As Nick Allen points out in Nextra Implementation/Availability Considerations, the intriguing part about XIV/NEXTRA is it offers tier-1 (or tier-1a) class performance with tier-3 disk drives, and presumably tier-3 pricing. Estimates indicate that IBM can use its buying power to acquire commodity components at 50% of the price at which XIV could acquire the same components. This could lead to some serious pricing actions on IBM's, part although IBM's corporate overheads have a way of moderating such behavior in the market.
So how should competitors react to this announcement? It seems that right now everyone is taking a wait-and-see approach...why panic? IBM bought Mylex for $240M to beef up its low-end and midrange products, then sold the company and increased its business with LSI. Now it's re-acquiring in the upper end of the midrange. Like a portfolio manager, IBM seems to be constantly diversifying, filling gaps, hedging bets and selling losers to manage its own financial performance. Why try to respond to such a strategy?
But by all accounts, the first two weeks of 2008 are pointing to a very weird year in storage. EMC has re-invigorated the solid state disk market, using a platform (Symmetrix) invented by a rock star-like engineer (Moshe Yanai) who has joined the company/division he once buried (IBM Storage). The company he helped save from the brink of oblivion (EMC) is now top storage dog and could take the same marketing tactic that IBM used nearly 20 years ago to create FUD around Symmetrix (i.e. NEXTRA may not be up to tier-1 availability).
The point is just as in 1988, when David Patterson, Garth Gibson, and Randy Katz set in motion a series of monumental events with "A Case for Redundant Arrays of Inexpensive Disks (RAID)," a bunch of really smart developers are creating new innovations built on many of the concepts being promoted by XIV (and several others). These systems use clustered storage, data spreading, self-healing and dirt cheap commodity components and are attempting to crack the current storage old guard with a new breed of economically attractive storage capabilities.
Action Item: Storage customers have always rewarded lightning-fast performance, rock-solid reliability and dirt-cheap prices. Suppliers must figure out how to deliver these capabilities in both block- and file-based environments, applying a new mentality to storage design that breaks the highly customized, dual-controller approach used by most midrange storage products today.