Storage Peer Incite: Notes from Wikibon’s May 27, 2008 Research Meeting
Moderator: Dave Vellante & Analyst: Nick Allen
EMC World is the definitive must attend event for professionals using EMC products, including VMware, Documentum and Iomega, as well as EMC's core storage products. Even storage professionals not using EMC products should consider attending just to increase their overall knowledge of the storage market. To obtain the most from EMC World, attendees should plan ahead and maintain a focus throughout the event. It's sheer size can be overwhelming, and attendees who arrive without a plan could be in danger of becoming disoriented and missing events and sessions important to their specific interests.
Four key members of the Wikibon community traveled to EMC World this year, and they still could not attend every event or session. This week's newsletter offers some of their thoughts based on what they were able to attend. While the conference did not have any one blockbuster event or theme, it provided a large amount of valuable information about the state of major areas of the industry and about EMC's own focus and direction. To an extent also, what was not there -- particularly a lack of focus on green computing -- is revealing and surprising. EMC has the pieces of a strong green computing message. However, it has chosen not to pull those together into an organized program. This decision is most likely purposeful as only 5 percent of CIOs see their data center's energy bill. We find this dynamic unfortunate as it is our view EMC can play an important part in an enterprise IT carbon reduction program; regardless of whether EMC chooses to bring a green message to the market. G. Berton Latamore
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EMC World 2008: Head in the clouds, feet on the ground
EMC World 2008 took place the week of May 19th at the Mandalay Bay Hotel in Las Vegas. The event was attended by more than 9,000 people from 85 countries and showcased 128 EMC ecosystem partners. There is little question that from a storage perspective, this is the premier customer event in the technology industry and gave excellent visibility on how EMC is investing its substantial R&D effort.
Notable was the richness of the content, which included more than 550 sessions aimed primarily at a technical audience and the diversity of customers. By Wikibon estimates, at least half were there to learn more about EMC’s non-core businesses, specifically content management, VMware, security, and other software.
Two significant and related themes emerged from the event, which was really a series of many mini events, that point the way toward EMC’s differentiation strategy: 1) EMC is intent on developing storage for cloud computing and 2) EMC plans to lead in securing the cloud and other infrastructure.
The Cloud
As it relates to the cloud, while very few specific details were provided on EMC’s strategy, several indicators are percolating that bear watching in the intermediate term:
- EMC’s fundamental premise is that while 70% of the world’s data will be created by individuals, 85% will be managed by enterprise infrastructure (e.g. in the cloud);
- According to IDC, the amount of digital information stored is 281 Exabytes and 90% of new information being created is non-structured;
- EMC demonstrated Hulk, its low cost turnkey storage hardware array for cloud infrastructure. Information on Maui, the software component of EMC’s cloud strategy was less forthcoming but Wikibon believes if EMC designs Maui to meet the requirements implied by OceanStore out of UC Berkeley, the company would be demonstrating substantive innovation in this space;
- Documentum demonstrated a variety of social networking mashups, “Project Magellan” which integrates enterprise social networking portfolios.
Wikibon believes EMC does not want to compete directly with the likes of Google and Microsoft in cloud computing; rather it wants to enable enterprises to acquire or rent cloud infrastructure. Although, like all cloud-related initiatives, this too can change quickly. In fact, EMC’s February 2008 acquisition of Pi, a small startup focused on the grand vision of creating, reading, storing, and organizing all of your content, brought with it Paul Maritz, who instantly became the head of EMC’s Cloud Computing Services and Infrastructure Division.
Securing the Cloud
Securing the cloud and other enterprise information generated meaningful discussion at the event. Art Coviello, head of EMC’s RSA division, emphasized that security problems are growing faster than security solutions. In 2001, 1.5% of IT expenses went to security, a figure that doubled by 2006 and is expected to reach 5% in 2009. In this timeframe, security-related revenues have grown from $35B to $55B, good news for security vendors, yet organizations do not feel more secure.
This prompted one Wikibon member to comment that the Internet is a “digital Pearl Harbor” and the more data that gets placed on the Web, the greater the vulnerability. Wikibon gives high marks to EMC’s RSA integration emphasis within its product lines, which use an 80 point conformance and compliance standard. Users should expect EMC to further leverage RSA technology to protect devices, communications equipment, and other enterprise equipment with a strategy that focuses not on securing the perimeter but rather emphasizes that all data should have security metadata associated with it for the purposes of authenticatioin, access, and rights management.
Core Storage
Interestingly, Joe Tucci’s keynote barely mentioned Symmetrix and CLARiiON, although Dave Donatelli, the head of EMC’s core storage business gave a meaty overview of the core storage business. One item creating substantial buzz at EMC World 2008 was the vendor's strong position on flash and its role in the storage hierarchy. EMC cut flash prices by about 1/3 from their originally expected announcement price, and users should expect flash prices to fall substantially faster than fibre channel drives over the next several years. Flash prices are falling at around 10% per quarter, a rate which may be accelerating, while FC drives decline perhaps 5% or even less. In a relatively short timeframe, the premium on flash relative to spinning disks will decrease from what is now around 20X to less than an order of magnitude. The message is clear, the world’s #1 storage vendor is giving a big boost to flash, and users should expect these devices to show up in many more products over time.
Storage virtualization did not get much play at the event, but Wikibon attended a breakout session on Invista, EMC’s storage virtualization appliance. Invista has around 200 customers and seems to be making steady progress, albeit slowly. EMC’s primary virtualization strategy remains server virtualization with VMware and data presented suggests EMC’s dominance in VMware storage matches or even exceeds its overall market penetration.
EMC also touched on a new spindown capabilitity that it announced in conjunction with de-duplication on a Quantum VTL. The spindown is probably the more interesting piece as the Quantum relationship appears to be designed to shore up competition with Data Domain.
On balance, users should expect continued consistent execution from EMC’s core storage business with thin provisioning, spindown, de-dupe and flash being driven into more product lines over time. As well, the company will continue to push its multi-protocol strategy, which appears to be in high demand from customers.
Can Green be Profitable?
The event lacked a substantive emphasis on reducing energy consumption. Green is growing in importance but remains a secondary issue within IT as less than 5% of CIO’s actually see the energy bill, and this was reflected in EMC’s content. Nonetheless, customers at the event clearly indicated they want to see more innovation from EMC around energy efficiency. EMC’s Power Calculator was in full view and underscores the company’s credibility and knowledge in this area; however as a primary theme reducing carbon output and a corporate commitment to green was missing.
Wikibon believes its combination of a huge installed base, VMware, thin provisioning, Avamar de-dupe technology, flash, spindown and the Power Calculator puts EMC in a unique position to reduce energy consumption within the data center, and we’d like to see more leadership here. Specifically, a corporate commitment to carbon neutrality from production to supply chain to demand would provide the credibility expected out of a giant such as EMC.
Action item: EMC World 2008 further demonstrates EMC’s leading position in the storage marketplace. This is a must attend event for customers who want to increase their return on EMC investments. It represents the most comprehensive collection of how to knowledge in the storage industry, period. EMC users should mark their calendars for EMC World 2009 May 18 - 22, 2009 in Orlando, Florida.
EMC World 2008: Should Users Make EMC Their Strategic Storage Partner?
Periodically we get inquiries from users looking to simplify their storage infrastructure and asset management by “partnering” with one storage vendor. We also have conversations with users who either have done so but did not continue such a relationship after the agreement expired, or are looking to get out of such an agreement early.
At EMC World 2008 EMC basically declared it intends to be able to store, manage and secure all the world’s data in all forms including, desktops, PDA’s, datacenters, remote offices, cell phones, SOHO (Small Office/Home Office), Web 2.0 Cloud, etc. And with its impressive line-up of products, solutions and services combined with an aggressive acquisition posture, EMC is certainly a clear candidate for a strategic partner. Indeed given EMC’s stature with:
- Sustained R&D investment of over 10% of revenues,
- Outspending its competitors,
- ˜5,000 technical storage R&D employees,
- Industry’s broadest product portfolio,
- Play in more storage markets than anyone else,
- Ship more storage systems than anyone else,
- All designed top to bottom by EMC,
- Sustained technology and market leadership.
This puts EMC in the enviable position of being able to create a wide variety of total solutions vs. point products. EMC is a safe bet with great services and gives customers one throat to choke.
So, why not choose EMC has a sole strategic partner? First of all, while EMC develops backup software and does resell Quantum tape storage to fill gaps in its portfolio, the company does not emphasize this bottom storage tier and is not considered best of breed in tape infrastructure. So if tape is still alive in your shop, EMC is not a play, although EMC’s RSA division will manage encryption keys for encrypting tape drives. And in partnership with Cisco and Brocade, EMC can encrypt data in the SAN as it flows to a storage device. Secondly, EMC’s green storage strategy is not yet well developed, and most products have not been “green-ified” to the greatest extent possible. EMC’s data deduplication technologies are a notable exception, especially when compared to disk-based backup alternatives without de-dupe.
But the most important factor in considering a strategic partnership with EMC is that customers always get the best pricing and contract terms when there is more than one vendor in the shop. It is extremely difficult to negotiate a single-source contract that will yield competitive terms for the duration of the contract. This is the single most common reason users abandon this kind of partnership. Less frequently, users cite technological inflexibility – they are running on older products and cannot deploy new technologies – both from the partner and its competitors. Thin provisioning and data de-duplication are recent money-saving examples – other vendors had these long before EMC did. But, EMC is not alone here.
The bottom line is by including more vendors in the RPF mix users will broaden their perspectives, sharpen thinking, expose themselves to leading technologies and ultimately develop better solutions for their organizations.
Action item: Look for the best solutions for storage, content management, security, server virtualization, etc. Prioritize what you need from EMC and leverage EMC’s testing and solutions capabilities. Negotiate, Negotiate, Negotiate! Don’t forget to negotiate training, services and conference tickets. This applies to EMC’s partners as well.
Don't get lost in EMC's blanket
EMC's portfolio covers just about everything in storage except a homegrown tape offering. At roughly $15B in revenue, it's one of the largest infrastructure providers on the planet, and customers should become increasingly aware of the many touch points EMC has within its organizations. Storage operations, planning, applications, network ops, security, finance, legal, and procurement all play important roles integrating EMC products and services. Moreover, often purchases are made by line of business, storage type (e.g. big versus small), or technology (content management versus core storage), etc. As well, with EMC's never-ending acquisition strategy, its push into online services and a very broad ecosystem, this matrix will only become more complicated and users should make concerted efforts to simplify the picture or at least understand it.
EMC's diversity heightens the need for organizations to take a holistic view of their EMC relationship in order to maximize returns on their EMC investment. At the very least, customers should be able to answer the following questions:
- How much do we spend, at what times during the year and where geographically (what currency)?
- Where and when do we get the best terms and how can we leverage those across our organization?
- Who in our organization has visited EMC, when, what did they learn, and is the information gathered consistent?
- Where are our relationships strongest, and where do they need improvements?
- What activities (including 'freebies') are we leveraging for training, integration, services, etc., and how can we share that knowledge across our organization?
- What are the top three things our organization should lobby EMC to do to improve our relationship?
By approaching an EMC relationship with an 'account planning' mentality, acting as coherently as the EMC sales and service organizations, customers can establish clear objectives, roles, negotiation strategies, and parameters that will yield measurable results. Managing this initiative like a project with a champion, timelines, metrics, and incentives is critical to results. Multiple sub-teams should be organized (e.g. one focused on core hardware, one on software licensing, and one on maintenance/enhancement services). Given the high switching costs between platform products, ensuring attractive forward-pricing, and maintenance contracts are at least as important as agreements on terms of acquisition.
Action item: Plan to interact with EMC the same way EMC creates account plans. Gather information, identify areas needing improvement, leverage strong relationships, develop a strategy, set measurable goals, and track results. The upside will be a more productive partnership with terms that are aligned to business priorities.
IASS - Integrated Applications, Servers
The development of many large-scale Web 2.0 applications is being built around standard hardware and software components, driven by the imperative of reducing the cost of development and operation. The hardware components are Intel architecture servers, IP switches, and SATA drives. The software components include open-source Linux OS and files systems. The applications are very lean, only using the software components necessary to enable the application. Written code is kept to a minimum.
The architecture of an IASS environment assumes that software and hardware components will fail and fail often. Redundancy and recoverability are built into the architecture (often in the files system). Hardware components are hot-swapped. There is no hardware maintenance.
What's missing from this scenario are the traditional storage arrays, storage software, SANs, VMware, and application middleware such as Oracle. Software licenses on a per terabyte or per CPU basis just don’t cut it in this environment.
Clearly IASS is not suitable now for high-performance transaction environments. However, for many applications with large-scale tier-3 storage they represent budget reductions of 50-80%.
Action item: As storage systems such as EMC’s Hulk come to market, IT executives should expect to see IASS from MSPs in the data center for applications such as archiving. Senior executives should be challenging their development teams to come up with alternative architectures for tier two and three applications, and driving up the adoption learning curve for IASS.
EMC World - A Model for Mindshare
EMC World started as a birds of a feather storage conference for technical experts. With over 9,000 attendees and nearly 580 sessions at EMC World in Las Vegas last week, it is evolving into a hybrid storage event combining a growing and diverse user community with education, partnering exposure, and numerous best practices themes, while building tremendous awareness, loyalty, and credibility for EMC's strategic directions. Many EMC executives were accessible, adding credibility to their customer commitment. NetApp has stated it will launch a major user conference next February in San Francisco to build similar values. These two companies are clearly growing considerably faster than storage industry revenues and gaining both market and mind share. The storage industry is now at a point in time where the best product doesn't necessarily win the deal. The companies with the best mind share, market awareness and services often win, even when they may not have the best product.
Action item: Virtually any established storage company should consider how the EMC model has evolved and the value it has created; then initiate some type of user and partner-based conference…even if at the grass roots level, with the intent of cementing mindshare and building longer-term credibility. It’s a great bang for the marketing buck!
Hulk is hot and heavy!
Hulk has arrived, and Maui is not far behind. Although still not announced, Hulk has reportedly has up to 10 3µ disk drawers each holding 30 native SAS or SATA drives. The drawers have a neat mechanism that allows them to be pulled out with full access to the front and back of the drives, allowing customer replacement of all parts. Up to 12 Intel 1µ 64 bit dual-core servers can be placed above together with two IP switches connecting servers, storage and the network. The result is 300 terabytes in a cabinet 44µ high, 25" wide and 44" deep. A fully configured box is hot (10,000 watts) and heavy (over 2,600 lb).
Hulk is designed for cloud computing based on open-source or proprietary file systems. The architecture of such systems assumes that all components can fail without impact on applications and can be replaced on the fly. ISPs and large self-sufficient enterprises are primary targets.
Hulk's architecture differs from the traditional model for this type of storage/computing, which is simple 1µ servers with 2-3 direct attach drives. The drive to disk ratio is more flexible on Hulk, and heat management is far less onerous. This architecture is also more future-proof as server heat densities are projected to rise faster than external storage.
Hulk is designed for applications similar to those supported by the Google File System. Make no mistake, EMC is trying to find a way to compete in markets typified by razor thin margins which presents a new challenge for EMC and other enterprise storage companies. The answer may be in Maui, the software for the cloud which will compete against many well-established open-source file systems and other software. EMC's added value with Hulk is a nice functional design and well-tested components. Wikibon believes this will command a 5-10% premium, no more. However, there is a huge market opening up as ISPs migrate from traditional server racks with direct attach storage to an external storage model. EMC can now compete in this marketplace with Hulk.
Action item: Many of the fastest growing areas of storage such as document handling, archiving, video management, surveillance and research repositories are well matched for systems based on storage such as Hulk. Storage executives should become comfortable with the technology which will become commonplace over the next few years. It is likely that ISVs and system integrators will be the initial shippers of hulk-like systems into the data center, but enterprise development teams will not be far behind.
