EMC cloud computing

David Vellante with Nick Allen

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.

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