March Madness: The Changing Data Center Landscape

Data Center Madness

 

It’s been an interesting first quarter. Cisco and HP dumping on each other last month, 3PAR turns up the heat in automated storage tiering and then HP’s two-day analyst event in March, followed up by EMC’s grand vision for federated storage and then LSI’s analyst event in NYC. Next week is Iron Mountain in Boston where we’ll hear about the Mimosa acquisition. Then it’s SNW in April which will bring a ton of announcements. 

It looks like 2010 is shaping up as a good rebound year. Earnings reports in December were optimistic and the year-on-year comparisons with Q1 2009 should be excellent because Q1 2009 was so miserable. Tech companies are exiting the downturn with outstanding balance sheets. Keep an eye on the relationship between housing starts and unemployment. 

Major themes have of course been virtualization and cloud computing. The Wikibon community heard in early March from business continuity practitioners how the cloud has the potential to transform disaster recovery and business continuance, dovetailing with EMC’s vision of federated storage. 

Shifting Data Center Landscape 

The subtext to all this high level action these past couple of months is a shifting landscape in the data center. We’re seeing big players like Oracle, IBM, HP, Microsoft, Intel and Cisco position for the next wave of innovation; and we’re seeing companies like VMware and EMC trying to get a seat at the big dance…while NetApp stays focused on doing what it does best—making storage simpler. 

The sub-sub-text here is the competitive developments in the Fibre Channel business. The vendor community wants to keep users locked into FC without it looking like a lock-in so they’re giving customers a dual FC and FCoE path. Users are uneasy about FCoE but ultimately they will have little choice to adopt as costs come down and the technology moves from CNAs in servers to top-of-rack switches and ultimately converged switches and native FCoE devices. While networks might not converge in the near term, technologies will—around 10 Gb Ethernet and FCoE. 

Fibre Channel Ripple Effects 

We’re also seeing a new wave of competition in the FC switch business. HP recently dumped Cisco (they’d never admit this) and began private labeling QLogic FC switches. Yesterday QLogic announced that its switches are seeping into EMC (EMC is of course playing Switzerland saying it sells Cicso, Brocade and QLogic products). HP’s move to private label QLogic switches essentially funds QLogic’s entry into a market that’s dominated by Brocade (~80% market share according to Dell’Oro). Every market needs competition and the FC switch business really needs more competition. 

Of course QLogic is only focused on edge switching and doesn’t have an edge-to-core offering so perhaps the threat to Brocade is benign. But something’s happening in this space and it’s important because a lot of these big data center, federated, cache coherent installations will be running on FC or FCoE. FC won’t die. Wikibon estimates there are $25B in FC assets installed and CIO’s are not going to rip and replace that infrastructure—it would be crazy. That means there’s a good business still to be had and because it’s a mature business the logical way to grow is to gain share. Who has the share? Brocade. 

Wither Brocade?  

Two blogs got my attention yesterday. First was one posted on Silicon Angle pointing out that Brocade is under pressure. John Furrier wrote: 

Recently Brocade has been under fire for lack of performance due to pressure from Juniper and QLogic.  Vendors are broadening the ecosystem to create more competition and accelerate the convergence of storage and networking and servers. 

I doubt QLogic has had an impact on Brocade yet but there’s clearly some friction brewing there. But in another blog yesterday, StorageMojo’s Robin Harris was even more cutting. Entitled Brocade’s unraveling, Harris argued that Brocade’s strategy has painted it in a corner because its OEMs had diverging objectives to those of Brocade. Harris wrote: 

Brocade’s troubles reflect the dangers of an OEM strategy when your partner’s strategic interests are different than yours. None of them wanted Brocade to succeed as a networking company. 

The FC business is not growing. FCoE is a measure to keep the business alive for another 10 years and lock-in customers to a path that is safer than alternative protocols. Sure, eventually the world will go all Ethernet—the operative word there is eventually. The only ways to grow in this business are to raise prices or steal share from Brocade. And because Cisco is at war with the world it seems as though companies like HP are willing to become benefactors to QLogic which creates more pressure on Brocade. The company is getting squeezed by a backlash from SAN complexity and competition from Cisco, QLogic and Ethernet generally. What’s more, no one seems to want to shell out the $2.5B+ to buy Brocade even though the company has been shopping itself. Yes it has cash on the balance sheet (~$500M) but its debt is also high (~$1B). 

Complexity 

All this near term posturing underpins the bigger issue—users want things to be simpler. SAN was supposed to deliver that. It didn’t. And now there’s so much installed storage network infrastructure that users can’t get rid of stuff easily. Everyone understands that the ‘Google Effect’ is changing everything and all companies need to figure out how to simplify infrastructure management. That’s why all the arms dealers are trying to figure out an Ethernet strategy; EMC is riding VMware and guys like HP are trying to add value by simplifying outside of the hypervisor. 

Bottom line: Simplify or die…what’s your strategy?

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  • louwoods99

    Whoa, thats some pretty cool stuff dude. Seriously.

    Lou
    http://www.anon-vpn.net.tc

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  • Hey Dave, nice mashup! FC has had an interesting history. FC started when Seagate – a moderately successful storage OEM company – enlists the help of the rest of the industry to create an alternative to IBM's SSA (Serial Storage Architecture). Development of FC loop got the disk drive industry to create the financial suction for all things FC. Without Seagate's midwifery, FC as we know it today, would not exist.

    Brocade was perhaps the highest flyer during the bubble years – and that is saying a lot. But after 2001, the company has struggled to execute on a similar trajectory – which would have been impossible anyway. Brocade was not able to become more than a supplier of storage connectivity and always took a back seat to storage vendors in customer's plans. That left FC as a sitting duck for Ethernet – and Cisco as the household name associated with it.

    Cisco was able to get into the storage game with their MDS products, enlisted the assistance of EMC along the way and now is able to create a vision that puts them at the middle of both the storage and networking universes with FCoE. It also has the core competency to execute on FCoE.

    iSCSI had the potential to be disruptive and most of the arguments against it are paranoid posturing. However when Dell bought EqualLogic and HP bought Lefthand, the major advocates for iSCSI awareness were swallowed by companies that had no particular interest in developing he technology further. They just want to milk as much as they can from those products. I think its fascinating that HP and Dell – two companies that have no particular love for Cisco – helped clear the decks for Cisco to control the Ethernet storage vision. Badly played.

    As for simplicity, this has been the rallying cry for storage as long as either of us care to remember. The failure of SANs to simplify things had as much to do with inflexible storage array designs as it did with rushed decisions during the development of FC networking. That said, FC suffered by not having any virtual networking technology (for traffic segmentation) when it was launched in the storage space – and this led to all the problems with zoning and LUN masking and such. The lack of effort on this front by the FC standards group in the mid 90's foisted a lot of unnecessary work on administrators that is still going on today. A fatal design flaw, omitted in the name of expediency, at birth.

    Customers have had a big hand in how things have gone too. Very conservative, to a fault, when it comes to making things simpler. They howl about how much they want simpler ways of working but won't consider them when they come along. The market has been its own worst enemy where simplicity is concerned.

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