Storage Peer Incite: Notes from Wikibon’s October 9, 2007 Research Meeting
This week Wikibon presents IBM: Sustaining storage momentum. This week's Peer Incite Meeting was dedicated to a discussion of the key messages that several Wikibon community members, including David Vellante, Peter Burris, Josh Krischer and Robert Gray, heard at last week's IBM Systems and Technology Group analyst event. Overall the group was encouraged. IBM is bringing some strong tools to the table in green computing, which offers users real operational savings in energy costs along with the opportunity to contribute to the reduction in greenhouse gas emissions. It also has a strong, well-thought-out strategy for storage security including the proper application of encryption and a strong story in virtualization, which promises more efficient use of existing storage resources that also can contribute to controlling the growth of the corporate carbon footprint.The team's one disappointment came in archiving, which has become a fragmented activity. We had hoped IBM, perhaps the one vendor with a full set of archiving products, could offer thought leadership toward a unifying strategy for archiving across the infrastructure. Unfortunately, it seems just as fragmented as the rest of the industry. Bert Latamore
Recently several Wikibon members attended IBM's Systems and Technology Group analyst day. These sessions are held for industry influencers and hosted by key IBM executives to provide an opportunity to gain information on IBM's overall awareness of customer problems, approach to solving those problems and tactical efforts to compete in the systems and storage marketplaces.
In this meeting, several issues stood out. Most importantly, IBM strongly pushed its view that IT organizations large and small will have to take more of a systems approach, rather than a best-of-breed product approach, to satisfying their systems requirements. While for some this may be a euphemism for purchasing less capable products, a systems approach is a superior strategy for attacking the current technology challenges facing business. Specifically IBM recognized that users are focused on improving productivity in ways that cannot be accomplished without a systems perspective. For instance, IBM talked about performing more work through service oriented architecture (SOA). While we heard nothing specific at the conference about how that might work, the assumption that users will continue to increase their focus on SOA over the next few years.
We did hear about how IBM expects users to reduce resources, including costs, devoted to computing over the next few years. IBM executives identified three main approaches to cost reductions:
- Energy efficiency through implementation of “green” strategies.
- Business resilience through improvement of overall safety and security and certainty of processing.
- Reduction in the amount of wasted resources through the more aggressive use of virtualization.
These broad initiatives cannot be accomplished without a systems orientation in computing. Of course storage plays an important role in how users will work with IBM tactically to achieve these laudable goals. For instance, IBM has more than 3,000 specialists focused on virtualization and more than 3,400 SAN Volume Controller (SVC) systems being implemented. IBM sees itself as one of the two most credible storage virtualization suppliers today. Tactically we recommend that users focused on virtualization work closely with IBM on storage because its products are broadly adapted and by all accounts seem to work well.
IBM's second major initiative was archiving. Here the Wikibon community hoped to hear an overall coherent approach for how users can begin to integrate archiving practices and thereby more readily assimilate applications into a broad set of archiving strategies, something badly needed today. We were disappointed in this hope: While IBM has all the pieces, it still lacks an overall systems strategy. As a result, archiving remains a disjointed set of activities that will require significant effort from users and suppliers for the next few years.
We did, however, hear a strong message on security and encryption. About 2.5 years ago IBM made multiple aggressive promises about encryption and security in storage, and we think it has delivered on those promises. One member of the Wikibon community says, "If you are paranoid in storage, go to IBM.”
On the green computing front, IBM recognizes that green computing concerns are not likely to cause dramatic changes in product purchasing plans in 4Q07 but nonetheless aggressively promotes the idea that green computing delivers benefits that go beyond social consciousness to deliver significant operational savings. This is again a strong systems and infrastructure play that affects every aspect of computing, including facilities, personnel, and ancillary support technologies as well as products. Near term IBM can demonstrate tooling and expertise to help customers move forward on green energy initiatives that are likely to lead to implementation decisions in 2008-'09.
Finally we were encouraged by IBM's moves in the SMB space starting with their demonstration of the BladeCenter S(imple) product that clearly has been designed, packaged and implemented with the needs of SMBs (although not the absolutely smallest businesses) in mind. Most importantly, IBM seems committed to reengineering its overall business processes to streamline the complexity that SMBs face as they work with myriad integrators, application providers and IBM business partners, to gain access to IBM technology. We anticipate that many of IBM's efforts to design simplicity into products and go-to-market practices will eventually move up into the enterprise market, changing how enterprise computing is envisioned, marketed, purchased, implemented, and managed.
Action item: IBM is emerging as a leader in storage where leadership is more than just market share but is characterized by a willingness to put forward an overall vision that can and usually is fulfilled. We expect that in the areas of virtualization and small business, customers have multiple opportunities to push IBM hard to gain access to important technologies under excellent terms and conditions. We also expect that in 4Q07 users will begin to use IBM products and expertise to initiate plans to improve overall energy efficiency, thereby saving significant operational expenses.
At IBM's October 2007 Analyst Briefing it became clear that the company will be one of the most vociferous marketers of green computing, virtualization and data center consolidation. In an already crowded field, it simply makes too much sense for IBM not to lead the charge as the firm's core competencies in data center best practices line up very well with these initiatives. Consider the statistics provided at the meeting:
Comparing 1997 resources to today, IBM has taken the following actions internally:
- Reduced the number of CIO's from 128 to 1
- Cut host data centers from 155 to 7
- Reduced the number of Web hosting centers from 80 to 5
- Reduced the number of enterprise networks from 31 to 1
- Rationalized applications from 15,000 down to 4,700
IBM will be flashing these statistics at every customer briefing along with impressive customer ROI metrics that demonstrate less-than-one-year paybacks on several relatively cost effective data center initiatives. Further, IBM will be touting the fact that it has 3,000 specialists dedicated to server and storage virtualization within the company. The IBM marketing machine will be advertising successes in Fortune, Forbes, BusinessWeek and the trade pubs and senior executives will become more aware of these issues.
Action Item: Be prepared for the conversation with senior level management about a new wave of IT infrastructure rationalization. Anticipate the phone call and demonstrate motion in these areas. Engage IBM where end-to-end system and data center expertise is fundamental to understanding the opportunities but do your own ROI assessments to complement IBM's.
One of the important trends within IT is the move from evaluation of storage solutions in isolation to the evaluation of solutions including the cost of integration into the systems infrastructure. Successful virtualization implementations will include servers and storage and integration with the existing storage assets. Successful archiving will include sound archiving practices, allow easy exploitation by current and future applications and allow easy migration to new technology with immutability. Security and encryption will need to be implemented with an end-to-end architecture including practices and procedures round key management. All projects should consider the total impact on the overall IT infrastructure and business value.
IBM is a leader in some storage areas where end-to-end design is important, including virtualization, security and green storage. In other storage areas such as archiving, the jury is still out.
Action item: Consider IBM as a horse to ride on courses that require cross-functional implementation such as virtualization, security and green computing.
IBM established a lead in virtualization with a simple product that solves real problems one step at a time. The true cost of refreshing storage technology ranges from 30%-60% of the acquisition cost of storage, the cost of unused storage about 100%, and the cost of managing the complexity of storage is well over 100% over the array life. By providing solutions that shorten the time to commission storage, improve utilization rates, and reduce complexity IBM has established a user base of more than 9,900 SVC engines and 3,400 systems. The ease of adoption of the solution has proved more important than the quality of the virtualization technology.
Action item: Include the costs of technology management, change and refresh in the business case for all storage solutions.
A fierce commitment to a systems approach. A focus on providing specific returns. Excellent design. Superior packaging. A deep integration of channel attributes into value propositions. These are the core elements of Apple's renewed success in consumer markets. They also are the core elements of IBM's BladeCenter S server and go-to market strategy, the most impressive product demonstration seen at IBM's recent industry analyst conference. While one product does not a successful strategy make, IBM has put in place the resources required to make simplicity a strategic centerpiece of the IT infrastructure business. IBM's push will start in the SMB (small-medium business) space, where simplicity is the only item in short supply. A new business unit controls most aspects of IBM's renewed SMB push for IT infrastructure, which includes not only new products like the BladeCenter S, but also new programs for streamlining channel interaction, new systems for enfranchising partner collaboration, and new capabilities for factoring market change into operations. Any success simplifying IT infrastructure offerings is likely to pay dividends to IBM in multiple ways. Not only will the company's market share in the SMB space grow (probably dramatically), but the experience gained by emphasizing simplicity is likely to generate major returns in the enterprise market (e.g., branch computing), as well. We've seen IBM -- and others -- introduce major SMB forays, but this one seems especially credible and off to an especially impressive start.
Action Item: The long-standing tradition in the IT infrastructure market is to push high-end technology to "petit enterprises" at "SMB price points." IBM seems to have veered from that tradition. SMB users should evaluate IBM's evolved approach to solving IT infrastructure problems; enterprise customers should expect IBM to push lower-end business practices up; and competitors better start taking the pressing need to simplify IT infrastructure seriously.
In the remaining few months of 2007, EMC sales people will aggressively push users to buy new GB on old and new product lines, including the Symmetrix DMX-4. However, at the same time, first-tier storage suppliers HDS and IBM will begin marketing (and in the case of HDS delivering, we believe) engines for thin provisioning captive and third-party storage capacity. IBM will not likely announce until mid-2008, however this sets up a very interesting dynamic for users: Buy a strategic solution for thin provisioning (which quickly can increase utilization of installed capacity by as much as 40-50%, with minimal performance implications) and get your 2007 allotment of EMC storage for free (if capacity growth requirements are less than 30-40%).
Action Item: Users should ask HDS and IBM if they can play storage Santa this holiday season and deliver a huge gift of EMC storage capacity with soon-to-be-delivered thin provisioning products.
[Editor's Note: In January 2008, EMC announced thin provisioning for the DMX-4, beating IBM to the punch. It is still expected that IBM will announce thin provisioning for the SAN Volume Controller by mid-2008].