In 2010, HP had an incomplete storage array portfolio, with a good product at the high end Tier 1 (HP XP), and good if specialized product at the low end (HP LeftHand), with an aging EVA base. It was not considered by many large companies as a strategic partner for external storage. In September 2010, Wikibon analysis suggested that HP would be a better fit for 3PAR than Dell. Part of the reason was that 3PAR could help HP address the important and potentially profitable middle and upper-end of external storage. This market is covered by Tier 1 and Tier 1.5 arrays. By addressing this gap with the acquisition of 3PAR, HP planned to become a complete storage array provider, and earn the right to become a strategic storage partner for any size of customer or any type of channel.
Wikibon suggested that six key areas of investment were needed. This posting is an assessment of where HP is in the integration of 3PAR, the investments and announcements to date, and how HP is progressing in the battle for array market share and acceptance as a strategic storage partner.
The six key investments that Wikibon identified as necessary with the current progress evaluation are:
- “A large investment in the integration of flash technologies with disk technologies going beyond SSD to enable different high-performance workloads. An example would be an implementation of flash-cache.”
- This is an important area, which still has to be fully addressed by HP. HP have introduced flash cache in HP servers, including FBWC (flash-backed write cache) capabilities. HP will need to invest more, including flash designs for arrays that break away from SSD limitations and flash-only array architectures. HP has interesting research in memristors (a non-volatile storage technology), a potentially disruptive technology as part of new processor architectures. However, the decision to invest in large-scale deployment necessary to replace flash will be made by adoption of the technology in the consumer market, and to date there is little sign of any emerging consumer value for memristors.
- “Significant investment in services to deliver the high-availability and performance capabilities of 3PAR, with a strong link back to development to ensure that storage functionality is enhanced.”
- This is still work in progress and will take time to evolve. The cross-technology high-availability services should be both internally delivered and delivered by the HP channel.
- “Integration of 3PAR with HP Servers in appliances with strong investment in tuning the 3PAR system for different workloads (e.g., business intelligence).”
- HP has made strong strides in its converged infrastructure initiative and has included the 3PAR and other HP storage technologies in these offerings. HP has a significant lead in server design and shipment and is in a strong position to expand its capabilities in this area.
- ”Strong investment in 3PAR local and remote array clustering to enable migration of data between array generations and dynamic data migration through the storage network.”
- HP has made significant announcements of Peer Motion and other technologies for 3PAR and LeftHand storage technologies. These capabilities are now strong across the storage portfolio.
- “Strong investment in system virtualization (e.g., VMware) storage services, including industry leading snap-based backup and recovery functionality.”
- HP has made important announcements supporting virtualized technologies from VMware, Microsoft Hyper-V, and Xen. There is some work in improving backup and archiving IT processes. This is a slow market to move, but backup partners and/or acquisitions will be needed to develop the migration to snap-based backup technologies and processes.
- “Aggressive implementation of new functionality, such as within array de-duplication, compression, and mainframe support.”
- 3PAR is executing in a broad-based de-duplication technology (StoreOnce). This will need to be accelerated if it is to be ready for the flash-only arrays and IO Tiering.
HP has done a good job of integrating 3PAR, mainly by giving the management team from 3PAR a free rein. The improvements in the delivery of 3PAR arrays have been significant, with the opening up of world-wide distribution through HP sales and channel partners. HP is talking of triple digit growth in many geographies.
With the success of 3PAR comes the need to work on the other array platforms, including the LeftHand, EVA, XP, and IBRIX platforms. LeftHand in particular needs to emulate NetApp and break away from the constraints of only being an IP-based storage array. To be a serious contenter, it needs to add Fibre Channel and SAS as protocols, and eliminate the friction of having to sell iSCSI by allowing customers to make a choice.
The proof of the pudding is in the eating, and in the case for 3PAR and HP, in market-share numbers. Figure 1 shows the factory revenue for external storage (arrays) for the third quarter of the last three years, together with the percentage growth of 3Q 2010 over 3Q 2009 and growth of 3Q 2011 over 3Q 2010. Overall it shows a robust marketplace with double digit growth. It shows that HP was lagging in growth against the overall market and all the leading storage vendors comparing 2010 revenues with 2009. In 2011 compared with 2010, HP has outperformed the market and is only a little way behind the leading growth performances of EMC and Hitachi.
Figure 2 shows the factory revenue for external storage (arrays) for four consecutive quarters from 4Q 2010 through 3Q 2011. This again illustrates that 3PAR is tracking the industry and maintaining market share. With its broader portfolio and integrated strategy, HP is well positioned to maintain and grow market share.
Wikibon believes that HP has made an excellent progress in integrating 3PAR and using the world-class 3PAR products to accelerate storage revenues. HP has also put into effect a sound strategy of integration, where it can leverage its leading server portfolio. Strong action is still required to gain traction with the other storage arrays in the HP portfolio, and with the marketing of a complete strategic storage portfolio, from DAS through to XP. Overall, Wikibon believes that HP is well positioned to provide storage with high functionality and good cost-performance over the next few years.
HP can now expect to be considered as a complete strategic storage array partner, alongside EMC and IBM.
Action Item: CIOs, CTOs and senior storage executives can add HP as a viable long-term strategic partner for all storage. The synergy is especially strong if HP is the primary server vendor.