Contemplating IT

One of the most important changes in the storage world is that the last group of startups that "made it" had huge exits. 3PAR, Data Domain and Isilon all went public and then were acquired for over $2 billion each. Compellent and EqualLogic were in the billion range. And even BlueArc did well with about a $600 million buy out. Not too shabby. And there were a number of smaller storage acquisitions with very attractive valuations compared to their revenue traction.

So what does this mean? Well it is important for the end user because they now buy these innovative solutions from market leaders (in some cases this good and in some cases it sucks). It has also changed the value of the next crop of storage startups, many of whom are getting extremely attractive valuations from investors. Hey its only money and may be worth the risk if it leads to a billion dollar exit.

But are there still new categories and innovations to justify the next, next generation?

SSD Storage
One of the biggest areas of VC investment and new startups is for SSD storage system startups. On the surface you might just shrug your shoulders and conclude that the traditional storage system guys can just add SSD disk drives and match the value proposition of the startups. That is why it is essential that the SSD storage system vendors do more than just provide SSD and a menu of features. Instead they need to leverage SSD in order to provide value that the other storage vendors cannot.

What might this include? High performance is of course essential but it must also include a compelling price/performance metric. For example the price per IOPS should be less than $1.00. Most traditional storage systems with disk drives are far greater than this - $3.00; $5.00 and higher.

Capacity optimization is extremely important as well. SSD solutions need to drive down capacity costs so it is closer to spinning media in price per GB. Technologies such as thin provisioning are important but are pretty common amongst HDD-based storage systems. Primary deduplication plays a major role here. There is some controversy with using primary dedupe and impacting performance and even data integrity, so naturally it will be essential that both of these issues are addressed. Now keep in mind any new storage technology typically had these same controversies (e.g. differential snapshots and thin provisioning) but eventually these features became mainstream.

I am a big fan of tiering for SSD. Now the pure SSD players have a disadvantage in this regard. But data doesn't require high performance for its full life-cycle. Therefore having some way to move the data to a lower storage tier is vital. Now interpret this anyway you want. Just figure out a lower tier whether its HDD, a third-party storage system, the cloud or a dedupe tier but you have to make the economics work. It all comes down to money.

Quality of Service (QoS) is another capability that makes sense and can be combined with tiering. If you can assign performance SLAs on a per application basis then you can leverage SSD far more effectively. It is about using the resource and not wasting it. Again, this concept is not new but has not truly been embraced by the market. QoS + SSD can create a very visible value proposition that traditional storage systems can't match.

Cloud Storage - A Wide Open Landscape
I love it when the hype cycle is at the stage that cloud storage is presently. It is simultaneously over-hyped and under-hyped. Just when real solutions are making traction, it is losing its sex appeal.

Cloud Storage is real and is making incredible progress. And there are lots of approaches today. There is pure cloud storage solutions. There are cloud storage solutions that focus on unstructured data; others on transactional block storage; application-specific services and solutions; services that focus on individual users; consumer oriented solutions; etc.

PB Storage
There are medium-sized companies that have hundreds of TBs today. That means that in a year or two they will have over a PB. And of course there are large enterprises that have 10, 20 or more PB today. So we are now in the PB storage era. This is a massive amount of capacity that has its own set of challenges just based on sheer size. Storing all of this data on a single logical storage system is easier said that done. How do you maintain any reasonable performance and address the challenges of data integrity that come with massive scale? How do you protect it all? Where does it live? How much space and power does it require? And how the heck will you ever migrate all of that data between systems? And let's not forget cost - which always is a factor - especially with IT budgets being flattened or reduced.

Big Data
I was just at an event and the question was raised as to whether people were going to be using the cloud to store big data. I suggested that you first need to define big data. Big data means different things to different people just like "data" in of itself means different things depending on who you are talking to. To a movie studio data means video and audio. To a bank data means financial information. And on and on. Big Data is as varied as data. The importance of big data is not the adjective "Big" or the noun "Data" but the verb "Analysis". It is how we get the use out of that data that matters. Like most things in IT this is not really a revelation but a point of clarity that we are making. We have been analyzing certain data forever but now we need to turn to other forms of data (and there is lots and lots of it) in order to get better use out of it. Analyzing data can lead to a new product break through; improving services; streamlining finances; uncovering business risks; etc. Most importantly, it can make IT far more strategic than it is today. And that is a change that is long overdue.

So how does storage fit into all of this? There are vendors that have put together database and storage systems into a single solution in order to optimize performance to run analytics. There are storage systems that have been optimized for performance for database analytics (e.g. SSD storage systems). But Big Data analytics is still emerging and could stumble and fall. Because the value proposition has to be tangible and easily consumed. I know of very few big data analytic projects that have been landscape changing beyond improving query response times.

What needs to happen (and the process has sort of begun) is the convergence of worlds that are otherwise disparate. You need to bring the business analytic world together with the IT infrastructure world and make something that is best-in-class in both.

Unstructured Data
The constant and relentless trend has been that unstructured data far outstrips any other data type in capacity growth and this reality is perpetual. Yet most of the new storage startups are just focused on SAN-based solutions. Where are the next generation NAS guys? If you are out there I hope you are focused on more than just a new scale out file system or architecture. Because its not that important. If you want the recipe for success - BIG SUCCESS - I have it. Give me a call

Data Protection and Recovery
Not only does backup suck but so does replication. This space needs total reinvention but here is a catch - it isn't friggen easy. It is friggen hard. The challenge is not just technological but also with business execution. You must overcome incumbency. You must be able to deal with educating a legacy mindset with customers. You most ensure that you don't break anything as you attempt to fix everything. Additionally, there has been no uber-big wins in this arena. But whomever can solve this problem and can execute in the market can be the next billion-dollar baby.

Note - I purposely left out vendor names in this blog entry.

There has been a ton of press coverage on the Nirvanix and IBM OEM partnership including an extremely enthusiastic article from Forbes. They kind of imply that IBM's deal with Nirvanix has driven up their stock to a 52 week high. That is really powerful if that is the case. Each of the myriad of articles pretty much say the same thing: this is a BIG deal.

Here is what the IBM OEM with Nirvanix means in the real world:

- IBM Global Services is a powerhouse and is certainly able to drive some enormous opportunities. It will be interesting to see some big wins based on this relationship. IBM could potentially change the whole cloud storage game based on their execution and go-to-market.

- Perhaps more importantly this relationship validates Nirvanix to large corporations, organizations and government entities that might have otherwise have been interested in the solution but hesitant because of their size.

- Not only does this help to validate Nirvanix but Cloud storage as well! Let's not forget there is still a great deal of uncertainty out in the market. Again, IBM GSS lessens Cloud FUD a great deal.

- IBM Global Services, a well-respected and extremely successful business most likely did intensive due diligence and this should accelerate the decision-making process for other companies looking at Nirvanix.

- Additionally, it raises Nirvanix above the crowd and gives them visibility to new markets and customers that weren't paying attention to them before.

The next day after the IBM announcement there was another one with Cerner, the large healthcare services provider. Cerner will provide cloud storage for the healthcare industry. This is also a big deal focusing on a very strong vertical industry with a major player. It perhaps was overshadowed a bit but in many ways is just as important. The amount of unstructured content is massive in the healthcare industry and having a focused partner to drive this market is critical to being a leader.

No Competition.
You can argue all you want with me but Nirvanix really has no viable compeitition. And you really should pay attention to storage companies that provide unique value (e.g. Data Domain, Isilon). Yes, there are "ish" competitors - solutions that sort of appear as competitive products but really aren't. The cloud services by Amazon, Microsoft and Google are not competitive. Nirvanix is focused on the Enterprise and these other services are essentially focused on individuals and not companies. In other words, a techno-geek will use Amazon S3 for some project or service but an Enterprise-class IT department isn't going to use it for storing their unstructured data long term. In addition to whatever technology pros and cons with different cloud offerings there is an extremely valuable and essential issue of building relationships with their vendors that is important to the Enterprise. They want people they can work with, negotiate services and terms, that understand issues in the data center, provide personalized service and influence the direction and vision of the solution. You are not going to get that with Amazon, et al.

The large storage vendors for all intents and purposes are absent from this market. And I mean all of them - Dell, EMC, HDS, HP, IBM Storage, NetApp and Oracle have nothing really to speak of. Interestingly, one of the next big things in storage is going to be cloud and none of them have anything real and at best something that is some level of being cloud-ish.

Why This Matters
Cloud storage will not replace the data center. However, it is an essential part of the overall services that every IT professional should be considering and planning on going forward. Unstructured data is growing at a far more rapid rate than any other data type and it will continue to do so. And the majority of this data is dormant and is consuming endless amounts of Tier 1 and Tier 2 storage on premises or at some co-location facility. The impact on capital and operational expenditures is extreme and will only get worse over time. The is an unsustainable situation that requires a resolution. Additionally, cloud storage offers a great platform for replicated and backup data as well. Furthermore, there is an opportunity for new businesses to emerge using cloud storage as its basis - this is already happening but we are at the tip of the iceberg. And Nirvanix is the only cloud storage vendor that is building true momentum for this market.

Here is a list of all of the articles on the Nirvanix and IBM deal if you want to check them out:

http://www.forbes.com/sites/siliconangle/2011/10/12/ibm-upgrades-cloud-play-with-startup-nirvanix-stock-hits-52-week-high/

http://wikibon.org/blog/ibm-outperforms-even-apple-smarter-planet-big-data-and-cloud-power-the-future/

http://www.datamobilitygroup.com/IBM_Nirvanix_OEM.php

http://neovise.com/nirvanix-and-ibm-disrupt-the-storage-industry-with-enterprise-cloud-storage

http://techcrunch.com/2011/10/12/ibm-announces-new-smartcloud-services-partnership-with-nirvanix/

http://www.thebiggertruth.com/2011/10/ibm-oems-nirvanix-cloud-storage-and-why-everyone-should-care/?utm_source=dlvr.it&utm_medium=twitter

http://siliconangle.com/blog/2011/10/12/ibm-puts-amazon-google-on-notice-with-nirvanix-oem-partnership-cloud-leadership-is-about-scale-advantage/

http://www.ssg-now.com/ibm-global-services-integrates-nirvanix-cloud-storage-in-smartcloud-enterprise-service/

http://www.datacenterknowledge.com/archives/2011/10/12/ibm-beefs-up-public-cloud-services-for-enterprises/

http://www.dcig.com/2011/10/cerner-and-ibm-send-industry-message.html

http://www.storage-switzerland.com/Blog/Entries/2011/10/14_Calling_IT_-_Nirvanix_Keeps_Rolling.html

http://www.eweek.com/c/a/Data-Storage/IBM-Engages-Nirvanix-to-Supply-HighEnd-Enterprise-Cloud-Storage-514026/?kc=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+RSS%2Ftech+%28eWEEK+Technology+News%29

http://www.theregister.co.uk/2011/10/13/ibm_oems_nirvanix/

http://www.infostor.com/backup-and_recovery/cloud-storage/nirvanix-deal-to-expand-cloudsmart-storage.html?utm_medium=twitter&utm_source=twitterfeed

One of the first things I thought of when I heard the news about HDS acquiring BlueArc was that it reminded me of a guy that has been dating the same woman for years and years and everyone always asks him - "when are you going to propose to her"? And for years he would always answer - "what's the rush?" Interestingly, it sometimes takes another guy to come around and show interest before the first guy realizes that he is about to lose a really good thing. Rumor has it that IBM made the first offer on BlueArc and that drove HDS to finally "propose". And the rest of us are shaking our head saying "it is about time".

You have to understand that file storage is growing far greater than block and there are only a finite number of players that have any credible solutions . NetApp is the king. EMC just become a lot more interesting with Isilon. And if NetApp is the king then Microsoft is the pope. And everybody else kind of sucks in terms of revenue and footprint.

BlueArc has a great file system and competitive NAS solution but their biggest challenge is having the resources to scale their business. HDS provides additional resources to make this happen. Additionally, HDS has been focusing on SAN storage primarily and adding the BlueArc folks gives them the best independent team in the NAS world.

So think about what I said earlier. File storage growth is eclipsing all other storage types. And there are fundamentally only three players. HDS just made a move that could make them the fourth player. BlueArc is an Enterprise-class NAS solution and that is who HDS sells to. What does IBM do now? HP? Oracle? Dell? They have no real answer to fastest growing segment in storage. HP, IBM and Dell all have file system solutions but none of them can address Tier 1 NAS.

Interestingly, from a bevy of vendors and startups only three NAS players have really been successful including NetApp, Isilon and BlueArc. And arguably only NetApp has been able to do it all on their own. Compare this to the massive number of SAN-based storage system vendors that have achieved amazing success. And yet, file storage is experiencing massive growth and will continue to do so for the foreseeable future.

This is the biggest acquisition by HDS and they have yet to prove they know how to leverage their resources including sales, marketing, operations and engineering to create a meaningful accelerated trajectory for BlueArc especially when compared to Dell with EqualLogic, EMC with Data Domain (and others) or even HP with LeftHand. And since HDS has OEMed BlueArc for several years, will owning the company change the dynamics in any substantive way? Hopefully HDS has an integration plan that will make this a home run for them. I think this is a smart and overdue move for HDS but you know what I'm saying.

I think Mike Gustafson did a great job and the purported $600 million acquisition price is a big win. BlueArc has a great file system and their solution is arguably the only Enterprise-class NAS, based on its scalability and performance. They really were the last man standing in the NAS marketplace and HDS did the right thing by finally becoming betrothed.

I have been pounding the drum on dedupe in primary storage for a very long time and I am surprised that the market hasn’t acted more quickly. This capability is even easier to quantify than snapshots and thin provisioning and yet it’s adoption has been slow.

The reasons for implementing primary dedupe is as clear as day. Data growth is ridiculous and never ending. The math is simple to grasp:

• Primary storage is growing at a CAGR of 60%.
• If you have 10 TB of data today that means you will have 16 TB next year at this time.
• In five years this will turn into 104 TB.
• If you have 100 TB of data today you will have 1.04 PB in five years.
• And since most storage systems have about 40% capacity utilization then you are talking about 250 TB of capacity to store 100 TB of data and 2.5 PB of capacity to store 1 PB of actual data.

Let us do the dedupe math:

• If you just get a 4-to-1 ratio then 10 TB of data is reduced to 2.5 TB of data.
• Based on a 60% CAGR in one year you will have 4 TB and in five years it will be about 26 TB. Compare that to 104 TB in five years!
• If you get a 10-to-1 ratio then you will only have about 10 TB in five years versus 104 TB! That is a magnitude in the difference of actual data being stored. And those dedupe ratios are achievable in virtualized environments.

I know it sounds too good to be true but even with a modest dedupe ratio the economics are simple to quantify and justify.

The strange thing is that we really don’t have wide adoption of primary dedupe. It is a no-brainer technology that very few storage vendors have actually implemented. NetApp has a distinct advantage over other storage vendors and is actually winning business because of their dedupe technology. To be candid, NetApp dedupe does have a number of limitations and yet none of their major competitors have stepped up to answer the call.

There are signs that other storage vendors are stepping up. Dell acquired Ocarina and IBM bought StorWize. Additionally, Permabit is a vendor that has primary dedupe technology and there are a number of vendors they are working with. I predict they will be acquired shortly and that will leave every other storage vendor out in the cold. However, none of these technologies have made their way into the market yet. A startup called Nimble Storage is growing like crazy and while they don’t actually have dedupe they do have in-line data compression and even with that they have measurable cost per GB advantage over their competition. Data compression is good. Dedupe is better. And data compression combined with dedupe is the best.

I could be cynical and conclude that storage vendors don’t want to implement primary dedupe because it would cost them money. But I doubt that is the case because it is inevitable and it already is costing them money since they are losing business over it every day. I think it the reason is primary dedupe is really hard to implement. Therefore the vendor that does it best will have a clear advantage over all of the others.

NetApp gained leadership for many years in great part because of their snapshot technology. 3PAR was acquired for an unprecedented price in great part because of their thin provisioning technology. The jury is still out on which storage vendor will be the primary dedupe leader but whoever it is will inevitably experience great success. And it will change the industry for the better.

Nirvanix - the Enterprise Cloud Storage company has a new management team led by CEO, Scott Genereux. Interestingly, Scott spent much of his career selling storage systems to Enterprise customers. I think that is an important distinction since Nirvanix refers to itself as Enterprise Cloud Storage. It requires someone who understands the challenges of the Enterprise versus someone that is an expert at selling web services. Steve Zivanic is the new VP of Marketing and he worked shoulder-to-shoulder with Scott when they were at Hitachi Data Systems together. This team knows how to sell and market even when they are up against a powerhouse like EMC.

True to form, Steve Zivanic has been on a passionate campaign to get the word out about Nivanix. There are a wave of articles and blogs about how great they are doing all over the web. You can go to the Nirvanix website (www.Nirvanix.com) to see they have 700 customers – some of which are big, big companies storing lots and lots of data. That is all good stuff but you have a number of sources to read about that information. Here is my take on what are some of the coolest and most valuable things about Nirvanix:

1. They have end-to-end solution that makes it extremely easy for companies and organizations to use Cloud Storage. Nirvanix provides an easy to manage complete solution with front-end usability, security, reliability, performance, multi-tenancy and global access combined with back-end controls, reporting, management and analytics.  It isn’t just a storage system that scales and supports HTTP – which so many other vendors tout as their Cloud Platform. Rather, Nirvanix provides a holistic solution designed specifically for businesses to utilize without being cloud experts. This unique and what I believe the market really needs to deploy Cloud Storage for the Enterprise.

2. You can utilize the Nirvanix public cloud storage or you can take their software and actually implement your own private cloud storage service. There are a number of large companies and organizations that want to enable their own private clouds and this meets that need. Nirvanix is also a great solution for managed service providers and this could be a whole new channel for them. The world will be divided in three ways - private cloud storage usage; a hybrid of public and private cloud storage usage; and pure public storage cloud usage. Nirvanix supports all three models.  

3. What is also very powerful is Nirvanix can be integrated with heterogeneous file systems. Essentially it can work with third-party storage systems – which is great for users that want to use existing storage. It is also great for storage vendors – they can partner with Nirvanix and still use their own storage systems. Nirvanix does have its own storage technology but their real value is in the Cloud Storage application – the web services that live above the storage.

4. Nirvanix is field proven.  They have been in the market for a number of years and those 700 plus customers are evidence that it works. This minimizes the risk that every IT professional needs to consider when making a decision to go forward with emerging technologies like Cloud Storage.

Another trend in Cloud Storage for the Enterprise is using open source file systems to build your own. The more technology minded IT professionals working for large organizations are considering Hadoop and Gluster and other extensible, scalable file systems. These companies could leverage Nirvanix instead of building the services, tools and overall applications needed to implement Cloud Storage.

Cloud Storage is a next generation IT infrastructure that is already changing the landscape.  This will continue to happen in obvious and non-obvious ways.  The obvious ways include using cloud storage for backup, DR and archiving. The non-obvious ways include new business models and applications being developed specifically for the cloud.  

Nirvanix is on the curve up and will only get stronger over time.  They have new leadership in place and a board and investors that are charged up and passionate.  

Since there is a climate of acquisition one can only assume that Nirvanix should be of real interest to a number of different major IT vendors. Anyone that is going against EMC should consider partnering with Nirvanix since it can take on Atmos both from a public and private cloud perspective. What should be of concern to the various “big guys” is when Nirvanix gets bought out it will be a two horse race in a market that is inevitable and massive.