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Change Coming?

Does your storage sales rep have a haunted look yet? Certainly if they work for one of the traditional vendors, they should be beginning to look hunted and concerned about their prospects long-term; not this year’s figures and probably not next year’s but the year after? If I was working storage sales, I’d be beginning to wonder about what my future holds. Of course, most sales look no further than the next quarter’s target but perhaps its time to worry them a bit.

Despite paying lip-service to storage as software; very few of the traditional vendors (and surprisingly few start-ups either) have really embraced this and taken it to the logical conclusion; commoditisation of high margin hardware sales is going to come and despite all efforts of the vendors to hold this back, it is going to change their business.

Now I’m sure you’ve read many blogs predicting this and you’ve even read vendor blogs telling you how they are going to embrace this; they will change their market and their products to match this movement. And yet I am already seeing mealy-mouthed attempts to hold this back or slow it down.

Roadmaps are pushing commoditisation further off into the distance; rather than a whole-hearted endorsement, I am hearing HCLs and limited support. Vendors holding back on releasing virtual editions because they are worried that customers might put them into production. Is the worry that they won’t work or perhaps that they might work too well?

Products which could be used to commoditise an environment are being hamstrung by only running on certified equipment. And for what is very poor reasoning; unless the reasoning is to protect a hardware business. I can point to examples in every major vendor; from EMC to IBM to HDS to HP to NetApp to Oracle.

So what is going to change this? I suspect customer action is the most likely vector for change? Cheap and deep for starters; you’d probably be mad not to seriously consider looking at a commodity platform and open-source. Of course vendors are going to throw a certain amount of FUD but like Linux before; there is momentum beginning to grow, lots of little POCs popping up.

And there are other things round the corner which may well kick this movement yet further along. 64-bit ARM processors have been taped out; we’ll begin to see servers based on those over the next couple of years. Low-power 64-bit servers running Linux and one of a multitude of open-source storage implementations will become two-a-penny; as we move to scale-out storage infrastructure, these will start to infiltrate larger data-centres and will rapidly move into the appliance space.

Headaches not just for the traditional storage vendors but also for Chipzilla; Chipzilla has had the storage market sewn-up for a few years but I expect ARM-based commodity hardware to push Chipzilla hard in this space.

Yet with all the focus on Flash-based storage arrays, hybrid-arrays and the likes; everyone is currently focusing on the high-margin hardware business. No vendor is really showing their hand in the cheap and deep space; they talk about big data, they talk about software defined storage…they all hug those hardware revenues.

No, many of us aren’t engineering companies like Google and Facebook but the economics are beginning to look very attractive to some of us. Data growth isn’t going away soon; the current crop of suppliers have little strategy apart from continuing to gouge…many of the start-ups want to carry on gouging whilst pretending to be different.

Things will change.


4 Comments

  1. Hi Martin, Dimitris from NetApp here.

    Interesting insights.

    Cheap and deep – remember the old adage, you can have cheap, reliable, fast, but can only pick 2 out of 3?

    This is kinda similar.

    Companies like Google and Facebook write elaborate software that can, indeed, take large amounts of hardware and turn it into something interesting.

    However, even they end up designing custom hardware, to their spec, with pretty specific components, that they’ve tested extensively.

    True commodity hardware means you can go to your local consumer electronics store and buy literally anything without caring too much about brand, size, interface, speed, firmware level etc.

    So – I don’t see that kind of commoditization happening any time soon.

    It’s not too hard for NetApp or EMC for example to let you install the software on true commodity hardware.

    The problem is – if you use an ancient PC with a family of mice in it that someone was using as a footstool in a crack house, and you try to run your business on it, and for whatever predictable reason it has a problem, who’s going to support you? NetApp? EMC?

    No – what I foresee happening is increased deployment of intelligent software sitting on supported, reliable hardware.

    So maybe this is an issue of semantics – what you mean by “commodity” and what other people think of when hearing the word “commodity”.

    An ARM box running 64-bit Linux is no more commodity than an Intel-based box running 64-bit Linux. It’s cheaper, sure. Runs cooler. But both are the same level of “commodity”.

    And even if certified semi-commodity hardware is used for scale-out, the software is what will be high-margin.

    The money will still exchange hands, there’s just no guarantee it’ll be less money… 🙂

    You see, corporations are in this for the money. It’s not a philanthropy. The idea is – we provide some strong value in some way, you pay for it if you see the value.

    Thoughts?

    Thx

    D

  2. Greg Knieriemen says:

    If you believe enterprise storage is a commodity the same way servers were commoditized, you might be correct – but it really isn’t. Independent of my work for a big storage vendor, I really don’t see it for some of the same reasons Dimitris states. Most companies do not run web-scale operations the way Google and Facebook do. There are lessons to learn from them and I think it’s manifesting itself in projects like CloudStack, OpenStack, Open Compute Project, etc. which moves the intelligence up the stack in software, but it also leverages the intelligence of the storage hardware as well to offload and streamline storage-specific operations.

    Oh… and for what it’s worth, there’s more margin in software than hardware – much more.

    You are spon with ARM.

    -Greg

  3. Greg Knieriemen says:

    Meant to say “spot on” with ARM

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