earlier this year.

See “Violin’s cache appliances accelerate NFS NAS.”

Also yesterday, Anobit announced that it had received $32 million in a funding round led by Intel Capital, Intel’s equity investment unit. That brought the total funding behind Anobit to more than $70 million. Anobit specializes in NAND flash memory and Memory Signal Processing technology.

It’s not surprising that so many vendors are trying to get a piece of the SSD market. Market researcher IDC predicts that the total SSD market will grow at a 58% CAGR in unit shipments and a 44% CAGR in revenues over the next few years.

However, the fastest growing segment of the overall market is enterprise SSDs, where unit shipment are expected to surge at a CAGR of 74%, and revenues are expected to grow at a 54% clip, through 2014.

IDC expects the total SSD market to exceed $7 billion in 2014.

Related article: “Vendor group develops standards for PCIe SSDs”

EMC’s $2.25 billion bid for Isilon exceeds expectations

2010-11-15T10:59:00.000-08:00

November 15, 2010 – I was wrong. When I blogged about EMC possibly acquiring Isilon late last week, I guessed that EMC would indeed buy the scale-out NAS vendor but at a price considerably less than the rumored $2 billion. In fact, EMC’s bid came in at $2.25 billion today – which is surprisingly close to HP’s $2.4 billion buyout of 3PAR.

Some observers have speculated that the $2.25 billion suggests that there were other suitors involved. I don’t think so. I think EMC wanted to seal the deal without a bidding war, and $2.25 billion should do the trick.

EMC’s positioning of the deal was interesting. Predictably, the words “big data” and “cloud” came up a lot in EMC officials’ explanation of the deal, but so did the synergies between Isilon’s platforms and EMC’s Atmos platform.

According to EMC’s press release on the announcement: “EMC’s Atmos and Isilon’s solutions will offer customers a highly scalable, low-cost storage infrastructure for managing ‘Big Data.’ . . . EMC Atmos object storage provides the perfect complement to Isilon for massive globally distributed environments and object access to data for usages like Web 2.0 applications.”

EMC went on to estimate that the combined revenue from the Isilon and Atmos platforms will hit a $1 billion run rate during the second half of 2012.

EMC also emphasized synergies between Isilon’s clustered scale-out NAS platforms and systems/software from Greenplum, which EMC acquired earlier this year.

In short, all of these acquisitions are complementary, not internally competitive. Nice positioning, and in fact it’s true. It’s rare that a vendor can make acquisitions of these sizes without having to shake up its existing product lineup (which is what HP will have to do as it folds 3PAR’s systems into HP’s venerable disk array lineup).

Not surprisingly, the EMC-Isilon announcement sparked more acquisition rumors, but now vendors that play in Isilon’s ballpark are getting some attention, including BlueArc (to be acquired by long-time partner Hitachi Data Systems?) and Panasas, which is moving into more commercial markets (see “Panasas Pushes Scale-Out Storage Performance Envelope” on Enterprise Storage Forum).

If $2.25 billion seems like a high price to pay for a barely profitable Isilon, consider the fact that IDC predicts that the market for scale-out NAS will grow on average 36% per year, reaching $6 billion by 2014.

Related articles:

EMC snaps up Isilon for $2.25 billion (Enterprise Storage Forum)

Isilon revenue up 77% (InfoStor blog post)

NetApp overhauls product line, from arrays to OS (InfoStor news story)

Isilon stock volatility stabilizes, but acquisition speculation stays

2010-11-11T17:04:00.000-08:00

November 11, 2010 – The bidding war between HP and Dell that ended in HP’s $2.4 billion buyout of 3PAR has sent a number of storage vendors’ stock prices skyward. One good example was Isilon.

Fueled by a combination of acquisition rumors and a stellar quarterly financial report (see “Isilon revenue up 77%”), Isilon’s shares hit an all-time high of $29.48 late last month. The 52-week trading range: a shocking $5.32 to $29.48.

More recently, shares of Isilon (NASDAQ: ISLN) seem to have stabilized, closing at about $26 today.

EMC was reportedly in deep and exclusive talks with Isilon regarding a buyout, with the New York Post reporting that deal was in the $2 billion neighborhood (where 3PAR lived). More recently, various reports said that the EMC-Isilon talks were either dead (because of the pricey neighborhood) or stalled. I’d bet on the latter.

Realistically, I don’t think that (the barely profitable) Isilon can get $2 billion+ from anybody. So I’d still say that EMC is the most likely acquirer.

However, assuming that EMC is out of the bidding, financial analysts cite the usual suspects as possible bidders: Dell, NetApp, HP, IBM and Oracle – usually in that order. However, a bidding war a la HP vs. Dell for 3PAR will be highly unlikely this time around, in part (as I’ve said before) Isilon’s technology is great but it’s a product line gap plugger rather than the game changer that 3PAR would have been for Dell and could be for HP.

Financial analysts such as Morningstar’s Mike Holt, on thestar.com, cite Dell as the most likely candidate to snap up Isilon. However, rather than take what would be sort of a consolation prize after losing its bid for 3PAR, I’m guessing that Dell heads in a different (non-storage) direction in its acquisitions. And besides, Dell has the Exanet technology.

Isilon’s clustered scale-out NAS technology would fit nicely into NetApp’s lineup, but NetApp has shed a lot of blood, sweat, tears and money integrating the Spinnaker technology, and acquiring Isilon would be a lot of expensive crow to eat.

With Isilon’s hiring of Qatalyst Partners (which shepherded the 3PAR bidding), it seems quite likely that Isilon will be acquired. Then again, given the company’s traction and recent earnings report, the Isilon could very well go it alone.

Related blog post: “Isilon revenue up 77%”

Intel’s card play in unified networking (10GbE+iSCSI+FCoE)

2010-11-04T08:58:00.000-07:00

November 3, 2010 – InfoStor has been covering converged, or unified, networks and the Fibre Channel over Ethernet (FcoE) protocol for years, but most of our product-oriented coverage has been centered on adapters from vendors such as Emulex and QLogic. Those vendors are clearly out in front in this space, both from a time-to-market and market share perspective, but there are other vendors with host adapters for converged networks, and we’ve been remiss in not covering a little player called Intel.
First, a note on terminology: Vendors such as QLogic and Emulex use the term converged network adapter (CNA) to describe cards that support protocols such as 10GbE, Data Center Bridging (DCB), iSCSI and FCoE. Other vendors, such as Broadcom, are expected to use the term Converged Network Interface Card, or C-NIC.

Intel doesn’t use either of those terms, referring to the technology in general as “unified networking” or just referring to its Ethernet X520 Server Adapter card.

Intel’s approach to unified network cards is architecturally different from the CNA approach taken by vendors such as Emulex and QLogic. With CNAs, protocols (and protocol offload functionality) are implemented on the CNA, which architecturally is similar to a host bus adapter (HBA).

In contrast, Intel uses native initiators for FCoE and iSCSI that are implemented in the host operating system (Windows and Linux) kernel. Thus Intel’s use of the term “open FCoE.”

“We rely on native protocols in the OS kernel, so it’s free and easy to implement and use,” says Sunil Ahluwalia, senior manager of product marketing in Intel’s LAN Access Division. “CNAs are special-purpose adapters that are more complex and costly.”

Intel’s Ethernet X520 Server Adapter has an MSRP of $799 (and often sells for considerably less), which is about half the price of CNAs.

Rather than implementing hardware-based full offload of the storage-over-Ethernet protocols, Intel offloads only the data path part of the protocol.

“We have what we call ‘intelligent offload,’” says Ahluwalia. “We don’t offload the full protocol because we don’t think that’s required, and full offload adds complexity and cost to the cards because you need processing engines, memory, etc. on the card, which also adds power requirements.”

Performance

CNA vendors have historically claimed that the native initiator approach (a) lacked full support for protocols such as FCoE (which is no longer the case) and (b) had relatively poor performance.

Intel begs to differ. However, it’s important to note that all vendors in this space can point to internal or third-party testing that shows superior performance for their products. As always, benchmark results should be taken with a grain of salt.

“Intel and Microsoft demonstrated one million IOPS with native iSCSI earlier this year, but the question was: Who needs that level of performance in real-life applications?,” says Ahluwalia, “so we performed some tests [with Demartek] running applications such as Exchange and SQL and we found little difference in performance between a CNA and an initiator approach.”

For full info on the testing procedures and results, see Demartek’s “Intel 10GbE Adapter Performance Evaluation for FCoE and iSCSI.” (Demartek’s site has a lot of other interesting FCoE-related content).

“We found that the performance of the Intel X520 adapter was comparable to competitive 10Gb FCoE adapters for a broad spectrum of tests,” said Dennis Martin, Demartek’s president. “Because the adapter performance was reasonably close in most of these tests, IT professionals need to consider the cost of these adapters, especially in environments where many adapters are required.”

Intel’s Ahluwalia also claims that the native initiator approach does not consume a lot of CPU cycles (another criticism of this approach).

To take one example from the Demartek tests: In a Microsoft Exchange Jetstress benchmark with 5,000 mailboxes, Intel’s card/initiator consumed only about 2% CPU utilization.

But you really have to take a close look at the Demartek tests, as well as testing of CNAs conducted by other vendors and third parties, to get to the bottom of the performance claims in the unified, or converged, network adapter market.

Related article: QLogic announces 10GbE NICs, CNAs

CommVault reports solid second quarter

2010-11-02T11:19:00.000-07:00

November 2, 2010 – With virtually all storage vendors racking up impressive revenue numbers over the last couple quarters, it’s no surprise that CommVault turned in solid performance figures for its fiscal second quarter today. In fact, the company achieved record revenue of $75.2 million, an increase of 13% over the same period a year ago, and also up 13% over the previous quarter.
Breaking those numbers down a bit, software revenue was $35.8 million, up 7% year-over-year and 26% sequentially. Services revenue was $39.5 million, up 19% year-over-year and 13% over the prior quarter. Income from operations was $9.2 million. That compares to $6.5 million in the same quarter last year.

CommVault executives highlighted a number of recent parternships that could fuel growth, including a distribution agreement with Hitachi Ltd. subsidiary Hitachi Computer Peripherals, as well as a partnership with Mezeo Software that will integrate CommVault’s Simpana software with the Mezeo Cloud Storage Platform.

But the big highlight in the quarter was CommVault’s launch of the long-anticipated Simpana 9 software, which included significant enhancements for data protection in virtual server environments, as well as source-based (in addition to target-based) deduplication and integrated array-based snapshots (see “CommVault unveils Simpana 9”).

Even though it was only introduced on October 5, Simpana 9 accounted for 13% of CommVault’s software license revenue in its second quarter, according to Stifel Nicolaus analyst Aaron C. Rakers.

Rakers also reported that the number of >$100,000 deals in CommVault’s Q2 were up 17% year-over-year and 45% sequentially, indicating that CommVault is well-positioned at the high end of the market vs. chief rival Symantec.

(Rakers maintained his hold rating on CommVault’s shares [NSDQ: CVLT], which were trading around $29 today.)

Related blog post: “Who will be acquired next? And the Top 10 are . . .”

Guest blogger: DCIG's Jerome Wendt on The Future of RAID

2010-11-01T15:01:00.000-07:00

November 1, 2010 -- There was a sizable uptick last month in the readership of a blog entry that appeared nearly two years ago on DCIG's website on the topic of data loss on SATA storage systems. While this blog entry received a fair amount of interest when it was first published, exactly what prompted a resurgence of interest in this topic last month is unclear.

Maybe it's just an anomaly driven by the whimsical interests of Internet users who are for whatever reason searching on this topic.
However, it may be a more ominous indication that SATA disk drives are wearing out and that the traditional RAID technologies used to protect them are failing. As a result, users are looking for information as to why RAID, in some circumstances, is not doing the job in their environments.

The death of RAID (or at least RAID 5) has previously been forecast by some analysts. But even now, when I look at the features of new storage arrays, the number of RAID options that they support is always prominently mentioned.

A good example is Overland Storage's recent introduction of the SnapSAN S1000. It offers at least 10 different ways that RAID can be configured (including RAID 5) on a storage array that starts at less than $10,000, so it's clear that RAID is not dead or even on its last legs.
But there is no disputing that capacities of SATA disk drives will cross the 4TB, 8TB, 16TB and 32TB thresholds over the next decade. As that occurs, it becomes questionable whether current RAID technologies will be able to protect disk drives of these sizes. If the increased interest in DCIG's 2008 blog entry (see "Data Loss on SATA-based Storage Systems -- Coming Soon to Your Company?") is any indication, the answer would apprear to be 'no.'

Am I predicting the death of RAID? Clearly not. RAID technology is as much a part of the storage landscape as tape, and odds are that innovation will continue to occur in RAID to make it a relevant technology for the foreseeable future.

Yet it was clear from speaking to a few users and storage providers at Storage Networking World (SNW) last month that new approaches to protecting data stored on larger capacity SATA disk drives are going to be needed.
One specific company that I met with at SNW was Amplidata, which is already innovating in this space to overcome two of the better known limitations of RAID, including:

•The increasing length of time required to rebuild larger capacity drives. Rebuild times for 2TB drives are already known to take four hours or longer to complete, and in some cases -- depending on how busy the storage system is -- it can take days for a rebuild.
•The need to keep all disks in a RAID group spinning so no power savings can be realized. Spin down is likely to become more important in the years to come as more data is archived to disk, with it likely becoming a function of the storage array to intelligently manage and place the archived data on these drives -- as opposed to the software -- to facilitate the spin down of drives.

Amplidata's AmpliStor distributes and stores data redundantly across a large number of disks. The algorithm that AmpliStor uses first puts the data into an object and then stores the data across multiple disks in the AmpliStor system. By storing the data as an object, Amplidata can reconstruct the original data from any of the disks on which the data within the object resides.

This technique eliminates growing concerns about the rebuild times associated with large disk drives since the original data can be retrieved and reconstructed even if one, two or even more disks fail. Also, should disk drives in the system be spun down to save energy, they do not need to be spun up to retrieve needed data since the data can be retrieved and reconstructed from other spinning disks in the system.

While it is unlikely that AmpliStor or its underlying technology will be widely adopted in the next few years, the simple fact is that increasing capacities of disk drives will eventually make technologies such as AmpliStor a prerequisite in almost any high-capacity enterprise storage system.

So in the same way that enterprise storage vendors started to adopt RAID 6 about five years ago to prevent the loss of data should two SATA drives fail, look for some variation of Amplidata's AmpliStor to find its way into enterprise storage systems over the next decade to prevent the loss of data on these ever larger disk drives. At the same time, expect RAID to find a new home on smaller storage arrays where the level of protection and speed of recovery that RAID currently provides is more than adequate.
This post originally appeared on the DCIG site (see "RAID is Certainly not Dead But its Future Looks Small").

Compellent shares pop on performance, speculation

2010-10-27T16:26:00.000-07:00

October 27, 2010 -- Compellent's stock skyrocketed today due to stellar Q3 performance and continued rumors that the company may be acquired.

Compellent announced record revenue of $42.1 million, a 31% boost over Q3 2009 revenue. GAAP net income was $3.3 million (or 10 cents a share). Gross margin was 55.9%. And the company gained 179 new customers in the quarter, bringing its total to 2, 303.

Investors jacked up Compellent's stock price by more than 32%. The shares closed at slightly over $26 in after-hours trading -- an all-time high. And that's on top of about a 10% gain on Tuesday after Reuters reported that Compellent was actively seeking suitors and had held talks with Qatalyst Partners, among others. (Qatalyst, as you may recall, shepherded the $2.4 billion buyout of 3PAR by HP, and was also involved with Data Domain when they were acquired by EMC. Isilon also recently engaged with Qatalyst, according to various reports.)

ok, so Compellent's share price run-up was obviously based on a combination of the acquisition rumors and the company's Q3 performance.

On the acquisition front, most financial analysts and speculators (as though there was a difference) still think that Dell is the most likely acquirer of Compellent. I don't think so, if only because at the price Dell would have to pay for Compellent I don't see how they would reconcile the product line with the EqualLogic line.

However, if Compellent is not bought . . . as the company's tag line says: "The future is fluid," and that may apply more to the company's stock price than to Fluid Data.

Because of my skepticism about a Dell takeover of Compellent, I maintain my #3 ranking for Compellent in my List of the Most Likely Storage Acquisitions (see "Who will be acquired next? And the Top 10 are . . .").

Related blog post: "Isilon revenue up 77%"

Hybrid (flash + HDD) drives make a comeback

2010-10-26T16:37:00.000-07:00

October 27, 2010 -- Hybrid drives, which combine NAND flash memory with traditional hard disk drives (HDDs), were first introduced about four years ago. Reception was lukewarm. More accurately, those early implementations failed.

The biggest problem was that the early models didn't have onboard data management for the flash component, according to Jim Handy, director of the Objective Analysis research and consulting firm; instead, they relied on data management embedded in Microsoft's Vista. It didn't work well.

In their more recent hybrid drives, manufacturers are integrating the data management functionality. And to boost performance, they're putting in much larger caches compared to the early hybrid drives.

So far, Seagate is the only HDD manufacturer shipping hybrid drives -- the Momentus XT, which was introduced in May -- but the other drive manufacturers are expected to follow soon.

In a just-released report on the market ("Are Hybrid Drives Finally Coming of Age?"), Objective Analysis predicts that shipments will go from about one million units this year (if Seagate is successful), which represents about $120 million in revenue, to 600 million units by 2016, representing revenue of $34 billion.

Hybrid drives are typically associated with PCs, but Handy says that they can be used anywhere HDDs are used today, including enterprise-class disk arrays.

What's driving renewed demand for hybrid drives? "Hybrids provide near-SSD functionality with HDD capacity and price," says Handy.

Can anything stop the expected rapid growth of hybrid drives? "Only if people believe Steve Jobs' recent statement that hard drives are dead," says Handy.

For more information on Objective Analysis' report, see "Are Hybrid Drives Finally Coming of Age?"

(Note: The report is targeted at manufacturers, and is priced at $5,000 for a single copy and $10,000 for a site license.)

Isilon revenue up 77%

2010-10-22T09:46:00.000-07:00

October 22, 2010 -- Amid rumors that the company may be acquired (by EMC, in the ballpark of $2 billion), Isilon reported third quarter earnings yesterday. Revenue was up a whopping 77% vs. Q3 2009 -- $53.8 million vs. $30.5 million -- and up 19% vs. the previous quarter. Net income for the third quarter was $4 billion, which was 2x net income of $2 million in the previous quarter. That compares to a loss of $4.9 million in the same quarter a year ago.

But what really caught my eye was Isilon's gross margin of 63.5% in the third quarter, which set an all-time record for the company.

Isilon's revenue performance, coupled with the acquisition rumors, is why the company recently vaulted to the #1 position in my list of potential acquisition candidates (see "Who will be acquired next? And the Top 10 are . . .").

Isilon's shares (NSDQ: ISLN) are trading at $29.21 as I write this. That's up 115% over the last three months, and up 330% over the last year. That run-up is in part due to the mania surrounding HP's $2.4 billion buyout of 3PAR, but it's also due to just plain performance.

In the third quarter, Isilon earned $0.09 per share. That compares to analysts' estimates of $0.05 per share.

The company's market value is hovering around $1.8 billion, justifying the speculation that EMC may be willing to pay around $2 billion for Isilon.

In its earnings call yesterday, company execs raised their fiscal year revenue growth estimates to almost 60%, compared to their previous estimates of about 40%.

Isilon claims more than 1,400 customers, including heavyweights such as NBC, Eastman Kodak and MySpace. Approximately 37% of Isilon's revenue comes from the media/entertainment market, 16% from life sciences, and 11% from the Web/Internet vertical market.

Isilon is known primarily for its strengths in scale-out NAS, but the company recently added support for the iSCSI SAN protocol in its OneFS operating system, enabling both file (NAS) and block (SAN) I/O under a single file system and volume (although Isilon's storage systems do not support the Fibre Channel or FCoE protocols).

We'll keep an eye on those acquisition rumors, but even without the sales and marketing clout of a larger vendor Isilon seems assured of ongoing success.

Related article: "Isilon puts multiple tiers under one file system"

What is progressive deduplication?

2010-10-19T07:07:00.000-07:00

October 19, 2010 -- Arkeia Software is putting the final touches on the 9.0 release of its Arkeia Network Backup software, which the company plans to deliver in the first quarter of next year, possibly by mid-January. We'll cover that release in more detail as the company gets closer to shipping, but for now . . .

The key addition to the 9.0 release is a technology that Arkeia now refers to as "progressive deduplication," which was previously called "sliding window with progressive matching deduplication."

You'd have to be a math wiz to understand this technology from an algorithmic perspective, but here are the basics, culled from a recent conversation with Arkeia CEO Bill Evans:

Progressive deduplication is an alternative to the older fixed-block deduplication and the newer, more common variable-block deduplication.

Arkeia's data deduplication implementation is global (vs. local), byte-level (vs. file-level), source-side (vs. target-side, although it supports both approaches as well as a mix), in-line (vs. post-processing), and content-aware. But the real differentiator is in how the software handles block sizes.

As with variable-block deduplication, the block size can be adjusted for optimal deduplication ratios, but Arkeia claims a "better" implementation that is more content-aware (or application-aware) than existing approaches. Arkeia Network Backup 9.0 software automatically adjusts block sizes based on file type in order to maximize dedupe ratios.

Arkeia acquired the data dedupe technology when it bought Kadena Systems about a year ago.

Arkeia claims two key advantages of progressive dedupe vs. traditional variable-block dedupe: It's faster (which reduces the size of backup windows) and it delivers higher deduplication ratios (which reduces storage capacity and network bandwidth requirements).

The company isn't ready to make specific performance or dedupe ratio claims, but CEO Evans reports that in internal tests using VMDK files the company achieved a 38% improvement in dedupe ratios compared to "one of the leading deduplication vendors" (which I assume to be either Data Domain or Quantum).

"We think we'll have better dedupe ratios than any other vendor," says Evans.

The proof will be in the pudding. Until we get some independent benchmark results, we'll have to take these claims with a grain of salt, but progressive deduplication appears to be an interesting technology that could take deduplication to a new level.

The Arkeia Deduplication Option will be priced at $2,000 per media, server, but will be free for companies that license Arkeia's software or appliances (physical or virtual) by December 31.

To participate in the beta program for Arkeia Network Backup 9.0 and the progressive deduplication technology, click here.

Next month, Arkeia will release a deduplication profiling tool that will enable users to measure actual deduplication ratios at various block sizes to determine the optimal block size for each file type.

Related articles:
Arkeia integrates backup with VMware vStorage
Arkeia acquires Kadena for data dedupe

VM6: You don't need a (physical) SAN for virtual servers

2010-10-14T18:04:00.000-07:00

October 15, 2010 -- To simplify the storage equation in Hyper-V virtual server environments, and to decrease costs, VM6 Software is shipping a suite of modules that, among other things, allows end users to leverage direct-attached storage (DAS) and eliminate the need for a physical SAN.

To understand where these folks are coming from, a little history: The company started out about six years ago as VM6 Inc., a systems integration and services provider specializing in VMware virtualization. According to COO and co-founder Eric Courville, the company started encountering a lot of remote sites that didn't have expertise in virtual servers, much less complex SANs. In addition, those sites found it difficult to justify the costs associated with VMware and SANs.

VM6 delivered its first software product -- VMex 1.0 -- about five years ago, but it was based on VMware and required a shared-storage physical SAN.

Given the requirements of remote sites and SMBs, VM6 went back to the well and introduced in September 2009 Version 2.0 of VMex, with two key changes: The software now leveraged Microsoft's Hyper-V, instead of VMware, and VMex 2.0 eliminated the need for a physical SAN.

Courville claims that VMex now provides all of the storage functionality users would expect from an iSCSI SAN, including high availability, but the software leverages DAS and eliminates the need for expensive SAN components such as switches.

VMex sits below Hyper-V and on top of Windows 2008 R2. Connections between servers provide high availability via heartbeats and failover. VMex also includes block-level replication across connected servers.

In addition to the Virtual Shared Storage (V-SAN) module, the VMex suite includes Advanced Clustering for high availability, support for Virtual Desktop Infrastructure (VDI), and virtualization management and monitoring tools. The latest version is VMex 2.1.

The company is targeting companies with less than 50 servers.

If you're looking for inexpensive, SAN-free virtualization, it might be worth checking out VM6.

IBM: Goodbye Storwize, Hello Storwize

2010-10-07T11:09:00.000-07:00

October 7, 2010 -- IBM made a slew of storage announcements in NYC today. At first glance, it looks like some winners on the disk array front, but there's one part of the announcements that may cause some confusion.

But first, let's take a step back. IBM recently acquired Storwize, which specialized in real-time data compression for primary storage. Big Blue has apparently scuttled the Storwize name as it applies to that company's products. The products now fall into the IBM Real-time Compression (note the url on that page) operation, and the products are generally referred to as IBM Real-time Compression Appliances for NAS, although IBM seems to be keeping the specific model names; e.g., the STN 6500 (up to 16 Gigabit Ethernet connections) and STN 6800 (up to eight 10GbE connections).

However, headlining today's product blitz was the IBM Storwize V7000 array which, at least for now, apparently does not have any of the technology associated with the products from the former Storwize company.

I thought I was missing something, so I checked in with Greg Schulz at The Server and StorageIO Group (formerly StorageIO), who was also confused on IBM's re-purposing of the Storwize moniker. Here's what Greg had to say:

"If IBM was trying to make a cloud storage announcement, they may have succeeded in creating a layer of fog around the renaming of the data footprint reduction (dfr) company formerly known as Storwize to Real-time Compression.

"That may be straightforward, but what's confusing, or foggy, is the use or recycling of the Storwize brand name, which was gaining ground and awareness around real-time compression for primary storage, to name an SVC-based storage virtualization system. Are they trying to say that using the V7000 is storage wise, or smart? Are they trying to differentiate from SVC, or storage virtualization, or virtual storage? Or trying to ride the growing awareness around the Storwize brand name?"

As mentioned, the confusing part is that the Storwize V7000 does not have Storwize's (the company) real-time compression technology, at least not yet.

The IBM Storwize V7000 is a mid-range storage system that incorporates elements of IBM's SAN Volume Controller (SVC), as well as Big Blue's Easy Tier technology and the XIV interface. (IBM claims that Easy Tier provides a performance improvement of up to 300% via automatic migration to solid-state disk drives, and the SVC functionality enables users to virtualize existing storage resources.) The Storwize V7000 also includes IBM technologies such as FlashCopy, Systems Director and thin provisioning.

Hardware specs of the 2U array include up to 24 2.5-inch drive bays or 12 3.5-inch drive bays, up to 24TB of capacity using 2TB SAS drives or 14TB using 600GB SAS drives, eight Fibre Channel host ports and four 1Gbps iSCSI host ports, and a RAID controller that supports up to nine storage expansion units.

In his blog post (which is a good one) on the Storwize V7000, IBM employee and SVC specialist Barry White says that the V7000 integrates:

"Something old (SVC)
Something new (the controller and enclosure)
Something borrowed (DS8000 RAID)
But it's ALL BLUE!"

For another good blog on the Storwize V7000, check out this Storage Buddhist post.

Shipments of the Storwize V7000 are slated for mid-November.

Particularly if you're an SVC fan, the V7000 may be a very cool product -- and it is Blue through and through -- but I'm still scratching my head over the Storwize branding.

"They seem to like the name Storwize so much that they've elevated it," says the Taneja Group's Arun Taneja. "The V7000 is the first in a series of products that could replace IBM's entire mid-range arrays. This is a very strategic product, but the question is: How high can it scale?"

Also at the event in NYC today, IBM introduced the high-end System Storage DS8800 array, which IBM claims is 40% faster than the DS8700. As are its high-end competitors, IBM has moved away from 3.5-inch disk drives, going only with 2.5-inch, 6Gbps SAS drives on the DS8800, which can be configured with up to 1,056 drives for a total capacity of 634TB. The array can also be configured with SSD drives, and support for Easy Tier is expected next year.

Who will be acquired next? And the Top 10 are . . .

2010-10-04T08:24:00.000-07:00

UPDATED October 21, 2010 -- Following HP's $2.4 billion acquisition of 3PAR, speculation continues to run rampant over which storage vendors will be acquired next. Whether it's a good thing or a bad thing from the perspective of end users, further contraction in the industry is inevitable as the largest IT vendors attempt to control the entire IT stack and the pure-play storage vendors plug the gaps in their product lines in order to goose revenue growth.

For the following list of the Top 10 storage acquisition candidates, I factored in the opinions of InfoStor.com readers, which I received after posting "The Top 10 storage acquisitions of 2010." Interestingly, the majority of the reader responses came from channel professionals -- VARs and integrators -- leading me to believe that channel pros are much more interested in mergers and acquisitions than are end users. I also factored in opinions from industry and financial analysts. And topped it off with my own misguided opinions.

(Note: The ticker symbol links below take you to that company's entry page on the InfoStor Market Index, which provides up-to-the-minute info on the company's stock as well as company- and competitor-related news.)

#1 -- Isilon

Isilon scooted to the top of this list because of two recent developments: (a) The company hired Qatalyst Partners to solicit potential acquisition offers. Qatalyst was the advisor to Data Domain when EMC acquired Data Domain, and Qatalyst also shepherded the HP-3PAR acquisition. (b) The NY Post reported on Friday that EMC may be close to acquiring Isilon for about $2 billion (see "EMC in exclusive talks to buy Isilon").

Isilon is known primarily for its strengths in scale-out NAS, but the company recently added support for the iSCSI SAN protocol in its OneFS operating system, enabling both file (NAS) and block (SAN) I/O under a single file system (although Isilon's storage systems do not support the Fibre Channel or FCoE protocols).

In addition to EMC, financial analysts have cited Dell, HP and IBM (and, less likely, Oracle or Cisco) as potential acquirers of Isilon (NSDQ: ISLN).

#2 -- CommVault

I don't understand why CommVault's (NSDQ: CLVT) stock jumped so high during the HP-Dell-3PAR bidding war, but it did. I guess it was because CommVault has been an acquisition speculation darling for years.

CommVault has done a great job stealing revenue from the big four vendors in the data protection space, in part because CommVault's underlying architecture is newer and designed better for rapid enhancements, as evidenced in the recent release of its Simpana 9 software (see "CommVault unveils Simpana 9").

Conventional wisdom on Wall Street has Dell (NSDQ: DELL) as the most likely suitor under the assumption that none of the leading backup/recovery vendors (EMC, Symantec, IBM, CA) would be interested in CommVault, but I'm not so sure about that. Any of those vendors would have to eat some crow if they acquired CommVault, but they might be better positioned for the long haul.

Another possible CommVault suitor: NetApp which, by the way, is the #4 storage software vendor -- ahead of CA and HP (see "The Top 6 storage software vendors").

In addition to the fact that many financial analysts put the company at the top of their storage acquisition target lists, CommVault earns the #2 spot on this list because I think the storage M&A focus is going to shift from hardware to software. And with CommVault, it's hard to argue with low debt, high growth and high margins.

#3, #4 -- Compellent, Xiotech

Isilon, Compellent and Xiotech have all been cited often as potential Dell acquisitions post-3PAR/HP. I doubt it, because Isilon/Compellent/Xiotech are gap pluggers rather than the game changer that 3PAR would have been for Dell. Isilon, Compellent or Xiotech don't give Dell the high-end array technology that would enable Dell to go up against EMC/IBM/Hitachi, although they would be good complements to Dell's EqualLogic line. On the other hand, any one of these disk array vendors would help Dell doff its "Dude, you're getting a Dell" image.

Given their technology differentiators, and the difficulty of being a relatively small player in the contracting disk array market, it's likely that one or both of these vendors will be acquired by someone.

Xiotech, which is not publicly traded and has a nice differentiator with its Intelligent Storage Element (ISE) technology, would be the least expensive buy in this category.

The question with Compellent is whether the company has enough differentiation from what the potential acquirers already have in their portfolios.

#5 -- Permabit

Earlier this year, Permabit introduced an "OEM embeddable" version of its data deduplication software. dubbed Albierio. The company seems to be off to a good start with its OEM strategy, having already racked up reseller deals with BlueArc and Xiotech (see "Data deduplication: Permabit finds success with OEM model").

As the last standing "independent" data deduplication player, Permabit could thrive with its OEM model, but in light of the IBM-Storwize and Dell-Ocarina acquisitions in the data reduction space I think Permabit is an attractive acquisition candidate. The company's focus now is on deduplication for primary storage, but there's no reason Permabit's technology couldn't be used across all storage tiers -- and that could be very attractive for some of the larger storage vendors that have a diverse mix of data reduction solutions in their portfolios. Of course, that assumes that a "one size fits all" approach to data reduction is the way the larger vendors want to go in this space.

#6 - Brocade

IBM has been mentioned most frequently as a potential suitor for Brocade. That might have changed recently with Big Blue's announcement that it plans to acquire Blade Network Technologies (BNT), making it less likely that IBM would go for Brocade.

BNT specializes in blade and rack Ethernet switches, so it's not an overlap with Brocade's business, but the IBM-BNT acquisition will still dampen speculation that IBM will scoop up Brocade. More likely, perhaps, IBM will go after Juniper Networks. (Both Brocade and Juniper are IBM partners and, making it even more interesting, Juniper is a BNT partner.)

If we take IBM out of the Brocade acquirer lineup, that would leave Dell as the most likely acquirer (although Dell is also tight with Juniper). But that goes to the heart of the question of whether Dell will, post-3PAR, try for another disk array vendor (Isilon, Compellent, Xiotech?), software vendor (CommVault?) or surprise everyone and light out into LAN/SANland via Brocade.

Making a Dell acquisition shift toward networking more likely, Dell recently hired a former Cisco exec -- Dario Zamarian -- to run its networking business. Assuming Dell turns to networking in its acquisition spree, it's a 50/50 bet between Brocade and Juniper, according to some Wall Street wags.

In an article posted on MarketWatch (see "Brocade targeted by M&A rumor mill"), Wedbush analyst Kaushik Roy was quoted as saying, "It makes a lot more sense for Dell to buy Brocade than IBM. With Dell, it's a no-brainer. If Dell has half of a brain, they should be taking Brocade out right now."

Then again, if Dell goes after Brocade (NSDQ: BRCD), they could wind up in another crazy bidding war with, say, IBM or Oracle. And Dell's been there, done that.

In addition to IBM and Dell, analysts have cited Oracle and Hitachi as possible acquirers.

#7 -- BlueArc

Hitachi Data Systems (HDS) has been mentioned as a potential suitor for BlueArc, but it doesn't seem to be in HDS' genes to take the acquisitions route. But HDS and BlueArc do have a tight relationship and BlueArc has some attractive technology differentiators.

# 8 -- FalconStor

Only one of our readers mentioned FalconStor as an acquisition target, and it was in the context of the company potentially being acquired by HDS or NEC, but FalconStor would be relatively inexpensive and the company has great technology (although not everybody knows it because FalconStor's software is often sold "under the covers" by its OEMs and resellers).

In addition to getting storage management and data protection software (VTL, CDP, data deduplication, replication, etc.) across a variety of product lines, an acquirer could put the hurt on a lot of competitors because, although a relatively small company, FalconStor's tentacles reach across a lot of vendors via its reseller deals.

The possibility of FalconStor (NSDQ: FALC) being acquired heightened recently with the resignation of ReiJane Huai, the company's CEO. In the wake of the resignation, FalconStor tapped Jim McNiel as interim CEO and president. Some analysts think that McNiel may be more open to acquisition than was Huai.

#9 -- Symantec

The latest rumors regarding Symantec centered on Microsoft as a potential acquirer (see "Is Microsoft Looking to Buy Symantec?" on InfoStor sister site eSecurity Planet).

However, that (unlikely) move would be more for Symantec's security product line, rather than its storage software, and would be in response to Intel's acquisition of McAfee.

Given the breadth of Symantec's product line, and the fact that the company would be expensive and is not a pure-play storage vendor, I put Symantec low on this list. I don't see Symantec being bought any time soon, if only because of the company's huge market cap.

#10 -- NetApp

Rumors about NetApp (NSDQ: NTAP) being acquired have existed as long as the rumors surrounding CommVault and Brocade have, maybe longer. I think the time to buy NetApp is long gone, but due to the persistence of the rumors the company still makes our Top 10 list.

I see NetApp more as an acquirer than a target. The problem with that (for NetApp) is that, if the IT market does contract down to five or six soup-to-nuts vendors, NetApp doesn't have a chance of making that list even if it does dip into its deep piggy bank to make some acquisitions. It's that logic that keeps NetApp on our Top 10 acquisition targets list.

One other company that occasionally comes up in acquisition conversations is Quantum. This would be for the company's data deduplication technology and products. However, an acquirer would also get Quantum's tape business, and I don't think any of the likely acquiring vendors is looking to add tape to their portfolio.

And in the Least-Likely-But-Often-Mentioned category of acquisition targets: EMC. The Wall Street Journal reported last week that Oracle may be eying EMC (see "EMC Shares Rise On Oracle Buyout Rumor"). Sure, that would fill in the Tier-1 storage hole in Oracle's portfolio and, more importantly, give them VMware, but I still think the Oracle-EMC acquisition speculation is ludicrous.

Related blog post:

The Top 10 storage acquisitions of 2010

Dirty little secrets of VM backup and recovery

2010-09-27T12:11:00.000-07:00

September 27, 2010 -- In addition to improving costs and efficiency, one of the reasons that IT organizations deploy virtualization is to improve data protection. However, according to a survey of 500 IT directors, conducted by Vanson Bourne and commissioned by Veeam Software, virtual servers do not seem to be improving data protection much.

The full results of the survey won't be available until next month, but I chatted with Doug Hazelman, Veeam's senior director of product strategy, about some of the preliminary results of the survey. Here are a few snippets:

Although a virtual machine (VM) can be built and deployed in minutes, performing a full recovery of a backed-up VM still takes nearly five hours on average. That compares to an average of six hours required to recover a physical server -- not much of an improvement.

Based on the survey results, 47% of full server recoveries are being performed merely to recovery a single file or application item (as opposed to recovering just the file or application item).

Also according to the survey, 63% of IT organizations experience problems (e.g., failed media, inability to start VMs after recovery, etc.) every month when attempting to recover a server. And failed recoveries cost enterprises more than $400,000 per year on average. However -- and here's the kicker -- only 2% of all server and VM backups are tested for recoverability each year, and on average these tests are performed once every two months (which translates into as many as 60 days of bad backups).

And in a related finding, the survey respondents report that testing the recoverability of a single backup takes IT teams approximately 13 hours. Not surprisingly, IT managers report that lack of human resources is the #1 reason why they don't test the recoverability of backups more often.

One more tidbit: hardware failure is the most common reason (cited by 68% of the survey respondents) why IT organizations need to recover servers and data, followed by general IT problems such as misconfiguration (63%) and user error (56%).

You can register on the Veeam site to receive a full copy of the VMware Data Protection report when it becomes available next month.

Another backup vendor you may not have heard of

2010-09-22T15:01:00.000-07:00

September 23, 2010 -- A few weeks ago I blogged about a backup software vendor that I had never heard of, despite the fact that they've been shipping product for more than four years. That was Cofio Software (see "A backup vendor you haven't heard of").

Afterwards I heard from a lot of data protection vendors wondering if I had ever heard of them (presumably because I hadn't written about them). I was aware of most of them, but one exception was AppAssure, which has been shipping its flagship Replay software suite since 2007.

If you're open to considering backup vendors outside of the Big Four (and given the relatively high readership of that Cofio post, many of you are), AppAssure is worth consideration.

Many of the company's executives hail from Symantec/Veritas (and AppAssure says that about 75% of its customers are former Backup Exec users) with some execs tracing their roots back to W Quinn Associates (which was acquired by Precise Software which was acquired by Veritas which was acquired by Symantec).

AppAssure claims 13 consecutive quarters of growth, and as of last month the company had exceeded its total 2009 revenues (which grew 268% over 2008 revenues), according to Steven Toole, AppAssure's chief marketing officer. The company also claims that Replay has accounted for more than 56 million backups on five petabytes+ of data.

The application-aware Replay4 software backs up the entire application stack, including app objects, files, operating systems and blocks with "near" continuous data protection (snapshots every 15 minutes).

The suite includes standard functionality such as backup and recovery, disaster recovery and cloud recovery, as well as all the specific features you might need in a data protection suite, including the elimination of backup windows, off-host processing, data deduplication and compression, VM failover, bare metal restore, corruption detection, virtualization, replication, fast backups (8GB/minute), etc.

And most of those features are bundled in what appears to be attractive pricing (exceptions include replication and virtualization, which are priced separately). For example, the base price is $899 per protected server, and that's for a perpetual (non-recurring) license. Specific pricing: $2,099 per VMware host with an unlimited number of guests, $1,499 for Hyper-V, $1,499 for SQL Server, and $2,099 for Exchange.

If that sounds intriguing, check out AppAssure's web site where you can get a free trial version of Replay.

Data deduplication: Permabit finds success with OEM model

2010-09-20T15:38:00.000-07:00

September 20, 2010 -- Following the blockbuster acquisitions of Ocarina by Dell and Storwize by IBM (well, pre-HP/3PAR they were blockbusters), all eyes were re-focused on the data deduplication space (aka data, or capacity, or storage optimization).

Around the same time (early summer), Permabit introduced an OEM version of its data deduplication software, dubbed Albierio, that storage hardware and software vendors can integrate into their products.

Permabit is among only a few "independent" deduplication vendors that are taking the OEM route rather than the acquisition route (although I still say the company is an attractive takeover candidate).

So far, Permabit's strategy seems to be paying off. The company has inked two OEM deals -- with BlueArc about a month ago and, today, Xiotech -- and I understand that Permabit has a few more OEM deals that will be announced over the next couple months.

Permabit claims zero performance degradation with its Albireo deduplication software, and both BlueArc and Xiotech officials cited Albireo's performance, as well as scalability and data "safety" (Albireo doesn't alter data) in announcing their OEM agreements. BlueArc and Xiotech are a good start for Permabit, although it's unclear how long it will take either vendor to integrate Albireo into their systems.

Both the BlueArc and Xiotech deals are focused on data deduplication for primary storage, as opposed to secondary or backup storage. That's where Permabit is currently focused, although Albireo software can be used across all storage tiers, and can be implemented with block, file or unified (block + file) storage.

I recently caught up with Tom Cook, Permabit's president and CEO, to talk about trends in the capacity optimization market.

I asked him about the fact that some of the large storage vendors seem to be embracing multiple capacity optimization techniques for different tiers of storage and, in some cases, carrying a mix of homegrown and OEM'd solutions for data deduplication and/or compression.

"We're still in the very early stages of data optimization, where you have single-function devices such as D2D and VTL appliances," says Cook. "But over time, the big players will try to get to a single data optimization solution that covers all storage tiers."

"Vendors will drive toward total efficiency, where's there's no re-hydration of data," says Cook. "And we believe that the best place to start is on primary storage. It's like New York: 'If you can make it there, you can make it anywhere.'"

Related articles:
Dell to acquire Ocarina for data deduplication
IBM scoops up Storwize

The Top 6 storage software vendors

2010-09-14T16:36:00.001-07:00

September 16, 2010 -- There hasn't been much change over the last year in terms of market shares for the Top 6 storage software vendors.

IDC recently released its quarterly report on the market, and EMC held on to its #1 ranking with a 24.4% market share on Q2 2010 revenue of $722 million, followed by Symantec at #2 (16.5% share, $488 in revenue), #3 IBM (13.9%, $410 million) and #4 NetApp (8.7%, $256 million).

Rounding out the Top 6 were CA and HP in a statistical tie. CA had a 3.6% market share on revenue of $108 million, and HP had a 3.3% share with revenue of $97 million. The only change in the lineup between Q2 2010 and Q2 2009 was a switch in positions between CA and HP.

In terms of revenue growth over the last 12 months, there were four gainers and two losers. Gainers included EMC (+13.3%), IBM (+10.6%), NetApp (+6%) and CA (+2%). Symantec (-6.9%) and HP (-10.3%) declined year-over-year.

Overall, the storage software market hit almost $3 billion in the second quarter, a 3.3% growth vs. the same period a year ago.

IDC segments the storage software market into eight product categories. Of those, the segments experiencing the most growth over the last year included storage infrastructure (+12.7%), archiving (+8.2%), storage management (+5.8%), and data protection and recovery (+4.9%).

For more details, see IDC's press release, "Storage Software Market Delivers Continued Growth in the Second Quarter."

Related blog post:
The Top 5 array vendors: HP #4, Dell #5

The Top 5 array vendors: HP #4, Dell #5

2010-09-08T14:43:00.000-07:00

September 9, 2010 -- Against the backdrop of the HP-Dell-3PAR drama (which, in case you were in a coma, ended with HP victorious in its $2.4 billion buyout of 3PAR), IDC recently released its quarterly report on the disk systems market.

For the second quarter of this year, EMC retained its #1 ranking in the external disk systems space with almost twice the market share of #2 IBM. On Q2 revenue of almost $1.3 billion, EMC held a 25.7% market share compared to IBM's 13.6% slice on revenue of $680 million.

NetApp was #3 with an 11.4% share on revenue of $571 million, followed very closely by HP with an 11.3% share on revenue of $567 million (which is essentially a dead heat between the two vendors).

Rounding out the Top 5 was Dell, with a 9.4% share and revenue of $472 million.

Liz Conner, IDC's senior research analyst, storage systems, estimates 3PAR's share of the market at 0.58%.

Depending on how quickly HP can ramp the 3PAR revenue stream, it won't be long before HP is firmly in the #3 spot, followed by NetApp at #4.

Or maybe not. In terms of revenue growth in 2Q10 vs. 2Q09, NetApp was the big gainer, with an impressive 55.3% revenue growth rate, followed by EMC with a 40.6% growth rate. HP only had 20.9% growth year-over-year, and Dell posted a 17% increase. IBM was the laggard at 10.9%.

The "others" category in the external disk array market continues to decline. In 2Q09, "others" accounted for 33.5% of the market ($1.6 billion in revenue), but in 2Q10 that share slipped to 28.6% ($1.4 billion). So the "others" market share is approximately the same as EMC's share.

That stat will no doubt throw more fuel on the speculation fire regarding which disk array vendor(s) will be acquired next (e.g., Compellent, Isilon, Pillar, Xiotech, etc.).

If you add up all (external + internal) storage systems revenue, the market share rankings shift: HP (19.3%), EMC (19%), IBM (15.8%), Dell (12.3%), NetApp (8.4%).

The NAS and iSCSI SAN sectors continue to rack up impressive growth figures. The combined NAS+iSCSI market grew 29.2% year-over-year in the second quarter, to $4.2 billion. EMC had a 28.9% share, followed by NetApp at 13.6%.

The NAS market posted 51.1% growth year-over-year, with EMC taking a 45.6% share followed by NetApp with 25.2%.

And the iSCSI SAN market grew 49%, with Dell in the lead with a 32.9% slice, followed by HP, NetApp and EMC in a statistical tie for second place.

Overall, the external disk storage market grew 20.4%, topping $5 billion in the second quarter.

For more details, see IDC's press release: "Disk Storage Systems Market Sustains Strong Double-Digit Growth Across All Sectors in Second Quarter."

HP to get 3PAR for $2.4 billion

2010-08-26T12:40:00.000-07:00

September 2, 2010 -- The fat lady seems to have sung. Dell exited the 3PAR acquisition stage with the following statement by Dave Johnson, Dell's senior vice president, corporate strategy: "We took a measured approach throughout the process and have decided to end these discussions."

After what appears to be a lot of under-the-covers negotiations, HP ended the drama with a $33-per-share, $2.4-billion acquisition offer (see "Dell Ends 3PAR Talks After HP's $2.4 Billion Bid" on Enterprise Storage Forum).

After what we've seen over the past couple weeks, I'm hesitant to call this a done deal, but that appears to be the case.

So HP gets 3PAR's crown jewels of virtualization, cloud computing capabilities, storage/data tiering and thin provisioning (not to mention ASIC technology). The question now is: How will HP fold 3PAR's systems into its existing disk array lineup? 3PAR overlaps big time with HP's venerable EVA line, and to a lesser degree with the high-end systems that HP OEMs from Hitachi Data Systems. Something has to give, although it will probably be awhile until HP provides details.

For Dell, the question is: Now what? Many observers have speculated that Dell will go after another disk array vendor (Compellent, Isilon, Xiotech?), but none of those companies are a replacement for what Dell had in mind with the 3PAR bid. Maybe Dell will turn to networking (Brocade?). Or software (CommVault?).

Dell put its cards on the table, and finally folded. For now. Which table will it sit down to next?

In a side show next to the three-ring HP-Dell-3PAR circus, litigious Crossroads Systems yesterday filed a patent infringement lawsuit against 3PAR and, according to an article on PC World, D-Link, Rorke Data, Chelsio Communications, DataCore Software, iStor Networks and American Megatrends. According to that article (see "3Par Faces Lawsuit as Bidding War Continues"), the suit involves a patent for a storage router that provides virtual local storage on remote storage devices.

HP, Dell, 3PAR: Bidding war or done deal?

2010-08-24T08:41:00.000-07:00

August 24, 2010 – We should probably just let this drama play out and then comment on it, but who can resist? As the storage world waits for Dell’s response to HP’s $1.6 billion counter-offer for 3PAR, I thought I’d take a stab at some of the questions that are being bandied about.

Will Dell counter? At first, I thought this was a done deal for HP. In an acquisition context, a 33% raise leads to an opponent folding. Then again, maybe this “I’ll see your $1.15 billion and raise you $450 million” is just these guys anteing up. This pot could get close to, or exceed, $2 billion.

Yes, I think Dell will counter, but I don’t think it would be wise. And the reason for that leads me to the next question.

Is 3PAR better for HP or Dell? I think it’s better for HP, but this is highly arguable.

HP has a solid high-end lineup with the HDS OEM deal, but I doubt that HP’s Dave Donatelli (formerly with EMC) is a reseller type of guy. 3PAR gives HP its own technology, and possibly a better weapon against EMC. The question would then be: What would HP do with the HDS line? And if HP follows Oracle’s suit on that, What becomes of HDS? (HP execs said that they would continue with the HDS partnership, business as usual.)

HP knows how to sell really high-end gear, which can’t be said about Dell. Plus, if Dell winds up acquiring 3PAR it would have to then follow up with a string of risky, blockbuster acquisitions to really own the IT stack. And even Dell’s war chest would be seriously depleted after a long series of billion dollar acquisitions.

If this deal pushes upward of $2 billion, there would be a lot of pressure on Dell to prove that it can play in the IT stratosphere, which is questionable. Dell obviously had a lot of success with the EqualLogic acquisition, but instead of going right to the very high end with 3PAR (and thus going head-to-head with EMC), it seems like a stepping-stone approach might have made better sense (e.g., acquiring BlueArc or Compellent or Isilon or Xiotech, etc.)

Will other suitors jump in? Doubtful. The only possibilities are IBM, EMC, NetApp or Oracle, and of those only Oracle is rich enough and nuts enough (see “Who will Oracle acquire next?” ). If Oracle wants another storage product line, my money is on (and Larry’s money is in) Pillar Data.

If IBM or EMC made a move for 3PAR it would (a) be admitting that their existing high-end arrays aren’t up to snuff and (b) create too much confusion among customers and overlap in product lines. For $1.6 billion+, there are much better acquisitions for IBM or EMC to make.

NetApp could probably afford 3PAR, but does NetApp really want to get into another big-time bidding war? Been there, done that.

I think we’re in for a bidding war, but there will only be two players at the table.

Related blog post:
HP’s bid for 3PAR not its first

Recommended blog: Stephen Foskett’s “Everyone Loves 3Par: Here’s Why”

Who will Oracle acquire next?

2010-08-20T14:37:00.000-07:00

August 20, 2010 – In my recent blog post on the Top 10 storage acquisitions of 2010, I solicited opinions from our readers on who they think will be acquired next. I’ll report on those crazy conjectures in a future post, but for now:

I heard from Stephen Jannise, an ERP market analyst with Distribution Software Advice. He recently blogged about what Oracle may be up to next (see “Oracle Mergers and Acquisitions: Who’s Next?”)

Stephen provides some very interesting analysis of potential acquisition candidates for Oracle, and has a survey on his post where you can vote. I encourage you to do it, if just for fun. Software Advice will have results from the survey within a few days, and I’ll update this post when I get the results.

Did you realize that since 2004, when it acquired PeopleSoft, Oracle has bought more than 40 companies, five of which were multi-billion dollar deals? Stephen includes a cool chart in his blog showing all of Oracle’s acquisitions and the relative sizes of the deals.

Most of Oracle’s previous acquisitions fall into the buckets of “applications,” “industry solutions,” “middleware” and “databases,” but two were in the “servers and storage” bucket: Sun and Virtual Iron.

However, in Stephen’s analysis and the reader comments on his blog, storage vendors are prominent as possible acquisitions for Oracle.

Based on analysis of Oracle’s M&A strategy and acquisition criteria, he puts the possible acquisitions into four categories:

Fairly Straightforward Ideas:
Teradata
Informatica
TIBCO

Messy, But Potentially Profitable:
CA
Sungard
Infor

Bold Moves into the Network Layer:
Research in Motion
Juniper Networks
F5 Networks
Brocade

Pricey Buys in Hot Markets:
VMware
EMC
Salesforce.com
Allscripts

Let Software Advice hear from the storage community: Check out the analysis and cast your vote at “Oracle Mergers and Acquisitions: Who’s Next?"

In the Comments section of The Software Advice Blog, the following storage or storage-centric vendors are mentioned as possible takeover candidates: Symantec, EMC, NetApp, LSI, Panasas

Dave’s comments (on only the storage vendors as potential acquisitions):
EMC, NetApp: Fuggedaboutit. These votes suggest that at least a few of Software Advice’s readers enjoy recreational drug use.
LSI: And that at least one reader has gone beyond recreational use. The question is not whether Oracle will buy LSI but, rather, whether Oracle will continue the LSI reseller deal that it inherited from Sun.
Panasas: Nope.
Brocade: Definitely a potential acquisition candidate, but not by Oracle.

In my opinion, the most likely (storage-oriented) candidates for Oracle would be CA and/or Symantec.

NetApp hits a home run in Q1

2010-08-18T16:22:00.000-07:00

August 18, 2010 – NetApp reported its fiscal first quarter 2011 results today, narrowly exceeding financial analysts’ expectations. But who cares about expectations? Let’s look at the (impressive) raw numbers.

For the quarter, NetApp (NASDAQ: NTAP) raked in revenue of $1.14 billion, which is a 36% increase over the same quarter a year ago ($838 million), although a 3% drop vs. the previous quarter.

GAAP net income was $142 million, vs. $52 million a year ago, while non-GAAP income was $183 million, vs. $76 million a year ago.

“With total revenue growth for the quarter of 36% and product revenue growth of 51% year over year, NetApp has begun our fiscal year with great momentum,” understated president and CEO Tom Georgens.

Company officials followed that up with predictions of $1.16 billion to $1.21 billion in revenue for the next quarter.

Highlights
The biggest growth in revenue came from hardware (which NetApp refers to as “product” revenue): At $720.8 million for the quarter, that’s a 51% increase over the same period a year ago (although down 5% sequentially). Total systems shipped increased 78% over the previous year’s quarter, with nice numbers across all segments, including entry-level (+107%), midrange (+37%) and enterprise (+102%).

The only negative I noticed was a 38% quarter-to-quarter decline in shipments of NetApp’s V-series systems, although shipments of that product line increased 42% year-over-year.

On the software revenue front (which NetApp refers to as “software entitlement & maintenance revenue”), the company pulled in $174.7 million – an increase of only 6% year-over-year and 0.5% sequentially. Hey, what do you expect when a market leader in a particular technology – data deduplication – gives it away for free? But software is the area that I would expect NetApp to improve on going forward.

Services revenue came in at $242.3 million, up 25% year-over-year and 1% sequentially.

(You may be noticing that NetApp’s quarter-to-quarter performance was not nearly as astounding as its year-over-year performance, but that’s in part because it’s previous quarter was, in fact, astounding: see “NetApp wows Wall Street, doubles quarterly profits.”

More fun facts
NTAP's gross margin in its first quarter was 64.5% (on a non-GAAP basis), while operating margin was 18.8%.

And what would any write-up on NetApp be without some fun facts on data deduplication? The company claims to have achieved “more than an exabyte of storage with deduped storage-system deployments” (which doesn’t really make sense to me) and to have “deployed more than 87,000 deduped storage systems” (again, does that mean systems with dedupe functionality baked in, or, systems that are actually using the dedupe functionality?)

But here’s the really interesting number in my opinion: NTAP's balance sheet shows $2.61 billion in cash. In light of recent acquisitions (Dell-3PAR, Dell-Ocarina, IBM-Storwize, etc.), you just have to wonder who NetApp is going to buy.

As I’ve speculated before (without an iota of knowledge in the matter), Permabit might be a palatable morsel, but maybe I’m just drunk on the dedupe juice.

Look for some acquisition speculation in my next post.

Related blog posts:
EMC breaks Q2 revenue record
Earnings recap: ELX, QLGC, CVLT, SYMC, PAR, CML, STEC, HDS
Top 10 storage acquisitions of 2010

Top 10 storage acquisitions of 2010

2010-08-11T08:27:00.000-07:00

UPDATED August 16, 2010 – I originally posted this Top 10 acquisitions piece last week, with EMC's acquisition of Greenplum in the #1 spot. Today's announcement that Dell plans to acquire 3PAR for a whopping $1.15 billion clearly catapults that deal into the #1 position. As such, here's my revised list of the Top 10 storage acquisitions of 2010, in ascending order:

#10: EXAR – NETERION
This one probably wouldn’t have made the Top 10 list except for the fact that it’s Exar’s second storage-related acquisition in the last year, indicating that this relatively unknown vendor is up to something in the storage market.

The acquisition of Hifn last year put Exar in the storage optimization market with data deduplication, compression and encryption technology. Which put them into discussions that include Storwize (acquired by IBM, see below), Ocarina Networks (acquired by Dell, see below) and Permabit.

The acquisition of Neterion this year (reportedly for $10 million to $11 million) puts Exar in the 10GbE/FCoE adapter space, and might get them a place in conversations typically focused on vendors such as Emulex, QLogic, Brocade, Broadcom and Intel.

“We see a lot of synergy between Neterion’s virtual I/O technology and Hifn’s data compression, security [encryption] and data deduplication technologies,” said John Williams, vice president of Exar’s datacom and storage business.”

Interesting, but does an engineering-focused company have the marketing might to compete with the big boys? Well, Neterion OEMs include EMC, HP, IBM, Fujitsu and Hitachi, so the company at least knows how to play with the big boys.

See “Exar to acquire Neterion”

#9: SOLARWINDS – TEK-TOOLS
As with Exar, this one made the Top 10 list in large part due to the surprise factor: Few in the storage world had ever heard of SolarWinds, which specializes in network and applications management software.

Tek-Tools has for a long time specialized in storage resource management (SRM) tools, and SolarWinds plans to integrate Tek-Tools’ Profiler SRM suite into its Orion portfolio by the end of this year. Sounds like a good fit, but since when did any acquisition-driven integration project get completed on schedule?

SolarWinds paid $42 million for Tek-Tools. And if that seems steep, consider the fact that Tek-Tools partners and resellers include 3PAR, AdviStor, Agami, Bell Micro, Brocade, CA, Cambridge Computer, CDW, Dell, EMC, GlassHouse, the Harding Group, HP, IBM, Kisdata, LSI, the Microsoft Developer Network, MySQL AB, NetApp, Novell, PC Mall, Quantum, Red Hat, Siemens Business, Sun, Syncsort, Techmate, VMware and Xiotech.

See “SolarWinds acquires Tek-Tools for SRM”

#8: PMC-SIERRA – ADAPTEC
Throughout the 1990s, Adaptec was synonymous with SCSI, and had a lock on the SCSI controller/adapter market. The company reached its heyday when it racked up revenues of about $800 million in fiscal 2000. But Adaptec didn’t see the winds of change blowing. PMC-Sierra acquired Adaptec for $34 million.

In addition to Adaptec’s technology and products, PMC acquired Adaptec’s extensive channel, where it is still strong in RAID adapters.

The interesting thing about this acquisition is that it puts PMC-Sierra in even more intense competition with arch enemy LSI. Now PMC will compete in the channel with LSI at the board level, whereas previously the battle was fought on the semiconductor front.

See “PMC-Sierra to buy Adaptec’s channel storage business”

#7: NETAPP – BYCAST
The terms of this deal were not disclosed. According to our original article on the acquisition: “NetApp is advancing its efforts in the cloud storage market with the acquisition of Bycast, a developer of object-based storage virtualization software that turns multiple storage devices across geographically dispersed locations into a single pool for storing fixed content data.”

See “NetApp to acquire Bycast for cloud storage software.”

NetApp plans to leverage Bycast technology to go after markets such as digital media, Web 2.0, healthcare, and cloud services providers.

Bycast’s flagship product is its StorageGRID virtualization software. It will be interesting to see what happens to some of Bycast’s existing OEM deals, which include partnerships with IBM and HP.

#6: EMULEX – SERVERENGINES
Prior to acquiring ServerEngines, Emulex was in a dicey position: The company licensed critical technology, including 10GbE ASICs, from ServerEngines and that technology was key to Emulex’s (at the time) risky gamble of betting the farm on 10GbE – a market owned largely by Broadcom and Intel.

The position was dicey because a competitor could scoop up ServerEngines, thus pulling the rug from underneath Emulex’s (at the time) loose footing. Emulex paid a high price for ServerEngines, but there wasn’t any choice.

According to our original article on the acquisition: “Emulex will acquire ServerEngines for $78 million in cash and eight million shares of Emulex stock. Based on Emulex’s closing price of $10.11 last week, those eight million shares would translate into an additional $81 million, bringing the total to almost $160 million.”

But wait, there’s more: “In addition, Emulex will issue four million shares of stock if ServerEngines meets certain business objectives by the end of 2011. Emulex also agreed to assume ServerEngines’ debt, which is currently $25 million. As such, the deal could eventually exceed $200 million.”

See “Emulex to acquire ServerEngines.”

The bet, and the acquisition, seem to have paid off. Emulex has racked up a number of OEM design wins for its 10GbE/FCoE/iSCSI converged network adapters (CNAs), most notably with HP. This puts Emulex at the table with Intel and Broadcom (which it beat out for the HP business) and may strengthen its position vs. QLogic and Brocade. In addition to HP, Emulex has design wins with vendors such as Dell, EMC, HDS, HP, IBM and NetApp.

ServerEngines was founded in 2004 by former Broadcom engineers that were previously with ServerWorks, which was acquired by Broadcom in 2001. In early 2009, Broadcom launched an unsuccessful hostile takeover of Emulex.

#5: DELL – OCARINA
Rumored to be in the $150 million ballpark, Dell’s acquisition of Ocarina came as a surprise to almost everybody. And this one (along with #4, see below) confirmed that storage optimization (data deduplication and/or compression) of primary storage is The Next Big Thing.

According to my original blog post on this acquisition (see “Dell to acquire Ocarina for data deduplication”): “Until the announcement of its embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive.”

That led some analysts to predict that Dell is pursuing a one-size-fits-all approach to data deduplication where Ocarina’s technology will be used across the storage spectrum. If true, that would be bad news for Dell dedupe partners Symantec, CommVault and maybe even EMC Data Domain. But I don’t think that’s Dell’s game plan, at least not for the foreseeable future.

I think Dell will initially leverage Ocarina’s technology in specific image-intensive, fixed-content applications, and only on primary storage. That space is where, so far, Ocarina has made its mark, with large wins at companies such as Kodak. Dell will continue to use Symantec, CommVault and Data Domain where those companies’ technologies make more sense, or where customers demand it.

Besides, the Ocarina technology could be used in conjunction with deduplication technology from vendors such as Symantec and CommVault.

And in a related Top 10 acquisition . . .

#4: IBM – STORWIZE
This one had been rumored for weeks before IBM made it official, so it ranks low on the surprise factor but high on the industry influence scale. Even more than the Dell-Ocarina deal, and even more than NetApp’s evangelizing, IBM’s acquisition of data compression specialist Storwize put data reduction for primary storage in the #1 spot among Hot Storage Technologies.

Rumors put this deal in the range of $140 million.

IBM didn’t lay out specific plans, and it already has some good data reduction technology, but it looks like Big Blue will apply the Storwize technology to its high-end XIV system, Scale-Out Network Attached Storage (SONAS) platform, System Storage Easy Tier, and maybe even its ProtecTIER deduplication products.

Storwize’s data reduction technology differs from some of its competitors in that it is in-line, real-time compression, as opposed to data deduplication.

It’s certainly not an understatement to say that being acquired by IBM was the smartest thing Storwize did since changing its name from Storwiz.

Read the full story on InfoStor partner site Enterprise Storage Forum: “IBM to Buy Storwize for Real-Time Data Compression.” And check out Kevin Komiega’s blog post: “IBM to Acquire Storwize.”

#3: VISION SOLUTIONS – DOUBLE-TAKE
This one ranked high on the surprise factor (because Vision Solutions isn’t exactly well-known in the storage community) and it also ranked high on dollars, being valued at $242 million. Those two factors earned it the #2 ranking, although IBM-Storwize and Dell-Ocarina may be more interesting and certainly got a lot more ink.

The $242 million amounted to about $10.55 per Double-Take share. Double-Take went public in 2006 at about $11 a share.

Prior to the Vision Solutions announcement, it was well known that Double-Take was on the block, but the smart money was on vendors such as Dell and HP as potential acquirers.

Vision Solutions specializes in data protection software for IBM systems, while Double-Take’s strengths are in backup, replication, disaster recovery and high availability software, primarily for Microsoft platforms.

See “Vision Solutions to acquire Double-Take”

#2: EMC – GREENPLUM
I never did find out exactly what EMC paid for Greenplum, a data warehousing and analytics specialist, but my (questionable) sources tell me that the acquisition payment would easily put the deal near the top of this list. And besides, what would a Top 10 Storage Acquisitions list be without an EMC entry?

Greenplum claims more than 100 customers, including NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.

In addition to its massively parallel processing (MPP) Greenplum Database, the company has Greenplum Chorus, a cloud platform for collaboration and data sharing. Greenplum will become the foundation of a new division within EMC’s Information Infrastructure business.

So it’s a nice fit with EMC’s private cloud initiatives, but it also roughens up the competition between EMC, Oracle, IBM and Sun. Do you have a feeling that there’s at least one more big – very big – acquisition on the way?

See “EMC acquires data warehousing vendor Greenplum.”

#1: DELL -- 3PAR
At approximately $1.15 billion, Dell's planned acquisition of 3PAR is in the same ballpark as EMC's acquisition of Data Domain last year, both of which qualify as game changers.

Dell has commenced a tender offer to acquire all outstanding shares of 3PAR stock for $18 a share, or about an 86% permium over 3PAR's closing price on Friday.

That hefty price tag suggests that there were other bidders for 3PAR. And if anyone doubted that Dell wants to be a real (as opposed to reseller) player in the storage space, the 3PAR acquisition should assuage those doubts.

This announcement will probably once again call into question Dell's reseller partnership with EMC, but I don't see why. The Dell-EMC marriage will run its course one way or the other, but the outcome won't have anything to do with the 3PAR deal.

However, when you look at all of Dell's storage acquisitions (3PAR, Ocarina, EqualLogic, Exanet, Scalent and probably more to come), Dell and EMC could be on an accelerated path to splitsville. (Reportedly, Dell says that there is only about a 20% overlap between the 3PAR and Dell/EMC product lines.)

Historically, the summer months have been ripe for storage acquisitions so, given the prevailing climate, fasten your seatbelts. I may have to update this Top 10 list within the next two weeks.

Earnings recap: ELX, QLGC, CVLT, SYMC, PAR, CML, STEC, HDS

2010-08-07T13:09:00.000-07:00

August 6, 2010 – Over the past couple weeks, a number of storage vendors reported quarterly earnings (or lack thereof). Overall, the storage industry seems to be on a slow rebound, driven in part by technology refreshes at the server, PC, OS and network levels.

The financial picture started out brightly with a stellar report from Isilon (see “Isilon stock soars on Q2 earnings report”), but after that results were a mixed bag. Here’s a quick recap:

EMULEX (NYSE: ELX)

The numbers: Emulex reported its fourth quarter results yesterday, with net revenues of $103.1 million, an increase of 30% over the same quarter last year and a 1% increase over the previous quarter. Q4 GAAP net loss was $2.5 million, compared to $4.5 million in Q4 of fiscal 2009.

Highlights: President and CEO Jim McCluney highlighted the company’s 10GbE/FCoE technology and design wins, most notably with HP for Emulex’s OneConnect UCNA technology. Emulex also has design wins with Cisco, Dell, EMC, Fujitsu and HDS.

Comments: Emulex bet the farm on 10GbE, and with the HP LOM win the company appears to be poised for impressive growth, although the timing of that ramp is unclear. The company will also benefit from the upcoming server upgrade cycle, which should accelerate in the fourth quarter. Emulex’s acquisition of ServerEngines (expensive but necessary) is expected to be finalized at the end of this month.

QLOGIC (NASDAQ: QLGC)

The numbers: For the three months ended June 27, QLogic earned $25.4 million, up 70% percent from $15 million in the same period a year earlier. Revenue rose 16% to $142.6 million, vs. $122.8 million a year ago. Analysts were expecting $144.1 million in revenue.

Highlights: Wall Street can be cruel to companies that have a lock on their primary markets, such as QLogic and Emulex in the Fibre Channel HBA space, because of consistently high expectations: Although QLogic’s numbers were quite good, its stock price took a hit on the day of its quarterly earnings announcement, dropping 14% at one point.
Interesting tidbit: The company had $10 million in revenue “from products serving host applications for the fast-growing converged network [FCoE] market.”

Comments: Although QLogic’s future success does in fact depend on its performance in the FCoE/CEE/DCB space, it’s too early to factor FCoE performance into QLogic’s stock performance. Next year will be The Year of FCoE reckoning, as the QLogic-Emulex-Brocade-Broadcom-Intel battle reaches war status.

COMMVAULT (NASDAQ: CVLT)

The numbers: Revenues for CommVault’s first fiscal quarter were $66.3 million, an increase of 10% over Q1 2010 and a decrease of 10% vs. the previous quarter. Net income was $3.5 million, up $1.1 million vs. the same period a year ago.

Highlights: Dell accounted for about 26% of CommVault’s revenue, up 21% year-over-year.

Comments: Some observers predicted that Dell’s recent acquisition of Ocarina Networks (see “Dell to acquire Ocarina for data deduplication”) spelled trouble for CommVault. That assumed that Dell was headed toward a one-size-fits-all approach to data deduplication. I don’t think so. Dell will probably continue with its existing dedupe-related reseller deals (CommVault, Symantec, EMC Data Domain) while leveraging the Ocarina technology in specific markets (e.g., primary storage optimization in image-intensive environments).
One good reason to stick with CommVault’s stock is the upcoming release of Simpana 9, which I understand will include some significant improvements in the areas of deduplication and virtualization.

SYMANTEC (NASDAQ: SYMC)

The numbers: Symantec reported revenue of $1.433 billion in its first fiscal quarter, essentially unchanged from $1.432 billion in last year’s Q1. But the earnings picture was brighter. The company reported net income of $161 million, compared to $74 million in Q1 2009.

Highlights: Revenue for Symantec’s largest business segment – storage and server management – fell 5% year-over-year to $524 million.

Comments: Symantec’s storage revenues should pick up in the next few quarters due to a ramp in sales of its Backup Express 10 and NetBackup 7 software (both of which were introduced early this year) and a new version of Enterprise Vault this quarter.

3PAR (NYSE: PAR)

The numbers: 3PAR’s quarterly revenues were $54.3 million, an increase of 22% vs. $44.5 million in the same period a year ago. GAAP net loss was $1.8 million, virtually identical to the company’s loss in the year earlier quarter.

Highlights: 3PAR president and CEO David Scott emphasized the company’s strengths in “multi-tenant clustering, thin technologies, and autonomic management,” all of which play well in the cloud.

Comments: Not as impressive as Isilon’s quarterly report, but companies such as 3PAR, Isilon and Compellent (see below) are proving that upstarts can put a dent in the armor of the market share leaders by leveraging truly differentiated technology, at least for awhile.

COMPELLENT (NYSE: CML)

The numbers: In its second fiscal quarter ended June 30, Compellent posted record revenue of $36.5 million, a 27% increase over the same quarter in 2009 and a 15% increase over the first quarter of 2010. GAAP net loss was $172,000, and non-GAAP net income was $1.5 million.

Highlights: Compellent claims an installed base of 2,124 customers, an increase of 182 customers vs. the previous quarter. Cash and investments totaled $132 million.

Comments: Compellent’s data movement/tiering/management technology, dubbed Fluid Data, appears to be a primary catalyst behind Compellent’s growth. Pipar Jeffray analysts noted that key risks for Compellent include “reliance on channel partners, limited international exposure, well-capitalized competitors and a challenging macro-economic backdrop.”

STEC (NASDAQ: STEC)

The numbers: Solid-state disk (SSD) specialist STEC posted revenue of $61.3 million in the second quarter. That’s a decrease of 29.1% from the second quarter of 2009, but an increase of 58% from the first quarter of 2010.

Highlights: STEC bounced back from a disappointing first quarter, posting non-GAAP gross profit margin of 42.7% vs. 34.2% in the first quarter, having resolved inventory carryover issues with its largest customer (EMC). For the next quarter, company officials are predicting revenue in the $78 million to $80 million range, indicating a continued resurgence.

Comments: STEC stock has been on a roller-coaster ride, with its 52-week price ranging from $9.47 to $42.50 a share. The company has an early lead in the enterprise SSD market, with design wins at most of the leading disk array vendors. And STEC is still the single source for SSDs at most of its customers. STEC recently introduced MLC SSDs, augmenting its SLC-based SSD product line with lower-cost alternatives. (See “MLC vs. SLC flash for enterprise SSD” on infostor.com.) And the next generation of STEC’s Zeus and Mach SSDs are due later this year, reportedly with 2X the capacity.

HITACHI DATA SYSTEMS (HDS)

Hitachi Ltd. recently reported its Q1FY10 financial results. The company’s HDS operation is not publicly traded, but here’s a recap of HDS’ results. NOTE: The following is excerpted from a report by Aaron C. Rakers, managing director at Stifel Nicolaus.

The numbers: “Consolidated revenues (revenues from HDS + revenues of storage systems sales in Japan) for the first quarter fiscal year 2010 were $804 million, up 13% year on year. This was HDS’ third consecutive record quarter. The first quarter, which ended June 30, was the best Q1 in HDS history, beating the company’s previous best first quarter by $100 million.”

Highlights: Year-over-year revenues grew across all geographies: Americas (+27%), EMEA (+4%), APAC (+19%, excluding Japan domestic sales).

Comments (from Aaron Rakers): “HDS’ Q1FY10 results continue to show increased diversity between hardware, software and services, with solid growth across all areas. Fueled by strong AMS systems sales and increased USP V/VM platform adoption, the company’s hardware revenue was up double digits from Q1FY09. Likewise, software and services revenues grew double digits year-over-year and now account for nearly half of HDS’ total revenue, which is a higher percentage compared to the previous year. The increase in software and services revenue was attributed to increased traction in virtualization software such as Hitachi Dynamic Provisioning. HDS’ file and content portfolio, which includes the Hitachi High-performance NAS Platform and Hitachi Content Platform products, also showed strong year-on-year growth; in fact, the file and content portfolio recorded a 200% increase in FY2009 compared to FY2008.”

Related articles:
EMC breaks Q2 revenue record (blog post, July 21)
NetApp wows Wall Street, doubles quarterly profits (news story, May 26)

What’s so cool about Intel’s Jasper Forest?

2010-08-02T13:26:00.000-07:00

August 2, 2010 – Intel recently began production shipments of its C5500/C3500 series processors, formerly code-named Jasper Forest. The chips, which are based on the Nehalem architecture and are part of the Xeon line of CPUs, are optimized for embedded storage and communications systems.

David Tuhy, general manager in Intel’s Storage Group, says there are four key features that storage vendors and end users will benefit from: a built-in RAID accelerator, asynchronous DRAM self-refresh technology, PCIe non-transparent bridging, and increased bandwidth.

The C5500/C3500 includes an integrated accelerator (internally dubbed Crystal Beach) that offloads RAID-5 and RAID-6 processing and eliminates the need for a custom ASIC for RAID-5/6 operations. In addition to increasing performance, the RAID offload functionality saves energy and space on RAID controller cards.

A single-core Jasper Forest processor consumes a maximum of 23 watts, while a quad-core processor consumes a maximum of 85 watts, resulting in decreased power consumption and denser storage designs. (The C5500/C3500 requires about 23 watts less power than the previous-generation Xeon processors.)

The asynchronous DRAM self-refresh (ADR) feature is data retention technology that provides “the ability to keep DRAM in a refresh state in case you lose power,” Tuhy explains.

The C5500/C3500’s PCIe non-transparent bridging (NTB) technology enables high-availability, active-active failover. And the integrated PCIe support and NTB allows multiple systems to connect over a PCIe link, eliminating the need for an external PCIe switch or hub chip.

Finally, the Jasper Forest processors have about 2X more bandwidth per watt than previous generation Xeon 5400 series processors, which enables the chips to support hundreds of disk drives as well as solid-state disk (SSD) drives, according to Tuhy.

The Xeon C5500/C3500 is typically integrated with Intel’s 3420 chip (see diagram), which has 12 USB 2.0 ports, six SATA ports, and eight PCIe 2.0 lanes.

Promise Technology, a RAID controller and array vendor, hopes to be among the first to deliver RAID arrays using the Jasper Forest processors. Promise plans to ship limited quantities of C5500/C3500-based storage systems in the fourth quarter, with production shipments expected in the first quarter of next year.

In a press release announcing its plans to integrate the Jasper Forest processors into future storage systems, Promise’s vice president of engineering, Jin-Lon Hon, called the C5500/C3500 “one of the most significant advancements in the storage industry in the past decade.”

For Promise, one of the key benefits of the C5500/C3500 is increased performance. Ray Bahar, Promise’s vice president of sales and marketing, expects a 4X to 6X increase in performance versus the previous generation Xeon processors that Promise has been using.

“With the older architecture we’re getting around 4GBps bandwidth, but the next generation will provide around 16GBps,” says Bahar.

He also likes the fact that the Jasper Forest processors integrate a variety of storage functions on a single ASIC, which “saves a lot of space on the controller board and significantly decreases power and thermal requirements,” says Bahar.

In addition, he says that the ability to scale from a single-core chip to a quad-core processor enables RAID arrays based on the C5500/C3500 to scale from the SMB market to large enterprises.

Finally, “much higher throughput eliminates the need for multiple RAID heads to get the same performance, so the overall cost to end users will be much less,” Bahar adds.

In addition to Promise Technology, AIC/Xtore has also announced support for the Jasper Forest processors. The company demonstrated its Orion Unified Storage Server, based on the C5500/C3500, at the NAB show earlier this year.

Side note: Jasper Forest is a petrified forest in Arizona.

Related article:
Intel previews Jasper Forest processors

A backup vendor you haven’t heard of

2010-07-28T13:39:00.000-07:00

July 28, 2010 – It’s hard to imagine that there’s a backup software vendor out there that, until recently, I hadn’t heard of. And I’m guessing you haven’t heard of them either.

Cofio Software was formed in mid-2006 and has been shipping its flagship AIMstor data protection software for about a year. The company’s early adopters have been mostly in China, where users are apparently more open to trying something new and aren’t as tied to brand name products.

Some of Cofio’s founders (including Tony Cerqueira and Fabrice Helliker) were formerly at BakBone Software, but Cofio can trace its roots back to AT&T Bell Labs and the NetVault product line.

In addition to backup and restore, the AIMstor suite includes a host of other data protection applications and technologies, including data deduplication (target and source, with Change Byte Transfer technology), snapshots, real-time replication, continuous data protection (CDP), live/batch backup, bare metal recovery, and more.

However, in my opinion Cofio has two key differentiators vs. the more well-known backup vendors:

--All of Cofio’s data protection applications are built on a common code platform, or unified framework. In that sense, Cofio’s primary competitor may be CommVault, which also has a common code base for a variety of data protection applications. This is in contrast to the disparate, often non-integrated point products that vendors include in their data protections suites. It’s also in contrast to the need for users to buy various data protection applications from multiple vendors, which leads to management nightmares.

--AIMstor has a (seemingly) unique interface with drag and drop policies and data flow of physical and virtual machines and groups. It’s called a Workflow User Interface (WUI), and it has a whiteboard feel to it. Since I don’t use enterprise-class backup software, it’s hard for me to describe this interface. It’s the sort of thing that you need a demo for (see link below).

Although Cofio has been shipping AIMstor for about a year, the company just released the 2.2 version, which can be considered the first production release.

Cofio is in the process of recruiting VARs, and only has a handful of them in North America. One of those VARs is Cambridge Computer.

I asked Cambridge Computer CTO Jacob Farmer what he likes about AIMstor, and here’s his response:

"I just started working with them. I like the concept. In a sentence, you define policies and it protects your data. All other backup products just copy data on a scheduled basis.

Effectively, you tell the software:
- what data you want to protect
- what you need for recovery point
- what you need for recovery time
- what you need for retention
- where you want copies of the data stored

It also includes other aspects of data protection
-- immutability (enforcement of write-once)
-- user access audit logs
-- bare metal to disparate hardware "

The recently released version of AIMstor includes a lot of new features. For details, see the AIMstor 2.2 press release.

But like I said, this is the sort of product that you really need a demo on to understand it fully. Check out the short video demo on Cofio’s website to get started.

Or click here for a free trial version of the software.

Of course, this begs the question of whether or not the storage industry needs yet another backup vendor, but if you’re looking for something new and aren’t married to the big brand name vendors, Cofio’s AIMstor might be worth a test drive.

Related article from wikibon.org (Aug. 17, 2009):
Cofio Software wants SMBs on board with their data management platform

Related articles from InfoStor:
CommVault connects Simpana software to the cloud
CA debuts ARCserve r15, adds D2D software
Symantec beefs up SMB backup, security
Arkeia integrates backup with VMware vStorage

Related article from wikibon.org (Aug. 17, 2009):
Cofio Software wants SMBs on board with their data management platform

Attention storage pros in the entertainment industry

2010-07-26T11:17:00.000-07:00

July 26, 2010 – There are plenty of storage-oriented trade shows and conferences to choose from, but few focus on a specific vertical market. One exception is the upcoming Creative Storage Conference next Tuesday, August 3, in Culver City, CA – conveniently located near the L.A. entertainment hubs of Hollywood, Burbank and Studio City.

The fourth annual, one-day conference is focused solely on the storage issues faced by creative professionals in the media and entertainment industry, and addresses applications such as pre- and post-production, HD content capture and editing, animation, special effects and non-linear editing.

The sessions, presentations and discussions will cover all areas of storage, from primary storage to content archiving.

Sessions include:

Content Capture: Many cameras, many effects, many storage devices
Soothing the bits, posting the passion: Storage for editing and post production
Delivering the goods: Storage for content delivery
Keeping the good stuff to last: Content archiving and asset management
So that’s what you mean – Entertainment and media users talk about how they use digital storage

A sampling of the storage vendors that will be participating includes NetApp, Isilon, Quantum, DataDirect Networks, SanDisk, Western Digital, AIC and Promise Technology.

View the full agenda and register at the Creative Storage Conference web site.

Isilon stock soars on Q2 earnings report

2010-07-22T13:08:00.000-07:00

July 22, 2010 – Who says that startups can’t crack the market-share stranglehold of the big boys? Isilon appears to be on its way to doing just that.

Isilon presented its Q2 earnings report today, highlighting quarterly revenue of $45.1 million, up 15% over Q1 revenue of $39.3 million and up a whopping 56% over the second quarter of 2009.

The apparent turnaround has once again put Isilon (NSDQ: ISLN) in the billion dollar club, with a market value of $1.06 billion.

The news boosted Isilon to the #1 spot in the InfoStor Market Index today.

At one point today the company’s shares were trading at $16.24, up almost 20%. This year, Isilon’s stock price is up about 125%.

It’s hard to believe that it’s been almost four years since Isilon went public, in September 2006, and it’s interesting to note that the company’s stock topped $27 back in those heady days (after an IPO opening at $13 per share).

You can get the full financial results in Isilon’s press release, but here a few key stats:

--Q2 net income was about $2 million, or twice what analysts had predicted and twice the company’s Q1 2010 earnings. That compares to a net loss of $3.7 million in Q2 2009.

--Gross margin was 62%, up from 57% in Q2 2009.

--Isilon execs are estimating fiscal 2010 revenue growth in the low-to-mid 40% range

And the company seems to be in hiring mode. Isilon now has 398 employees, an increase of 30 people vs. the previous quarter.

I’ve always thought that one of Isilon’s weaknesses was an over-reliance on a single vertical market -- media and entertainment, which is particularly well-suited to the company’s scale-out NAS architecture. However, Isilon seems to making inroads into the more general IT market.

In the second quarter, media and entertainment accounted for about 35% of the company’s revenue. However, revenue from mainstream/traditional enterprises accounted for 28% of its revenue, a figure that is steadily growing.

From what I hear, Isilon's success is in no small part due to its strengths in the virtual server space. Here's what one user emailed to me in response to my original post:

"They are killing it in the VMware market. Their VMware story for NFS is head and shoulders better than everyone else, at least from a management perspective.

"Just imagine, no LUNs or volumes. Which means no more spending half my day balancing VMs across LUNs and volumes. Presto, 1/2 of the stuff that blows about managing VMware goes away. I can vMotion storage whenever with no repercussions. I can take snaps and replicate at a file/dir level (i.e. VM level), and it is monkey easy to manage as a system. "

Look out, NetApp.

Related articles:
Isilon puts multiple tiers under one file system
EMC breaks Q2 revenue record

Keep an eye on this startup

2010-07-21T11:32:00.000-07:00

July 21, 2010 – Some storage startups anticipate a trend then ride the coattails of the trend. Other startups actually create trends.

One startup that may be in the latter category is Actifio, which announced $8 million in Series A financing today led by Greylock Partners and North Bridge Venture Partners, after an 18-month incubation period.

Actifio is pioneering a concept it refers to as Data Management Virtualization, or DMV (a search acronym that will surely lead you astray).

The company’s press release states that server virtualization technologies have transformed the IT infrastructure but that the storage infrastructure is still a major bottleneck “with data lifecycle management shackled by point tools that are deployed in silos – creating complexity, inflexibility and significant expense . . . Actifio’s DMV technology reduces the cost of managing the application data lifecycle and virtualizes vendor-independent physical or cloud-based storage devices into a private, public or hybrid storage cloud infrastructure.”

That didn’t help me much, so I had a chat with one of Actifio’s key founders – Ash Ashutosh, formerly a vice president and chief technologist in HP’s StorageWorks division and, perhaps more importantly in this context, founder of AppIQ, which was acquired by HP a few years ago.

“DMV is a solution for data protection, disaster recovery, business continuity and lifecycle management of data,” Ash explained. “It simplifies data management. The paradigm we’re applying to data management is analogous to what virtualization did to servers.”

I still don’t get it, but I’m calling attention to this startup because of its management pedigree. In addition to Ash, Actifio executives include:

David Chang, vice president of products (formerly founder and VP of product management at AppIQ)
Steven Blumenau, VP of products (formerly a VP at Iron Mountain and senior director of advanced development at EMC)
Rick Nagengast, VP of sales (formerly VP of channel and partner development at EMC and GM of the Storage Products Division at DEC and Compaq)
James Pownell, customer operations manager (formerly founder and president of Exagrid, founder and VP of engineering at Highground Software, and a development manager at EMC)

That’s a lot of HP/AppIQ/EMC blood.

Actifio is expected to ship its product “early in the fourth quarter” – I’m guessing around the time of Storage Networking World. The company plans to sell though the channel, and is currently in hiring mode.

Dell to acquire Ocarina for data deduplication

2010-07-19T17:33:00.000-07:00

July 19, 2010 – Dell dropped a bombshell on the data deduplication market today with the announcement that is has signed an agreement to buy Ocarina Networks. The amount of the deal was not disclosed (but I’m working on that). We’ll be following up on this announcement in the near future as we get more info, but for now:

Ocarina has content-aware storage optimization technology – data deduplication plus compression – that until recently it sold bundled in appliances. Less than a month ago, the company announced an embeddable version of its ECOsystem data reduction technology targeted at OEMs.

Since that announcement came amidst rumors that IBM was about to buy Storwize (an Ocarina competitor) for $140 million, the Ocarina announcement led to speculation about which vendors might adopt the technology, as well as which of Ocarina’s partners might acquire the company. (The IBM-Storwize rumor has, at least for now, fizzled out.)

In a blog on Ocarina’s announcement, I opined that HP might be interested in Ocarina (see “Ocarina: 4 dedupe predictions, and an OEM strategy,” a June 22 blog post). Along with EMC, Hitachi Data Systems, BlueArc and others, HP is one of Ocarina’s partners.

That level of perspicuity is why I don’t invest in storage vendors.

Until the announcement of the embeddable, OEM version of its software, Ocarina was known primarily as a vendor of data reduction technology for primary storage. But the embeddable version is applicable across the storage spectrum, from primary storage to backup and archive storage.

In Dell’s press release on the acquisition announcement, Ocarina CEO Murli Thirumale was quoted as saying “This brings deduplication to not only primary storage, but also to key storage workflows including backup, replication, migration and tiering.”

However, the release also stated that “Ocarina brings a leading deduplication capability to complement Dell’s EqualLogic solutions.” And Brad Anderson, senior vice president in Dell’s Enterprise Product Group, also singled out the EqualLogic product line in a quote: “Ocarina provides an important component of our data management portfolio and our EqualLogic ecosystem . . . .”

So, the Ocarina technology will be applied only to the EqualLogic line of iSCSI arrays? Or will it be applied across the board; in other words, all of Dell’s storage systems? And if the latter is correct, what does that mean for Dell’s existing data deduplication technologies and partners?

Will Dell still need deduplication partners CommVault and Symantec?

What are the implications for Dell’s reseller deal with EMC for Data Domain deduplication systems?

Will Dell eventually have one deduplication technology, or will the company maintain a menu of options?

Where does this leave other data reduction specialists, such as GreenBytes, Exar and Permabit, which recently announced an embeddable version of its storage optimization technology (see “Permabit deduplicates primary storage”)?

And how will the deduplication kingpins – NetApp and EMC – react?

For now, more questions than answers.

Related blog posts:
“Ocarina: 4 dedupe predictions, and an OEM strategy” (June 22)
IBM to acquire Storwize for $140 million? (June 14)
And here's a blog post on the Dell-Ocarina acquisition from David West, CommVault's vice president of marketing and business development: http://news.commvault.com/DavidWest/000049_A_Complementary_Approach_to_Deduplication.asp

InfoStor + Enterprise Storage Forum = Storage Synergy

2010-07-16T08:17:00.000-07:00

July 16, 2010 – Many of you are aware that InfoStor is now part of the Internet.com network of websites, which includes 12 sites for IT professionals and 4 sites for developers. Also part of that network is Enterprise Storage Forum which, like InfoStor, focuses solely on the data storage market.

As a result, we are now exploiting the synergies between the two sites, primarily by sharing content. Sometimes we’ll cover breaking stories and trends separately and sometimes we’ll link between the sites to repurpose content.

The net effect for visitors to both sites is a significant increase in storage-specific content.

As part of this move, my long-time colleague and compadre Kevin Komiega has assumed primary responsibility for Enterprise Storage Forum, while I will continue to focus primarily on InfoStor. But we will both be producing content for the two sites.

In addition to exploiting synergies between Infostor and Enterprise Storage Forum, we will continue to share content with other Internet.com IT sites to bring you a wider variety of content, albeit always with the storage professional in mind.

Here’s a recent example from Datamation:
Storage tiering with automated data migration

Feel free to contact us:
Dave Simpson: dsimpson@internet.com
Kevin Komiega: kkomiega@internet.com

Related blog:
Infostor.com is heading to Internet.com

It may be a slow boat to converged networks

2010-07-13T19:02:00.000-07:00

July 14, 2010 – The hype behind converged networks (or converged fabrics) is heating up, leading one to believe that we’re on the cusp of this game-changer in IT infrastructure. However, I think this is going to be a very slow transition that will take place in two distinct phases.

First, IT organizations will migrate to 10Gigabit Ethernet (10GbE), which is already well underway. As they do so, the underlying equipment (network adapters, switches) may in fact support a converged fabric (Ethernet LAN + Fibre Channel SAN via FCoE) but most users won’t take advantage of that functionality in the first phase of the migration.

For now, end users are primarily concerned about network performance, particularly in I/O-intensive environments such as virtual servers and, soon, virtual desktops (see “Storage considerations for VDI implementations,” by the Evaluator Group’s Russ Fellows and John Webster).

Faster Ethernet is priority #1, not truly converged fabrics. Remember, almost 90% of the server network ports in a data center are Ethernet.

This a central point in an InfoStor blog post from Frank Berry, CEO and senior analyst with IT Brand Pulse (see “3G C-NICs Address Mass Migration to 10GbE”).

In an end-user survey conducted by IT Brand Pulse, more than 70% of the users said they were either too busy to investigate convergence or were not planning to converge their networks (although that does leave 30% with at least a plan to do so).

According to Frank’s blog: “LAN and SAN convergence is happening today, but it’s deployment of LANs and iSCSI SANs that are making it happen. In 2010, less than 100,000 FCoE-enabled host network ports will be deployed, while over 1 million iSCSI host ports will be installed.”

Migration to 10GbE will go quickly, but the transition to a truly converged, single-wire network will go much more slowly.

One reason for this is not technology-related but, rather, cultural. More than ever, a converged network will require very close cooperation between the network and storage teams, which in some cases is like asking the Red Sox to merge with the Yankees.

Who’s in charge of product evaluation and purchasing? Who will “own” the converged network?

These factors, perhaps more than technology-related issues, could delay adoption of converged networks.

Related article:
Fabric convergence: Changing the nature of fabric attach

EMC to buy Greenplum for “big data” private clouds

2010-07-06T19:09:00.000-07:00

July 6, 2010 – EMC announced today that it plans to acquire Greenplum for an undisclosed amount of cash. The deal is expected to close by September.

For the news story, see “EMC acquires data warehousing vendor Greenplum.”

I had never heard of Greenplum, but after a quick look at their site I gleaned that the company is a data warehouse and analytics vendor. However, EMC wasn’t about to lose an opportunity to fly the cloud flag in its press release on the acquisition announcement, according to which: Greenplum’s “disruptive data warehousing technology [is] a key enabler of “big data” clouds and self-service analytics.” That’s almost poetic.

EMC branching out beyond its storage-centric roots is, of course, nothing new. And the Greenplum acquisition seems to make more sense than the Documentum and RSA acquisitions originally did, although it may not be quite as impressive as the VMware and Data Domain acquisitions are proving to be.

Greenplum has a shared-nothing, massively parallel processing (MPP) architecture for data warehousing and analytical processing, delivered on a virtualized x86 infrastructure (unlike, oh, Oracle’s Exadata).

EMC plans to meld Greenplum’s architecture with its own private cloud vision/architecture. After the acquisition, Greenplum will become part of a new Data Computing Product Division at EMC.

On the surface, this just looks like a solid acquisition at what I assume to be a good price. But to get an idea of what EMC is really up to here, read Chuck Hollis’ blog: “EMC to Acquire Greenplum.”

Noting that the Greenplum architecture is based on a virtualized x86 infrastructure, Chuck notes that: “All of EMC’s storage products are x86 based – this creates a potential pathway where data intensive functions could be run closer to the information, freeing the compute farm to do what it does best.”

“The vast majority of these data warehouses contain sensitive information and produce analysis that is either confidential or otherwise privileged. Think information security and data loss prevention, for example.”

“Much of the higher-order analysis produces rich content that frequently drives a collaborative workflow among knowledge workers. Think about EMC’s assets in content management, collaborative workflows and case management.”

“And . . . let’s not forget the seductive appeal of running on-demand business analytics as yet another fully virtualized workload using dynamic resources in a private cloud model. Like running on a good-sized Vblock, for example.”

Is this a competitive reaction to Oracle? No, according to Hollis. And it won’t disrupt EMC’s relationships with vendors such as Sybase, SAP, Microsoft and ParAccell (Greenplum competitors, as are vendors such as Netezza and Teradata).

It’s impossible to opine about the sagacity of an acquisition if you don’t know how much a company paid, but I’m guessing that EMC (NYSE:EMC) got a good deal here. And it gives them a great opportunity to demonstrate unique use cases for their private cloud vision, not to mention the opportunity to sell a lot of hardware because the data warehouses that Greenplum plays in are measured in petabytes.

Greenplum customers include NASDAQ OMX, NYSE Euronext, Skype, Equifax and T-Mobile.

EMC pulls the plug on Atmos Online

2010-07-02T11:38:00.000-07:00

July 2, 2010 – EMC has shuttered its Atmos Online cloud storage service, at least as a commercial service for end users. The company is shifting the technology to its Atmos-based cloud storage service provider partners, which currently include AT&T, Hosted Solutions and Peer 1 Hosting.

And I’m sure there will be many more now that partners won’t have to compete directly with EMC.

On its Atmos Online site, EMC directed customers to its Atmos cloud service provider partners.

Going forward, Atmos Online will be available strictly as a development environment, rather than a paid subscription service.

In my POV, Atmos Online was always a POC anyway.

It was a proof-of-concept designed to lure services providers at a time when the cloud storage concept was still a bit sketchy (although some would argue that it’s still sketchy). Atmos Online was launched a little more than a year ago.

The losers in this announcement are existing customers of Atmos Online (although it’s unclear how many of those there actually were), who will have to shift to one of EMC’s partner’s services or migrate to a non-Atmos cloud storage service.

The winners, of course, are EMC’s Atmos cloud storage partners, which no longer have to compete with EMC. Likewise, EMC no longer has to compete with those partners. It’s a win-win on that front. In fact, on its Atmos web site, EMC is “strongly encouraging” its existing Atmos customers to migrate to one of its partners.

Atmos Online as a commercial service for end users apparently never gained enough ground for EMC to justify the costs associated with hosted services. There’s more money in selling the technology and equipment to third-party providers that, at least in the case of AT&T, are better equipped to handle -- and make money from -- public cloud storage services. (One of EMC’s other partners – Hosted Solutions – launched its Atmos-based Stratus Cloud Storage service last month, which is based on TwinStrata’s CloudArray technology.)

Besides, Atmos Online wasn’t EMC’s only cloud storage play for consumers; the company still has Mozy and online storage services provider Iomega.

The shuttering of Atmos Online should be seen not as a failure on the part of EMC but, rather, as another prescient and tactical move by the company.

PMC girds for channel battles, opportunities

2010-06-24T09:39:00.000-07:00

June 24, 2010 – PMC-Sierra completed its acquisition of Adaptec earlier this month, and is now fine-tuning its game plan for entering the channel. PMC acquired Adaptec’s channel storage business, including its RAID hardware and software products.

PMC-Sierra paid approximately $34 million for Adaptec, which at one time (about ten years ago) had annual revenues in the $800-million ballpark.

In case you’re not on the chip side of the storage industry: PMC-Sierra is a fabless semiconductor company that originally focused on telcom chipsets but has since branched out into many other industries. The company entered the storage market about nine years ago with Fibre Channel chips, but has more recently focused on SAS chipsets. PMC’s enterprise storage business is now the company’s largest business segment.

Until the Adaptec acquisition, PMC-Sierra focused primarily on semiconductors for OEMs. But in addition to Adaptec’s RAID product line, PMC now has access to Adaptec’s extensive channel partner network.

“We’ll sell Adaptec’s products through their channel, but the acquisition also gives us an avenue to sell PMC products more broadly, beyond our OEMs,” says Mark Stibitz, vice president and general manager of PMC-Sierra’s enterprise storage business.

On the storage semiconductor front, PMC competes primarily with LSI and, to a lesser degree, vendors such as Marvell, Emulex, Intel and others.

On the RAID adapter/controller front in the channel, PMC will continue to compete most directly with LSI (which is the #1 vendor in the x86 RAID channel market, followed by Adaptec at #2), as well as other vendors such as HighPoint, Promise Technology, Areca and Atto Technology.

In other words, the PMC-LSI battle will turn into a war.

Meanwhile, LSI has expanded its channel presence by offering its white box partners external RAID building blocks (see “LSI expands in channel with external RAID”).

The channel-based x86 RAID market is estimated at $200 million/year.

Adaptec has been primarily using Intel’s RAID-On-Chip (ROC) ASICs in its 3Gbps SAS products, and will continue to develop and support the Intel-based products. But when the company makes the transition to 6Gbps SAS – its next major product introduction – it will use PMC-Sierra’s 6Gbps SAS chips, according to Jared Peters, formerly with Adaptec and now vice president and general manager of PMC’s channel storage division. The company is expected to release the PMC-based 6Gbps SAS products in the first quarter of 2011.

As a result of PMC’s acquisition, the vendor formerly known as Adaptec has changed its name to ADPT Corp.

Related articles from InfoStor:
PMC-Sierra to buy Adaptec’s channel storage business
LSI ships 6Gbps RAID array
Adaptec enables SSD + HDD RAID [MaxIQ SSD caching products]

Ocarina: 4 dedupe predictions, and an OEM strategy

2010-06-22T10:30:00.000-07:00

June 22, 2010 – A couple of recent news announcements/rumors have focused attention on data reduction (compression/deduplication) for primary storage, also referred to as primary storage optimization, capacity optimization, storage efficiency, and many other terms that may be confusing end users.

First, Permabit announced a software-only version of its data deduplication technology designed for storage hardware and software OEMs (see “Permabit deduplicates primary storage”). If Permabit succeeds in nailing a major OEM deal or two (and the company claims to have at least one in the works) this could be a game changer. For a second opinion on that, see Jeff Boles’ blog post.

Second, the rumors are still swirling around IBM’s alleged negotiations to buy primary storage compression specialist Storwize (see “IBM to acquire Storwize for $140 million?”).

I recently spoke to Murli Thirumale, CEO at Ocarina Networks, which is a Storwize competitor and soon-to-be Permabit competitor. Leading up to a product/strategy announcement that Ocarina made today (see below), Murli offered four predictions on data reduction for primary storage:

--“Every major storage vendor will have primary storage deduplication in their portfolio by 2011, whether by building it or buying it. And by 2012 every major host vendor – including servers and virtualization platforms – will have data reduction built in.”

--“The compression vs. deduplication argument will go away as users realize that you need both. Each technology has advantages/disadvantages for different data types and access patterns.” [Ocarina’s technology combines compression and deduplication.]

--“The industry will eventually have solutions integrated across all tiers of storage, rather than point solutions for different tiers. You shouldn’t have to re-hydrate across tiers or workflows. Once you shrink the data, keep it shrunk.”

--“Deduplication is not a feature; it’s a business. The data deduplication market will exceed $3 billion within five years. And I think it will ramp faster on primary storage than it did in the backup market.”

Which sort of leads into the announcement that Ocarina made today. In a strategy similar to Permabit’s, Ocarina announced a software-only, ‘embeddable’ version of its ECOsystem data reduction technology targeted at OEMs. (Ocarina’s existing data reduction technology is delivered as a software-hardware appliance.)

Ocarina may not be a household name, but note that its partners/resellers include, among others, HP, EMC, Hitachi Data Systems and BlueArc, although Ocarina didn’t make any OEM announcements for its embeddable software today. (It takes a long time to qualify and integrate technology like this into a vendor’s existing stack.)

One differentiator that Ocarina may have is a content-aware data reduction technology with a combination of data compression and deduplication. In addition, Ocarina CEO Thirumale says that the OEM version of the company’s technology can be applied anywhere in the IT infrastructure – from primary storage devices to archiving platforms – and on any type of data (e.g., files or blocks), enabling data to remain in compressed/deduped form throughout its lifecycle. In addition, the software can be implemented in a post-process, in-band or hybrid approach.

In other data deduplication news today, GreenBytes announced its entry into the European market with a variety of reseller partnerships. GreenBytes packages its data deduplication software in inline GB-X appliances that combine solid-state disk (SSD) drives and 2.5-inch SATA drives in what the company refers to as a Hybrid Storage Architecture (HSA). GreenBytes’ block-level deduplication can be used in NAS or SAN environments.

"SSD week" recap

2010-06-18T09:34:00.000-07:00

June 18, 2010 – I don’t think it’s purely coincidental, but there was an uncharacteristic amount of rapid-fire announcements related to solid-state disk (SSD) drives this week. Three SSD startups launched (with two based in Israel). There was one SSD-related acquisition. And one vendor trumpeted the now familiar tune, “MLC SSDs are as good as SLC SSDs.”

In short, four interesting SSD announcements in the course of three days. And all four articles covering those announcements made the Most Popular Articles list on infostor.com this week. The industry analysts must be right about increased end-user interest in SSDs, although 39% of infostor.com visitors have no plans for using SSDs because they’re still too expensive (see below).

A quick recap:

At the high end of the announcements, Kaminario launched with the introduction of the K2 (meant to conjure up an image of the mountain, not the skis). See “Startup claims 1.5 million IOPS on RAID array.” An entry-level configuration starts at $200,000 for 300,000 IOPS and 1TB of DRAM, but the system can scale to millions of dollars and IOPS. Since its system is based DRAM technology, Kaminario will compete most directly with vendors such as Texas Memory Systems (which has been selling DRAM devices since disco was popular) and Violin Memory.

Speaking of which, Violin bought Gear6 this week. You might (but probably not) know Gear6 as a supplier of a souped-up Memcached distribution, but that’s not why Violin plucked them. Gear6 also has NFS caching software. If Violin can orchestrate that code into its SSD arrays it will give Violin an entry into the lucrative NAS acceleration market (see “Violin to acquire Gear6 for caching software”).

Anobit (add another bit) was another SSD startup that launched this week, with an MLC-based array that the company says provides the performance and reliability (“endurance” in SSD parlance) of more expensive SLC SSDs. You’ll see a lot of similar claims in the months ahead, as the mathematicians at SSD vendors have come up with a variety of tricks to mask the inherent drawbacks of inexpensive MLC flash NAND technology. Anobit’s secret sauce is its Memory Signal Processing technology (see “Anobit claims MLC SSDs rival SLC SSDs”).

And on the PCIe front, Virident launched its tachIOn SSDs. (Weirdly enough, when you type “tachIOn” in Word it automatically gets changed to “tachyon” which, by the way, is a hypothetical subatomic particle that moves faster than light, although most of us old-timers think of it as a Fibre Channel controller chip). Virident is going head-to-head with Fusion-io, essentially trying to beat them at their own game (see "Virident ships SLC SSDs for PCIe").

Despite the rapidly falling prices of flash memory and SSDs, many end users still say SSDs are too expensive. In an infostor.com QuickVote survey conducted earlier this year, 24% of the respondents had planned to deploy enterprise-class SSDs in the first half of this year; another 26% planned to buy them in the second half of the year; but 49% had no plans to deploy SSDs, with 10% citing insufficient reliability and 39% saying SSDs were still too expensive.

If you’re really interested in SSDs, consider attending the Flash Memory Summit, August 17 – 19 in Santa Clara.

IBM to acquire Storwize for $140 million?

2010-06-14T17:03:00.000-07:00

June 14, 2010 (Updated June 15) – Rumors swirled this week around speculation that IBM is in talks to acquire startup Storwize, which specializes in data compression/reduction for primary storage, for a reported $140 million. I wasn’t able to confirm the rumor, but I have no doubt it’s true (the talking part, although not necessarily the acquisition part).

The potential deal makes sense for a number of reasons:

One: Data reduction for primary storage is going to take off big time this year. Heavyweights EMC and, more so, NetApp have capitalized on this trend with data deduplication techniques for data reduction. IBM has data deduplication for secondary storage via its acquisition of Diligent Technologies, but has been out of the picture when it comes to data reduction for primary storage. And buying Storwize (already an IBM partner) will get Big Blue into the game faster than developing the technology on its own.

Although it’s based on compression, not data deduplication, Storwize’s technology (Random Access Compression Engine, or RACE) can be used in conjunction with data deduplication products such as those from EMC and NetApp.

Two: IBM has plenty of experience acquiring Israeli companies. In addition to Diligent, IBM acquired Israel-based XIV in 2008. (Storwize’s R&D facility is in Israel, although the company now has U.S. headquarters.)

Three: IBM has already been reselling Storwize’s STN appliances, and has jointly presented Webcasts with Storwize and produced white papers legitimizing Storwize’s various claims, including the claim that its compression appliances can reduce capacity by 50% to 90% without negatively affecting performance.

Four: It hasn’t been a secret that Storwize has been shopping itself for some time. Getting acquired makes more sense than trying to go it alone in the primary storage optimization market, which will be ruled by the big boys – not startups (just my opinion, but I’m right.)

This acquisition would be interesting on a number of fronts.

--Would it lead to HP acquiring partner Ocarina Networks, a Storwize competitor?

--And let's not forget about other players in the primary storage optimization space. Exar (via its acquisition of Hifn) has data reduction technology that combines data deduplication and compression and handles those functions at the ASIC level. And GreenBytes has inline deduplication ttechnology that can be applied to NAS or SAN environments.

--Could IBM’s offer lead to a bidding war? Perhaps between Big Blue, EMC, NetApp and/or HP?

Further fueling the flames in this market was Permabit’s announcement of its Albireo technology last week (see “Permabit deduplicates primary storage”). Albireo is a software-only deduplication technology designed specifically for primary storage, and the company claims to have a number of design wins, with at least one rumored to be with a big vendor. Who could that be?

This could get even more interesting than last year’s NetApp-EMC bidding war for Data Domain.

Related articles:
Data reduction for primary storage: Benefits and options
Storwize upgrades compression appliances
Infineta unveils deduplication for inter-data-center traffic
GreenByes launches entry-level dedupe appliance
Nexenta debuts ZFS-based in-line deduplication

Startup claims 1.5 million IOPS on RAID array

2010-06-14T08:32:00.000-07:00

June 14, 2010 – Not so long ago, performance claims of one million IOPS seemed impressive (and suspect, and irrelevant). But 1.5 million IOPS?!

Startup Kaminario launched today with the introduction of its aptly-named K2 storage system. An entry-level configuration is spec’d at 300,000 IOPS and a high-end configuration delivers 1.5 million IOPS, or 16GBps of throughput, according to company officials.

There’s only one way to get that level of performance, and it ain’t short-stroking. In fact, it’s not even SLC NAND flash SSDs. You have to go with the fastest, most expensive type of storage device – DRAM.

Kaminario’s K2 RAID array is officially dubbed the K2 Performance Enterprise Data Appliance. The blade-based, scale-out architecture has two key building blocks: ioDirectors and Data Nodes.

The ioDirectors interface with hosts via 8Gbps Fibre Channel ports and, together with kOS software, are responsible for directing all read/write I/O requests. The Data Nodes store all data in DRAM (up to 288GB per node), although each node also includes two mirrored SAS disk drives, which are used only for data backup. The Data Nodes appear as a single logical unit. Users scale performance by adding ioDirectors.

The entry-level configuration that provides 300,000 IOPS and 3.2GB of throughput includes two ioDirectors. The 1.5-million IOPS configuration includes eight ioDirectors. The system has equal performance for both random and sequential I/O operations, according to Kaminario product manager Arik Kol.

Not surprisingly, all that performance comes at a steep price. The entry-level configuration (300,000 IOPS) with 1TB of DRAM is priced at $200,000. Yes, $200,000 per TB.

However, why go with a startup? Kaminario isn’t the first company to build super-fast storage systems with DRAM. Texas Memory Systems, for example, has been selling DRAM SSDs for decades.

If you’re in the market for systems of this caliber and cost, I’m sure you have the wherewithal to do in-depth evaluations, and there are many factors to consider, but let’s take a cursory look at some performance-price-capacity comparisons:

Kaminario is charging $200,000 for 1TB of DRAM capacity and 300,000 IOPS of performance.
You can buy two Texas Memory RamSan-440 DRAM arrays with 1TB of capacity and 1.2 million IOPS for $280,000. That’s 4X the performance for an extra $80k.

Kaminario isn’t the only vendor making solid-state memory news this week. Stay tuned to infostor.com’s News & Analysis section on Tuesday for info about two startups with interesting SSD plays – one with an SLC-based PCIe device, and another with an MLC-based SSD that the company claims rivals SLC SSDs in endurance – at a fraction of the cost.

Storage software market: CommVault grows revenues 25% y-o-y

2010-06-11T14:36:00.000-07:00

June 11, 2010 – Revenue performance in the storage software market was lackluster in the first quarter of this year, although the market did exceed $3 billion – a 7.2% growth over the same quarter last year. Given the sorry state of IT spending a year ago, that qualifies as lackluster.

In contrast, the external disk array market posted year-over-year growth of 18.8% in the first quarter (see “Disk array SmackDown: NetApp vs. IBM, Dell vs. HP”).

With a few exceptions, storage software vendors posted modest revenue growth in Q1 2010 vs. Q1 2009: EMC (13.7% revenue growth), IBM (11%), NetApp (8.1%), CA (7.2%) and HP (8.7%). The only vendor posting negative growth was Symantec, with a slight 0.5% drop.

EMC topped the list with a 23% market share on Q1 revenue of $696 million, followed by Symantec (17.5% market share), IBM (14.2%), NetApp (8.3%), and CA and HP in a virtual tie with 3.9% and 3.5% market shares, respectively.

But the most impressive numbers came in the data protection and recovery segment of the overall storage software market, where EMC racked up revenue growth of 46.6% and CommVault, although it didn’t crack the top six vendors list, increased revenue by an impressive 24.9% in the first quarter vs. the same period a year ago.

For IDC’s full press release and more stats, see “Storage Software Market Delivers Good Growth and Continues Signs of Recovery.”

Disk array SmackDown: NetApp vs. IBM, Dell vs. HP

2010-06-09T15:35:00.000-07:00

June 9, 2010 – In the external disk array market, it’s surprising how little changes in terms of the top five vendors’ market shares quarter-to-quarter or even year-to-year. The leading vendors almost always occupy the same rungs on the ladder. However, based on IDC’s Q1 2010 stats, market shares appear to be shifting.

Of course, EMC held on to its #1 spot in the first quarter with a 24.6% market share on revenue of $1.22 billion. But the rest of the race is tightening.

For example, for the first time NetApp pulled into a virtual dead heat with IBM for the #2 spot in the external disk systems market. IBM had an 11.7% market share, while NetApp had an 11.1% share. Statistically, IDC considers that to be a tie. Compared to Q1 2009, IBM slipped 0.5% in terms of market share while NetApp gained 2.3 points, leapfrogging both Dell and HP, which were in the #3 and #4 spots in the previous quarter.

If NetApp’s ascendancy continues at this clip, the company could eclipse Big Blue. And if NetApp’s first quarter and year-end earnings are any indication (see “NetApp wows Wall Street, doubles quarterly profits”), I think they will.

Rounding out the top five, HP slipped a bit in the first quarter, to a 10.2% market share, followed closely by Dell with a 10.1% share. Dead heat. And I predict that Dell will overtake HP in the next quarter because the revenue differential between the two was only $6 million in the first quarter ($506 million vs. $500 million).

Hitachi Data Systems and Oracle/Sun failed to crack the top five.

NetApp also gained market share in the NAS arena over the last quarter with a 26.9% share (vs. 20.2% in the last quarter), coming in second to EMC’s 45.1% market share (down from a 50.5% chunk in the last quarter).

Overall, the NAS market grew a whopping 44.6% year-over-year.

Equally impressive, the iSCSI SAN market posted 45.7% revenue growth in Q1 2010 vs. Q1 2009. Dell led the iSCSI market with a 36.9% revenue share, followed by NetApp with a 14.4% slice.

For IDC’s press release and more stats, see “Disk Storage Systems Market Rebounds to Double-Digit Growth Across All Segments in First Quarter.”

Cloud storage and unified computing: Beware vendor lock-in

2010-06-04T08:45:00.001-07:00

June 4, 2010 – Vendor lock-in is always a bad thing, but in the case of cloud computing, cloud storage and so-called unified computing, it could be much worse.

Vendor lock-in with, for example, RAID arrays or backup software is a mild form of lock-in. You’re not exactly shackled and chained in an iron-clad tank underwater. Although it might be painful, time-consuming and costly, IT shops migrate data from Vendor A’s disk array to Vendor B’s disk array all the time.

Migrating from one cloud provider (whether they’re providing cloud computing or cloud storage services) to another may be much more difficult. There are options, however. Some vendors offer tools for migrating from one cloud provider to another. Nasuni is one example, and here’s the Nasuni team’s (not exactly commercial-free) blog on this subject: “The Cloud’s Little Secret: Vendor Lock-In.”

And the Storage Networking Industry Association (SNIA) is working on standards that promise portability between cloud storage providers (see “SNIA develops standards for cloud storage.”) However, it’s unclear whether SNIA’s standards will succeed and whether the cloud market share leaders will support those standards.

But these potential solutions to cloud storage lock-in beg the question: Why would you want to move from one cloud storage provider to another?

Nobody’s rushing to put their production data in a public cloud; rather, they’re contemplating putting their backup/secondary/archive data in the cloud. And if cloud storage providers meet their SLAs (and that’s a good bet with the large providers because those SLAs are relatively non-demanding) and they keep their prices in the pennies-per-GB range (which they will due to intense competition in this space), then it would be an extremely rare case where you would have any need to switch providers.

So the whole issue of migrating between cloud storage providers (which apparently has become a hot topic in the cloud community) seems to be a moot point, at least until companies start putting production data in the cloud.

Now, vendor lock-in in the context of unified computing is a different matter. If unified computing takes off, lock-in will not just be something to avoid; it will be a way of life in IT land.

But I think it’s quite possible that unified computing may backfire on the vendors that are pushing it. In an age of unified computing lock-in, IT shops may be more inclined toward non-unified-computing vendors. That means the “other” vendors in the market share pie charts.

The potential for vendor lock-in in unified computing may drive IT away from their existing vendors. Instead of cementing the market leaders’ positions, unified computing could finally be the trend that works against the big guys.

Maybe I should have titled this post “Lock, stack and barrel.”

Anyway, here’s some more info on unified computing and the potential of vendor lock-in: “Weighing the pros and cons of unified computing.”

VDI: The next big storage challenge

2010-05-28T15:40:00.000-07:00

May 28, 2010 – Virtual server administrators and their storage brethren know full well that to reap all the benefits of a virtualized environment you need to clear a lot of storage hurdles. And InfoStor readers know that there are plenty of storage products and strategies to get the job done, whether the challenge is performance or data protection.

But fine tuning your storage environment to maximize your virtual server environment may seem like a walk in the park compared to performing the same task in a virtual desktop infrastructure (VDI).

As openBench Labs CTO Jack Fegreus put it in a VDI-related lab review we recently posted (see below):

“IT may well find that the distributed computing sea change in server virtualization will be dwarfed by a rapidly growing tsunami in virtualized desktops. On the client side, the corporate pool of desktop and laptop PCs has long been the uncharted sea of IT. And the sheer number of client devices makes the over-provisioning of CPU and storage resources for these systems a huge capital expense.”

Gartner estimates that, so far, only about 500,000 desktops are running on VMs – a fraction of the $150 billion PC market. However, Gartner predicts that IT will migrate 30% of its installed based of PCs to VMs by 2014. If that happens, the ranks of VMs running client systems will swell to more than 18 million.

According to Fegreus, best practices call for deploying desktop VMs four to eight times more densely than server VMs (which is possible because of the sporadic nature of desktop usage). This is great in the context of cost savings, but dense deployment also leads to resource utilization storms involving I/O, storage, CPU and memory resources.

“What makes storage so important are the inextricable links to the capital and operational expenses that IT must restructure to maximize the ROI of a VDI initiative,” according to Fegreus.

To explore storage issues in a VDI context, openBench Labs set up a test scenario with off-the-shelf servers, a VMware ESX 4 hypervisor with lots of other VMware software, and backup software from Veeam, all anchored by a Fibre Channel disk array from Xiotech.

Check out the full lab review: “VDI: For virtual desktops, latency matters.”
http://www.infostor.com/index/articles/display/5907788482/articles/infostor/openbench-lab-review/2010/may-2010/vdi_-for_virtual_desktops.html

Hardly light reading for the holiday weekend, but if virtual desktops are in your future it’s worth the click.

More musings on NetApp's earnings

2010-05-27T16:36:00.000-07:00

May 27, 2010 – The investment community was still atwitter today after NetApp’s earnings report yesterday which, among other eye-openers, included fourth quarter revenue of $1.17 billion, fiscal year revenue of $3.93 billion, and profits of 50 cents a share, excluding items (or “adjusted income”), which was well ahead of analysts’ predictions of 44 cents per share (see “NetApp wows Wall Street, doubles quarterly profits”).

NetApp (NSDQ: NTAP) shares were trading at $38.06 at one point today, up 17.36% and representing a three-year high, despite many financial analysts putting a “hold” recommendation on the stock yesterday.

Disclosure: I do not, and never did (unfortunately), own NetApp stock. That’s partially due to journalistic ethics, and partially because I’m stupid.

Another interesting tidbit that I failed to mention in our news coverage was that 71% of NetApp’s revenue came from indirect (channel) sales, and that Avnet/Arrow accounted for 27% of total revenue.

In a report on NetApp’s earnings, Canaccord/Genuity analyst Paul Mansky noted that “NetApp is firing on all cylinders and has been for three to four quarters.” However, in the “investment risk” portion of his report, Mansky reiterated his opinion that:

“Longer term, it is unclear how NetApp plans to maintain its current level of relevance as the market consolidates to vendor-centric vertical stacks. The company’s sole OEM partnership, IBM, has not evolved as planned. Absent a greater breadth of solutions, partners and services, NetApp could be relegated to a niche vendor in the data center of tomorrow.”

Which turns the old “Who will acquire NetApp?” question into perhaps a more relevant query: “Who will NetApp acquire?”

NetApp is about 18 years old, and to paraphrase one of the financial analysts: NetApp is 18, but still growing like it’s an adolescent.

Realizing NetApp’s age led me to a strange, but true, observation. I only have a couple professional memories from a period almost 20 years ago, but one is my first meeting with NetApp (Network Appliance at the time) execs when they introduced their first product. We had written some articles about Auspex, and the Network Appliance propeller heads wanted to show us their better mousetrap.

The fact that this meeting was one of only a couple that I can remember from my professional life 20 years ago can be attributed to either (a) my professional life was rather uneventful at the time, (b) my brain cells have eroded in accordance with my age and beverage preferences, or (c) I was extremely astute and prescient and recognized immediately that this “appliance” thing they had would truly shake up the storage industry. Place all bets on (a) or (b).

My thought at the time: What respectable IT person would buy something that the vendor called an “appliance?” Moreover, who would buy from a vendor that actually incorporated that word in its company name? At the time, an appliance conjured up an image of a toaster, or a Cuisinart. (Remember: This was back when a SAN was called a VAXcluster.)

The rest, as they say, is storage history.

Cloud storage is due for a shakeout

2010-05-21T16:31:00.000-07:00

May 21, 2010 – I realize that it may seem ludicrous to predict a shakeout in a market that hasn’t even taken off, but I’m afraid that’s what’s in storage for the cloud storage market.

From where I sit (an editor’s desk, or the receiving end of the PR Gatling guns) there seems to be a startup getting into cloud storage every week. And since this has been going on for well over a year, those dozens of cloud storage providers from last year have probably blossomed into hundreds by now.

IDC predicts that cloud storage will grow from 9% of the overall IT cloud services market in 2009 to 14% in 2013. In dollar terms, that means revenues from cloud storage of $1.57 billion in 2009 to $6.2 billion in 2013.

There would appear to be more than enough room for dozens (hundreds?) of players in a market of that size, right? Wrong. There’s only room for a handful of profitable RAID vendors, just to take one example, and the RAID array market is way bigger than the cloud storage market.

What are these legions of cloud storage startups smoking? Or shooting? How can they possibly expect to turn a profit? There are a number of problems:

If I was going to start a storage company (pity the fool), I’d rather be a RAID vendor than a cloud storage provider. In RAID, at least you can undercut EMC and the boys on price. Maybe even technology. You’re not going to be able to that with cloud storage.

Cloud storage vendors already provide storage at pennies (ok, nickels in some cases) per GB per month. What are you going to do – Provide it for drachmas per GB? Not much profit in that business model. A better bet would be to start a disk drive manufacturing business!

There are a number of other obvious impediments for small cloud storage providers (small providers, not clouds).

Look who’s already in the cloud storage business.

Amazon didn’t invent the term ‘cloud storage,’ buy they’re almost synonymous with it.

And earlier this week, Google appeared to put its toes into cloud storage (see “Google Launches Online Data Storage Service for Developers” on Enterprise Storage Forum). After some free initial capacity, pricing appears to be 17 cents/GB/month, plus 10 cents/GB for uploading and 15 cents/GB for downloading.

Sure, Google’s cloud storage service is just for developers now, but if cloud storage truly is a billion dollar market you know that Google will chase Amazon.

And some people think that Microsoft will get into this space (google “windows azure”). Again, mostly for developers, but why stop there?

And then there’s EMC (Mozy, Atmos), the storage vendor that every storage vendor just loves competing with.

And cloud storage consumer kings such as Carbonite, who are moving up the food chain into SMB land.

The list of impediments to succeeding in the cloud storage market goes on and on, just like the list of vendors entering the space.

Don’t get me wrong: Cloud storage is a great thing (no matter how you define it, which can be like trying to nail a blob of mercury to a ceiling of Jell-o), but there just won’t be room for all the vendors clamoring for a piece of the pie.

So, if you’re a cloud storage startup and you still have some capital left . . . Wanna start a RAID company?

Cloud storage news:
ParaScale builds clouds for machine-generated data
InMage targets cloud providers
OpSource launches Cloud Files backup and archive service
Brocade, EMC lay groundwork for private clouds
CTERA offers cloud storage platform for MSPs

Brocade’s earnings report is boring

2010-05-20T16:43:00.000-07:00

May 20, 2010 – Brocade’s report today on its fiscal second quarter earnings was boring, at least compared to, say, Dell’s dazzling report today, HP’s home run earlier this week, or even to Brocade’s bubbly Q1 results.

The best thing you could say about Brocade’s earnings was that there were earnings. The company turned a net profit of $22.4 million in the second quarter. That compares to a net loss of $66.1 million for the same period last year.

Brocade (NSDQ: BRCD) reported Q2 revenues of $501 million, which was 1.1% off its Q2 2009 revenue. That’s what was so surprising: There wasn’t much change in this period vs. the same period a year ago.

For example, if you break Brocade’s business into three major segments, the SAN (Fibre Channel) business accounted for 56% of the company’s total revenues in Q2 2010 vs. 58% in Q2 2009. Global services represented 18% of total revenues, vs. 17% last year, and Ethernet accounted for 26%, vs. 25% in Q2 2009.

The highlight of the Fibre Channel king’s revenue report was . . . Ethernet. Brocade’s Ethernet business posted a 34% gain over the first quarter of this year (although only 2% year-over-year). In fact, Q2 was Brocade’s highest revenue quarter for Ethernet ($156.7 million in products and services) since the company acquired Foundry.

The other bright spot was a surge in Brocade’s federal business, which soared 161% over Q1 revenues.

Brocade officials stuck to their previous prediction of full fiscal 2010 revenues in the $2.1 billion to $2.2 billion range.

Related articles:
EMC expands converged networking deals with Brocade, Cisco
Brocade, EMC lay groundwork for private clouds
Brocade CNAs qualified by EMC, HDS, IBM, NetApp
Solid storage growth in HP’s Q2 report

Solid storage growth in HP’s Q2 report

2010-05-19T14:50:00.000-07:00

May 19, 2010 – Storage wasn’t the brightest spot in HP’s fiscal Q2 earnings report yesterday, but it was far from the darkest spot. In fact, there weren’t any dark spots.

The only laggards were software (down 1% from last year) and services (which grew only 2% from the previous year, to $8.7 billion).

Overall, HP (NYSE: HPQ) posted revenue for the second quarter of $30.8 billion, up 13% over the same quarter last year. Net earnings were $2.2 billion for the quarter, an increase of 28% from fiscal Q2 2009.

It’s difficult to put context on earnings these days because of the relative macro economic conditions today vs. a year ago, but by anyone’s estimates this was a stellar performance by HP in a still-tough climate.

In fact, it prompted The Motley Fool to pen a column comparing HP to IBM (see “HP is the New Big Blue”).

Unfortunately, HP does not get real granular in breaking down its product lines, but the Enterprise Storage and Server segment racked up $4.5 billion in total revenue, up 31% over the previous year. That segment was led by Industry Standard Server revenue, which increased 54%, while the Storage segment revenue increased a solid 16%, with the EVA product line up 3%.

Operating profit for the Enterprise Storage and Servers segment was $571 million (12.6% of revenue), which was up from $250 million (7.2% of revenue) in Q2 2009.

HP is clearly a bellwether for the overall IT industry, although not so much for the storage sector. However, NetApp and Brocade are bellwethers for the storage industry. Brocade (NSDQ: BRCD) will report results for its fiscal second quarter after the market closes tomorrow (Thurs., May 20), and NetApp (NSDQ: NTAP) will announce results for its fiscal fourth quarter next week (Wed., May 26).

Stay tuned to see if you’re in the right business or not as the market turns.

For comments on the results from Brocade’s and NetApp’s previous quarter earnings report, see my blog posts:
Brocade’s earnings a mixed bag
NetApp hit$ a home run

Consider open source deduplication

2010-05-18T09:40:00.000-07:00

May 18, 2010 – Some vendors (e.g., NetApp, EMC) give away data reduction (aka capacity optimization) technology, while other solutions for compression and data deduplication can get pretty expensive pretty quick. There’s another alternative: open source deduplication.

Vendors/organizations offering open source deduplication range from Oracle/Sun to Bacula, Nexenta and Zmanda to newcomer Opendedup.

I’m not very familiar with these products, but I recently read an article on open source deduplication on InfoStor sister site Enterprise Storage Forum.

Here are some quotes from some developers/execs involved with open source deduplication:

Opendedup developer Sam Silverberg: “SDFS has performance, scalability and cost advantages over many proprietary solutions, but I think proprietary solutions have some real technical benefits. Replication, source-based deduplication, and 24/7 phone support are not available today in open source solutions.”

Kern Sibbald, founder of Bacula.org and CTO of Bacula Systems: “Proprietary solutions are expensive and the source code is not available, so it is not easy to check or compare their performance. From the deduplication statistics that I have seen from proprietary vendors and those given by open source projects . . . I would say that the open source solutions stack up very well against the proprietary solutions.”

Chander Kant, CEO of Zmanda: “Over time, deduplication will become standard. Just like we have standard algorithms for compression today, there will be standard algorithms and formats for deduplication. And open source shines with standardization. So the future of deduplication is squarely with open source.”

Since I’m not familiar with these open source solutions, I don’t have an opinion (although I sincerely doubt that “the future of deduplication is squarely with open source.”) Then again, although the article doesn’t provide stats, it appears as though a lot of users are downloading this free code.

Read the full story on Enterprise Storage Forum: “Open Source Deduplication: Ready for Enterprises?”

Data deduplication news from InfoStor:
Quantum adds SMB mode to data deduplication lineup
Infineta unveils deduplication for inter-data-center traffic
EMC debuts Data Domain Global Deduplication Array

iSCSI vs. FCoE, part deux

2010-05-13T16:33:00.000-07:00

May 14, 2010 – It’s an age-old debate – iSCSI vs. Fibre Channel – but in light of all the hubbub around Fibre Channel over Ethernet (FCoE), the debate is heating up again.

If you follow the FCoE news, you’d think that converged networks based on FCoE are an IT inevitability. Eventually (it’s going to be a very slow adoption curve) that may be true, but I think it will be more in the Fortune 1000 space – where the benefits of FCoE will be most apparent – rather than in the SMB space, where low cost is still king.

FCoE provides the ability to run storage traffic over Ethernet (although you have to upgrade to 10GbE and Converged Enhanced Ethernet, or Data Center Bridging), but iSCSI also enables storage traffic over Ethernet – at a much lower cost. And, as with FCoE, you can preserve existing investments.

Running storage traffic over Ethernet is a no-brainer, but it doesn’t require FCoE. Cost-conscious SMBs may find iSCSI more palatable. And if part of your convergence and cost cutting revolves around virtualization, iSCSI (or NAS) may make even more sense. Plus, it’s a simpler and faster route to a converged network.

Of course, the old argument against iSCSI was, in part, related to performance. But that was when the argument centered on 1Gbps Ethernet vs. 4Gbps Fibre Channel. Now that iSCSI can run on 10Gbps Ethernet (as can Fibre Channel via FCoE), those performance-oriented arguments are crumbling.

But don’t take my word for it.

openBench Labs (which contributes lab reviews to InfoStor), recently set up an interesting test case by building a modest, inexpensive 10GbE iSCSI storage network that turned in some impressive performance results.

You’ll have to read the full review to put some perspective on the performance numbers, but openBench Labs CTO Jack Fegreus clocked average throughput of 5,000 I/Os per second (IOPS) with one virtual machine (VM), which was in line with what openBench Labs achieved with direct Fibre Channel access to the same disk array in previous tests. With two VMs, throughput scaled to about 8,200 IOPS.

Jack concludes his review with this observation: “Given these results, our 10GbE iSCSI configuration with QLogic Intelligent Ethernet Adapters should be able to support the installation of Microsoft Exchange Server on a VM with upwards of 5,000 mail boxes.” Quite sufficient for most SMBs. “The simplest and most immediate strategy for IT to begin leveraging 10GbE in a data center, especially when dealing with a virtual environment, is to begin implementing iSCSI.”

Jack’s 10GbE iSCSI network consisted of three Dell PowerEdge servers running Windows Server 2008 R2 and VMware ESX Server 4; iSCSI software from StarWind; dual-port 10GbE Ethernet adapters and 4Gbps Fibre Channel HBAs from QLogic; and a Xiotech Emprise 5000 disk array with two 4Gbps Fibre Channel ports. Performance was measured with Intel’s Iometer benchmark.

Check out the full review: “How to jumpstart SAN + LAN convergence.”

Related blog posts:
Virtual server SANs: FC vs. iSCSI vs. NAS
Intel, Microsoft top 1,000,000 IOPS in iSCSI tests
Video surveillance is a real sweet spot for iSCSI
NAS gains in virtual server environments

And you might want to consider attending this upcoming (May 26) SNIA Webcast: “iSCSI and New Approaches to Backup and Recovery.”

Buyer’s guide compares and rates 130 midrange arrays

2010-05-11T15:24:00.000-07:00

May 11, 2010 – Analyst firm DCIG recently released its 2010 Midrange Array Buyer’s Guide, which provides details and comparisons on more than 130 disk arrays from 30 vendors.

Each entry includes data on about 30 disk array/controller/software features, and includes weighted, relative scores and rankings for each array.

The buyer’s guide was compiled by DCIG founding analyst Jerome Wendt, with help from some IT end users.

I like Jerome’s content because, before becoming a storage analyst and writer, he was an IT professional – most recently spending five years at First Data Corp. as a senior storage engineer. As such, he brings an end user’s perspective to all of his content.

As he says in his intro: “I wanted to leverage my experiences at First Data so the Buyer’s Guide could alleviate one of the most time-consuming components of the midrange array buying decision – the information gathering and evaluation stage.”

The buyer’s guide is designed primarily for IT professionals that want to cut down on the time spent evaluating midrange arrays before they arrive at a short list that they can test in-house with specific applications. But array vendors might also be interested in the guide in order to make competitive comparisons. Likewise VARs and other channel professionals.

You can also use the report to come up with stats such as:

-56% of midrange arrays support thin provisioning
-Less than 10% of midrange arrays support deduplication of primary storage
-Less than 30% of the arrays support MAID technology

You can get more info on the Midrange Array Buyer’s Guide on the DCIG Web site.
(Pricing starts at $5,000.)

Better backups for VMware: VADP + CBT

2010-05-05T15:27:00.000-07:00

May 6, 2010 – The fantastic efficiencies of virtual servers can be compromised by poorly designed backup and recovery schemes. And storage specialists tasked with optimizing virtual environments (or the poor server specialists that inherited the job) know full well that backup and recovery can be the weak links in a virtual infrastructure.

The original solution to this problem –VMware Consolidated Backup (VCB) – is, in short, inadequate. (VCB is deployed in less than 10% of VMware shops, according to Wikibon estimates.) Virtually all backup/recovery software vendors have been addressing the problem, with or without VCB, but VMware has stepped up to the plate with some APIs and related technology that promise to significantly improve backup and recovery in VMware environments: vStorage APIs for Data Protection (VADP) and Change Block Tracking (CBT).

VADP, which is the replacement for VCB, integrates backup functionality via vStorage APIs, and CBT (available in vSphere 4.0) enables high-speed block-level incremental and differential backups.

At the moment, six vendors’ backup/recovery products have been certified with VADP:

CA (ARCserve)
EMC (Avamar)
IBM (Tivoli Storage Manager)
Symantec (NetBackup and Backup Exec)
Veeam (Veeam Backup)
Vizioncore (vRanger)

VADP and CBT are not standalone products to be used for backup; rather, they’re designed to be integrated into third-party backup applications.

For more information on VADP, start with this series of articles from Wikibon members: “What’s next for VMware backup” on the wikibon.org site.

And if you’re really interested in improving your virtual server backups, join us for an upcoming Webcast, “Backups That Work,” sponsored by Veeam. The link provides more information and a registration page.

What is cloudbursting?

2010-05-03T11:45:00.000-07:00

May 3, 2010 – The nice thing about ill- or loosely-defined terms such as cloud computing or cloud storage is that they lead to more confusing, yet catchy, terms. Examples: cloudstorming, cloudware, cloudsourcing, cloud spanning and cloudbursting. You can get definitions for all of those, and more cloud terms, on the Cloud Computing Wiki.

That wiki defines cloudbursting as “The dynamic deployment of a software application that runs on internal organizational compute resources to a public cloud to address a spike in demand.” Cloudbursting is typically used to address seasonal or event-based traffic peaks, and is closely related to cloud balancing.

For context, the wiki offers two references to cloudbursting, both from The 451 Group:

“ISV virtual appliances should underpin a new surge in cloud use followed by self-service mechanisms and enterprise connectors enabling organizations to ‘cloudburst’ to using cloud services.”
and
“In addition to direct sales to enterprises, going forward it hopes that extending out from private clouds to public ones – what we like to call ‘cloudbursting’ – will become a prevailing IT weather pattern and provide it with additional opportunities.”

Cloudbursting could be particularly advantageous in the context of storage and virtual servers.

If you’re confused, or need further clarification, join us for a Webcast this week, Wednesday, May 5 at 1:00 EDT, 10:00 PDT. “Server Technology to Cloudburst for Increased Flexibility and Lower Costs” Webcast presenters will include 451 Group analyst William Fellows and Eric Burgener, senior vice president of product management at InMage Systems.

Here’s the description:
Cloudbursting, or provisioning virtual servers on demand within a cloud infrastructure, provides end users with the ability to then failover applications to these newly provisioned VMs. This opens up a lot of new use cases for cloud infrastructure beyond just the recovery-oriented services available now. This Webcast will focus on the use cases across three different areas -- recovery, administration and production -- and look at what technologies will enable these new use cases for cloud infrastructure. The presentation will also explain what end users should be looking for from their cloud providers, and what benefits and cost savings they can achieve.

Register here.

And then there’s George Clooney’s take on a completely different type of cloudbursting in this YouTube clip from The Men Who Stare at Goats.

Video surveillance is a real sweet spot for iSCSI IP SANs

2010-04-28T11:03:00.000-07:00

April 28, 2010 – According to an end-user survey conducted by the Enterprise Strategy Group (ESG) late last year, 28% of the surveyed companies already use iSCSI. And if you factor in the companies that plan to use iSCSI, that number jumps to 52%.

As ESG analyst Mark Peters said in a blog post (see “iSCSI Adoption Continues its Upward Path”): “Not bad for a storage protocol that was dismissed by some as the equivalent of the poor kid from the IT housing projects a few years back.”

(ESG surveyed 1,488 companies ranging from 100 to more than 20,000 employees.)

According to Peters, adoption of iSCSI-based IP SANs is being driven largely by the surge in server virtualization deployments and IT budget pressures. But it’s also due to a widening of the use cases for iSCSI.

One of the hottest spots for IP SANs is in video surveillance. IMS Research recently completed a report, The World Market for Enterprise and IP Storage used for Video Surveillance, which predicts that the IP SAN market for video surveillance will grow at a CAGR of 66.7% between 2008 and 2013.

Drawing from the report (because I don’t know squat about video surveillance), IP video has traditionally been recorded on commercial off-the-shelf (COTS) servers, digital video recorders (DVRs) or network video recorders (NVRs).

NVRs are optimized for video surveillance, but they don’t work well in environments with lots of cameras. Same with digital video recorders (DVRs).

The COTS server approach is inexpensive and reasonably scalable, but the servers aren’t optimized for video surveillance.

IMS Research analyst William Rhodes says that the three key reasons why IP SANs will take over in the video surveillance market are:

--IP SANs go beyond COTS servers with feature such as RAID, failover and virtualization.
--iSCSI is less expensive than Fibre Channel SANs.
--IP SANs can be used to replace COTS servers and NVRs because storage suppliers have recently incorporated the server running the video management software (VMS), creating a single boxed appliance.

Most RAID vendors are going after the video surveillance market, but Rhodes cites the following vendors as examples of storage suppliers that are particularly focused on the video surveillance space, both of which offer “server-less” IP SANs: Intransa and Pivot3.

For more information on the report or the video surveillance storage market, contact William Rhodes or visit the IMS Research web site.

Virtual I/O, I/O, it’s off to work we go

2010-04-22T09:22:00.000-07:00

April 22, 2010 – You’ve virtualized a lot of your servers. You’re looking into virtualizing your desktops. It’s time to virtualize your I/O.

Faster processors, proliferating and dense VMs, and the need for speed and component consolidation are calling into question the traditional practice of loading up servers with more and more I/O cards, whether it’s Ethernet NICs, Fibre Channel HBAs, or other types of I/O adapters. There are a number of options.

If you’re an HP shop, you may be familiar with the Virtual Connect technology on HP’s c-Class BladeSystems.

If you’re an InfoStor reader, you’re certainly familiar with multi-protocol, FCoE-based converged network adapters (CNAs) from vendors such as Emulex and QLogic.

An emerging option is virtual I/O, which is often implemented on I/O virtualization switches or gateways (and could be complementary with FCoE CNAs). It’s a flexible way to dynamically configure servers and accommodate multiple I/O protocols while reducing your adapter, switch port, cabling, and power requirements.

If that sounds appealing, start your evaluation by checking out these early players in the virtual I/O space:

NextIO
VirtenSys
Xsigo

Early next week we’ll introduce a new entrant in this market – Aprius – in the News and Analysis section of infostor.com.

To get you started on virtual I/O, read “Virtual IO takes off in 2010,” by Wikibon.org analyst David Floyer.

Related articles from InfoStor:

Dell to resell Xsigo’s virtual I/O products
VirtenSys unveils VIO switches
I/O virtualization is a sweet spot for 10GbE

My Buddies Went to SNW and All I Got Was This Lousy Golf Shirt

2010-04-19T08:32:00.001-07:00

April 19, 2010 – Last week’s Storage Networking World (SNW) show was the first one I missed since they launched the event in 1999, breaking my 22-show streak.

On one hand, I didn’t really miss being at the show because my three days at SNW twice a year are the busiest six days of my work year. (My personal record was 33 meetings in three days.) And the trips set me back another few days just catching up with real work. And 11 meetings a day with (mostly) vendors and their presos is more than any human can take.

On the other hand, I did miss being at the show. Well, I missed being at the hotel lobby bar in the evenings where, over a few well-deserved adult beverages I was always able to commingle with old buddies (and at this stage of the game, most of them are old), analysts, consultants and the occasional end user.

But I wasn’t crying in my beer back here in L.A., because fewer and fewer of my old SNW pals are going to the show these days (in part this time around because Symantec Vision and the huge NAB show also took place last week, and there actually were a lot of storage products introduced at that show – see “New product highlights from NAB”).

But even though I didn’t make it to SNW, I got plenty of reports from people that did. A good time was had by all (except, perhaps, exhibitors that paid big bucks hoping to rack up buckets of leads), but everybody commented on how slow the show was (e.g., lack of traffic, excitement, product introductions, users).

Sure, SNW is a remnant of its former self (and there’s talk about collapsing the two shows into one annual event), but it’s still the biggest storage-centric conference and, despite the criticism it often gets . . . We need this show.

In order to raise the relevance of the conference, I think the show organizers should double or redouble their efforts to involve the channel – systems/storage integrators, VARs and distributors. SNW has done all it can on the end-user side and, according to most exhibitors, it hasn’t been enough. But instead of hoping for a handful of leads from their booths, wouldn’t exhibitors rather interact with dozens or hundreds of channel representatives? Most storage products go through the channel anyway. And channel professionals are more likely to kick tires in the exhibit hall (without the free food and drink enticements that end users seem to require).

Assuming you’re hopeful for a resurgence of SNW, do you have any other ideas for show management? If so, email me and I’ll collect and forward to the proper authorities.

Note my new email address: dsimpson@internet.com

(And I have a new email address because “InfoStor.com is heading to Internet.com.” )

Infostor.com is heading to Internet.com

2010-04-08T13:38:00.001-07:00

April 8, 2010 – You may have noticed that I’ve been a bit tardy about blogging over the last week. That’s because there’s been a lot of action, and excitement, here at InfoStor.

Infostor.com was recently acquired by QuinStreet which, among many other entities, owns Internet.com. (QuinStreet specializes in performance marketing and lead generation.) Infostor.com will be integrated into the Internet.com network of IT sites (see below).

Internet.com has more than 15 million unique visitors per month (all IT professionals) and generates more than 35 million page views per month. How’s that for reach? And Internet.com’s 200+ writers produced more than 28,000 original articles last year.

Being part of a team with this level of IT depth and breadth, and leveraging synergies with other Internet.com IT sites (including EnterpriseStorageForum.com and InternetNews.com), will significantly increase infostor.com’s traffic and enable us to expand our reach across the entire IT stack. However, we will still be 100% focused on storage and, although linked to other Internet.com sites, we will remain a separate site.

InfoStor’s core team will be joining me, including senior editor Kevin Komiega and InfoStor’s national accounts manager, Carol Stagg.

One change of note is that we will no longer produce the print edition of InfoStor magazine, instead focusing 100% of our efforts on the Web site, newsletters and related content.

To get an idea of the breadth of Internet.com’s coverage, it includes sites in the following IT segments:

IT management: CIO Update and Datamation (which I worked for back in the early ‘90s)
Networking: Enterprise Networking Planet
Servers: ServerWatch
Storage: Enterprise Storage Forum and, now, InfoStor
Security: eSecurity Planet
Enterprise Applications: CRM Today
IT News: Internet News
Databases: Database Journal
SMB Technology: Small Business Computing
Hardware: Hardware Central
Mobile: Enterprise Mobile Today
Communications: VOIP Planet

Our team is very excited about the new opportunities for InfoStor, but in terms of providing you with the storage-specific content you’re used to . . . It’s business as usual.

NAS gains in virtual server environments

2010-04-01T06:56:00.000-07:00

April 1, 2010 – I’ve been tracking how users configure their storage in virtualized environments for several years, via end-user surveys, and have noticed that NAS is gaining in popularity vs. other alternatives such as Fibre Channel SANs, iSCSI SANs, and direct-attached storage (DAS).

For example, an IDC survey of 168 IT professionals conducted in the fourth quarter of last year asked users “Which of the following storage types are currently deployed with your company’s server virtualization?” The results:

NAS: 37%
FC SAN: 35%
iSCSI SAN: 29%
Virtual storage appliance: 20%
Internal DAS: 20%
External DAS: 14%

Granted, IDC only surveyed 168 companies, but that’s the first time that I’ve seen NAS top the list (although statistically it’s practically a dead heat between NAS, FC SANs and iSCSI SANs).

In comparison, a survey of infostor.com visitors, conducted a few months prior to the IDC survey, had the following results (note: The InfoStor survey asked users to choose their primary storage configuration, and did not allow multiple responses):

FC SAN: 53%
iSCSI SAN: 28%
NAS: 10%
DAS: 9%

It’s meaningless to compare the results of the two surveys, but it’s clear from the IDC survey that, rather than trying to standardize on a single architecture for their virtual server storage environments, end users are moving toward a mix of two or more architectures.

I suppose that NAS’ strong showing is attributable in part to the rapid growth of unstructured file data in virtualized environments, as well as improvements in the latest versions of NFS. And, of course, to its relatively low cost, which has given NAS a boost not only in virtual server environments but across the board during the financial downturn. Also, the increasing use of “hybrid” or “unified” storage systems (i.e., NAS + SAN) may also be jacking up the percentages for NAS.

For more on the expanding applications for NAS, see “Evolving use cases for file-based storage,” by IDC analyst Noemi Greyzdorf.

Gartner on FCoE: The rebuttal

2010-03-25T13:30:00.000-07:00

March 25, 2010 – Earlier this week I blogged about a Gartner press release and report that purported to point out the flaws behind the pro-FCoE arguments. Essentially, Gartner analyst Joe Skorupa argues that Fibre Channel over Ethernet may not, in fact, reduce the number of switches and ports, nor the power and cooling requirements, in a converged network. He also argues that a converged network could be more difficult to manage than two separate networks (Ethernet and Fibre Channel).

For the full press release and a link to the ($195) report, see my previous post, “Gartner exposes FCoE ‘myths.’”

Predictably, those views set off some controversial fireworks, in part because (for better or for worse) Gartner holds a lot of sway in the IT world, which is where the FCoE battle will eventually be fought. For the best rebuttal to Gartner’s arguments that I’ve seen so far, see J Michel Metz’s “Gartner on FCoE: Whoa There, Sparky.”

I’m just glad to see the FCoE discussions moving away from arguments about which vendor is best-positioned to take advantage of FCoE toward more discussions about the technological merits and hurdles involved with the technology.

Check out our financials section

2010-03-24T10:55:00.000-07:00

March 24, 2010 – As anyone who’s gone through a CMS conversion knows, things can slip through the cracks. When we migrated to a new CMS platform last year, we inadvertently omitted tracking codes for one of the components on our site – the Financials section. Since I wasn’t aware of that, I assumed that this section was the least viewed element on infostor.com because it never showed up in our site analytics.

However, we recently realized the mistake, added the tracking code and, much to my surprise, the Financials section is one of the most popular sections on infostor.com. In fact, it sometimes gets more page views than our News Analysis, Featured Articles or blog components.

Its popularity may be due to the fact that in addition to all the information you’d expect to find on a financials page (stock quotes, history, etc.), the section also includes a wealth of content related to specific storage vendors, including press releases, news stories, blogs, podcasts and conference call alerts and archives.

You can also track the storage market via the InfoStor Market Index.

If you haven’t been using the Financials section of our site (which is located in the bottom right corner of the home page) click here and enter the symbol of a storage vendor. Try EMC (and check out the news stories on Joe Tucci’s salary) or NTAP (and note that NetApp’s stock is trading at close to its 52-week high).

Gartner exposes FCoE "myths"

2010-03-19T10:40:00.000-07:00

March 19, 2010 – Much of the talk about the demise of Fibre Channel relates to its prospects as a disk drive interface, where it is rapidly losing ground against SAS and SATA drives. But Fibre Channel as a SAN interconnect is still going strong, despite rapid growth in the NAS and iSCSI markets.

In fact, the Fibre Channel SAN market racked up record sequential revenue growth in the fourth quarter of 2009 – more than 15% quarter-over-quarter, according to the Dell’Oro Group market research firm. And the leading players in the Fibre Channel switch and HBA markets – Brocade, Cisco, Emulex and QLogic – turned in strong sequential performance numbers. Q4 2009 results were strong enough to put Fibre Channel revenues close to par with the record results recorded in late 2008.

Dell’Oro vice president Seamus Crehan attributes the strong performance to “improving economic conditions, overzealous budget cuts during the first half of 2009, government stimulus, alleviated supply constraints . . . and the server upgrade cycle that started in the second quarter of 2009.”

However, the future success of Fibre Channel as a SAN interconnect rests largely on the success of the Fibre Channel over Ethernet (FCoE) protocol.

InfoStor readers are by now very familiar with the potential benefits of FCoE and converged (LAN + SAN) networks (see Related Articles links at the end of this post). But a recent report from Gartner suggests that the concept has been over-hyped and that, in fact, many of the key arguments in favor of converged networks are flawed.

Here’s the Gartner press release, which includes a link to the full report (10 pages, $195):

Gartner Says Don't Assume That a Single Converged Data Center Network Is More Efficient Than Two Well-Designed Separate Networks

Converge All Data Center Traffic to a Single Technology, Not a Single Network

STAMFORD, Conn., March 16, 2010 — The notion that a single converged data center network makes for fewer switches and ports, resulting in a simpler network consuming less power and cooling, is flawed, according to Gartner, Inc. Gartner research shows that a converged data center network requires more switches and ports, is more complex to manage and consumes more power and cooling than two well-designed separate networks.

"The industry is abuzz with the promise of a single converged network infrastructure, this time in the data center core," said Joe Skorupa, research vice president at Gartner. "Alternatively described as Fibre Channel over Ethernet (FCoE), Data Center Ethernet (DCE), or more precisely, Data Center Bridging (DCB), this latest set of developments hopes to succeed where InfiniBand failed in its bid to unify computing, networking and storage networks."

"The promise that a single converged data center network would require fewer switches and ports doesn't stand up to scrutiny," Mr. Skorupa said. "This is because as networks grow beyond the capacity of a single switch, ports must be dedicated to interconnecting switches. In large mesh networks, entire switches do nothing but connect switches to one another. As a result, a single converged network actually uses more ports than a separate local area network (LAN) and storage area network (SAN). Additionally, since more equipment is required, maintenance and support costs are unlikely to be reduced."

In addition to the financial barriers to the success of a single converged data center network, Gartner also believes that there are significant design and management issues to be addressed. When two networks are overlaid on a single infrastructure, complexity increases significantly. As traffic shares ports, line cards and inter-switch links, avoiding congestion (hot spots) becomes extremely difficult. Mr. Skorupa said that over time, emerging standards, such as Transparent Interconnection of Lots of Links (TRILL) may make it easier to avoid these hot spots, but mature, standards-compliant implementations are at least two to three years away.

Debugging problems in the converged network are also more difficult since interactions between the LAN and SAN traffic can make root cause analysis more difficult. Since many problems are transient in nature, events must be correlated across the two virtual networks, increasing complexity. Should an outage be required for solving a problem or simply for performing maintenance, a downtime window that is acceptable for both environments may be required. This increases complexity and may increase cost, as well.

"It's clear that the barriers to a single network range from a dearth of available products and the price premium charged for those products to the requirement to "forklift upgrade" your entire network to long-standing organizational conflicts," said Mr. Skorupa. "However, while the promise that a unified fabric will require fewer switches and ports, resulting in a simpler network that consumes less power and cooling, may go unfulfilled, that doesn't mean that enterprises should forgo the benefits of a unified network technology."

Mr. Skorupa said that there is clear benefit in standardizing on a single technology for all data center networking if that technology adequately supports the needs of applications. This will simplify acquisition, training and sparing. However, settling on a single technology does not require that the networks be combined. Design, operations and troubleshooting is much easier with two separate networks, and it may also cost less to build two separate networks.

Additional information is available in the report "Myth: A Single FCoE Data Center Network = Fewer Ports, Less Complexity and Lower Costs."

Related articles from InfoStor:

Guidelines for FCoE deployment

The shift to FCoE is underway

Is FCoE the future of data center networks?

For a cogent rebuttal to Gartner's arguments, see "Gartner on FCoE: Whoa There, Sparky"