Mr. Dell’s eyes fixed on the rear-view mirror

by Robin Harris on Monday, 16 November, 2015

Zigging when others are zagging can be smart. Dell buying EMC to create a large computer company could be genius – or the last hurrah of a failing business model.

Dell’s perspective is simple: ≈50% of Dell’s revenue comes from PCs, a rapidly shrinking market. Dell needs to get into higher margin, non-shrinking markets if its investors are to make money on a future public offering.

EMC is a higher margin company. Tucci has made good bets with Pivotal and solid state storage. And VMware remains EMC’s jewel, comprising 70% of EMC’s market capitalization. But the problems start there.

Is VMware strategic?
VMware is a high-margin business that is still growing, but other than that, why own VMware? Its market position depends upon treating all resellers and OEMs, including Dell and EMC, equally, so what is the advantage to owning it?

It was Tucci’s best deal ever, spending $625 million for a company that’s grown to a $35B market cap, a 50x return. But that doesn’t explain why, under threat from Microsoft and Docker, it would benefit Dell to own it now, when its best years are behind it.

Costly leftovers
If VMware’s $35B is subtracted from Dell’s $67B offer, it means the rest of EMC is worth $32B, which is a hell of a premium over the EMC minus VMware ($15B) market cap – especially since about half of EMC’s storage business is in a long-term secular decline.

Dell’s strategy
Assuming Dell has a strategy it is that with software-defined-everything, Dell has the commodity hardware piece well in hand. But that is not the challenge large enterprise vendors face.

The challenge is becoming a systems vendor who enables enterprise IT to be competitive with cloud providers. Because if IT can’t be competitive with cloud services, they too will become a rapidly shrinking infrastructure provider – and buyer.

IBM thinks it can build a cloud business – as evidenced by their recent acquisition of Cleversafe – and given their technically challenged base they may succeed. Microsoft is well-positioned too, and if their consumer hardware business succeeds they may well move into higher end hardware. But HP has thrown in the towel on cloud and expect Oracle to do the same.

The question mark
So, will EMC help Dell make enterprise kit competitive with cloud? Timing is everything. If IT maintains a slow uptake of cloud technology, then EMC’s strategy of using VMAX and VNX as cash cows for cloud offerings makes sense.

But if cloud uptake accelerates, those cash cows could die of starvation, leaving Dell with expensive corpses.

The StorageMojo take
The new normal is already here – Amazon Web Services – with Google and Microsoft in the mix. Just as large, vertically integrated vendors disappeared in the 80s and 90s, we’re looking at the extinction of today’s large IT vendors, at least in their present forms.

We’ve moved to a services-based world. AWS is taking a page out of Microsoft’s playbook by encouraging a large ecosystem of supporting businesses. EMC’s core competency is flogging kit, not services.

Given that IBM and HP are both moving away from the traditional enterprise vendor model – focusing on services rather than hardware – Mr. Dell is either a brilliant contrarian or a damn fool. My bet is on the latter.

Joe Tucci wanted to sell EMC because he saw it heading for a cliff. He told a great story to Mr. Dell, but after the deal closes it is Dell, not Tucci, who will have to produce the show for a skeptical audience.

It won’t end well.

Courteous comments welcome, of course.


Is AWS trying to throttle back its growth?

by Robin Harris on Thursday, 22 October, 2015

I was hoping to go to this year’s Amazon Web Services re:Invent conference, as I did last year, but no joy. Not enough press passes to go around, I was told.

But then I learned that AWS limited press and analyst passes to fewer than 30, much to the disappointment of exhibitors, who love to get coverage at such big events. Why?

Trade shows encourage legitimate press and analyst coverage because it extends the reach of the show and makes it more likely that more exhibitors and attendees will sign up for the following year. CES – which is one of the largest trade shows in the world – typically has hundreds of press from all over the world attend. Likewise with the NAB – National Association of Broadcasters – show, with its focus on professional content production.

So the AWS limitation is puzzling, not to mention foolish. AWS may be the biggest fish in the cloud pond today, but Microsoft knows a thing or two about marketing, is immensely more profitable, and has AWS in their sights. Google is also immensely profitable, but seems to be lost in a fog, but perhaps their new corporate structure will help fix that.

This is not the time to throttle back on press and analyst coverage.

The StorageMojo take
I suspect this decision was made by Andy Jassy, Amazon’s Sr. VP of AWS. Few PR people would willingly decline additional ink or pixels.

But why? It’s not as if the marginal cost of another 100 free attendees will send AWS into the red. Or that dealing with a room full of professional skeptics for an hour will derail the AWS master plan.

So maybe AWS has all the growth it can handle right now and doesn’t want more visibility. AWS may be less scalable than we’d like to believe.

Courteous comments welcome, of course.


Dell buys EMC & Tucci wins

by Robin Harris on Friday, 16 October, 2015

EMC’s Joe Tucci has long been the smartest CEO in storage. While not every one of his bets has paid off, enough have done well, while the VMware $625M buy was a monster smash. Since VMware accounts for some 70% of EMC’s market cap, it is really the only deal that matters.

So what to make of his selling EMC to Dell? Another win for Tucci, turmoil for both EMC and Dell, and Dell and Silver Lake have been royally outfoxed.

Tucci has taken Dell to the cleaners. Dell bought a group of declining storage businesses (XtremeIO and – maybe some day soon – DSSD will help, but they’re small compared to the larger VMAX and VNX businesses), one highly profitable high-growth business (VMware), and promising but small Pivotal and Atmos businesses. I’ll be surprised if Dell/Silver Lake can hang onto VMware when interest rates start to rise and their debt load becomes a liability.

EMC’s core businesses are under long-term pressure from the cloud and from a host of startups whose modern technology is challenging EMC’s tired iron. EMC’s cloud initiatives are still in early days and, while promising, are also subject to intense competitive pressure from larger web-scale initiatives. The inevitable disruption due to the purchase won’t help these nascent cloud-related products either.

What Dell is getting – and what it sorely needs – is an aggressive executive team, deep enterprise experience, and a company big enough to change their parochial culture. If I were a Dell exec I’d be dusting off my resume because the EMC guys will be gunning for you.

What about everybody else?
HP, despite its current split up pains, will, on balance, gain due to the uncertainty around EMC’s post-sale product plans and sales and channel disruption.

IBM will continue its long-term retreat from hardware towards services (Cleversafe is the latest buy, and a good one for a services strategy), and won’t see much impact.

Oracle is niche-focused and may decide to broaden their storage portfolio – Sun’s was historically weak, and that hasn’t changed – by making an AFA buy.

Cisco is the big question mark. They could easily buy NetApp, but NetApp is grappling with years of poor product strategy. How does the new CEO prioritize growing the UCS business against the other challenges they face?

HDS continues to quietly reposition themselves and while they’re too quiet, their strategy is sound.

The startups – including Pure, Nutanix, Nimble, Infinidat and others – will also gain, though Nutanix may lose Dell’s support in favor of Atmos. OTOH, Nutanix may clobber Atmos. Stay tuned!

The StorageMojo take
Tucci made a great deal for EMC stockholders – and for himself. He’ll get to continue to run EMC for a few more years, and without the hassles of quarterly reporting and insurgent investors he’ll be having a lot more fun.

The larger issue is whether the industry needs another hardware heavy enterprise IT company. The pendulum swung towards the big guys when a “best of breed” buying strategy led to unsustainable integration costs. But now that everything IT is based on one processor, two operating systems, a couple of databases and one network – with cloud vendors handling spikes and many new tools – it is now feasible for enterprises to buy modern best of breed products with features the Old Guard can’t match.

In any case, EMC will have a bigger impact on Dell’s culture than the reverse, and that could be a very good thing for Mr. Dell.

Courteous comments welcome, of course.


Hike blogging: Cibola trail

by Robin Harris on Thursday, 24 September, 2015

Fall is finally starting in the high desert. October is a wonderful month for a visit.

This picture, taken from near the top of the Cibola trail, imperfectly captures one of my favorite views. Several vertical rocks and spires create a tense, 3D arrangement of unpeopled skyscrapers that never fails to enthrall. I haven’t figured out how to capture the feeling in 2D, but this comes close:

Click to enlarge.

Click to enlarge.

Summer is a rainy season here – known as the monsoon – and for the first time in ≈7 years, no part of Arizona is in drought. That explains the clouds and the sun-dappled landscape in the picture.

Cibola trail is part of a 6 mile loop that is my favorite hike. Perhaps you can see why.

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Inifinite io’s network storage controller: what is it?

by Robin Harris on Wednesday, 23 September, 2015

Infinite io’s Network Storage Controller (NSC) is a rarity in enterprise storage: an original and unique device. It turns your file storage network into a software defined resource. But it’s not a file server, a caching controller or an intelligent front end to existing storage resources.

The NSC differs by applying deep packet inspection and analytics to network storage. First, the NSC scans all back-end file systems and storage to understand network layout and storage options. Then the NSC’s ultra-low latency layer 7 proxy uses wire-speed deep packet inspection to see all storage network traffic.

This approach to file storage that gives the NSC some unique capabilities:

  • The NSC sits in the network, between servers and storage without changing the network layout.
  • It works at wire speed, so it doesn’t affect throughput.
  • Unlike traditional storage virtualization, it is transparent to the network – if it fails it automatically passes through all packets to the local file storage, with applications and file servers unaffected.
  • The NSC manages storage traffic with much more granularity than array controllers, while also supporting multiple back end file servers, including cloud storage.

Cloud integration
The seamless integration of cloud resources is the NSC’s strength. Cloud storage is considerably less costly than local storage arrays, but concerns about security, availability and performance give many IT pros pause. How does the NSC manage these issues?

Files are broken up into sniblets or chunks before being compressed, encrypted and moved to cloud object storage. Each sniblet has its own key, so even if an attacker gathered all the sniblets of a file, they’d have to decrypt each one and then piece the file together. You can place the sniblets on multiple cloud providers to make attackers work even harder.

In normal operation, the NSC handles all metadata operations from its internal flash storage, including cloud data and all cloud-based data appears to be local to applications. When a cloud-stored file is requested, metadata is served locally while the NSC begins streaming the data.

All metadata and state information, are stored in the flash as well as – at your option – in external local and/or in cloud storage. A server app can access the state data if the NSC fails, enabling quick recovery from hardware failures. Encryption keys are stored locally in a tamper-proof TPM chip for quick recovery and added security, and that chip can be backed up as well.

A single file’s sniblets can be placed across multiple cloud providers, enabling parallel access to the file. File and sniblet level ECC enables files to be rebuilt before all sniblets are downloaded – handy in case a service is down or slow.

What makes the cloud integration so powerful is that you define what files get moved to the cloud – based on activity, age, size or priority – and the process is entirely transparent to any application that uses file storage.

The StorageMojo take
I’m often underwhelmed by those applying network technologies to storage. Networks work with copies; storage with originals. Those are two very different worlds when data needs to be recovered – and in the strategies needed to minimize the need for recovery.

Assuming the NSC works as advertised, it has important advantages over competing front ends, such as Avere, because, for instance, you can deploy it in stages. In display mode it surveys your storage and estimates how much you could save by moving cold data to the cloud.

If that feels good, move to metadata mode, where the NSC accelerates metadata operations using its internal flash, while passing through all updates. Finally, switch on access to public or private cloud storage, choose your file migration policies, and start taking advantage of the cloud’s economies of scale.

Courteous comments welcome, of course. I’d love to hear from people who’ve tried this device. Please provide enough info – which I can keep confidential – so I can be sure you’re real.

Note: This post is based on a white paper I wrote for infinite io, but the opinions are my own.


Throwing hardware at a software problem

by Robin Harris on Friday, 28 August, 2015

Maybe software will eat the world, but sometimes the physical world gives software indigestion. That fact was evident at the Flash Memory Summit this month.

As mentioned in Flash slaying the latency dragon? several companies were showing remote storage accesses – using NVMe and hopped up networks – in the 1.5 to 2.5µsec range. That’s roughly 500 times better than the ≈1msec averages seen on today’s flash storage.

That’s amazing. Really. But will it help?

Fusion-io investigated sharing storage – to help amortize the cost of their PCIe cards across multiple servers – for years, but the tools weren’t there to make it work. Now, with NVMe and PMC’s Switchtec PSX PCIe Gen3 or Avago’s ExpressFabric PCIe storage switches the hardware tools are there.

The software problem
But lopping off 998µsec from storage I/O isn’t the boost we’d like, because the storage stack is so freakin’ sl-o-o-w-w. How slow?

In a recent record-setting SPC-2 benchmark, an EMC VMAX 400k achieved 3.5ms response time with 64KiB transfers, 800 streams, and 4 IOs per stream.

However, looking at a recent TPC-C benchmark – which are at the application level, not the storage device level – we see that minimum response times are 110ms with maximum response times of almost 10 seconds. Clearly, 1ms doesn’t make much difference.

Granted, the TPC-C results include application and database overhead – in this case SAP – not just the storage stack. But with all-flash arrays averaging under 1ms SPC response times, performance improvements need to come from the software.

The StorageMojo take
The yawning chasm between SPC and TPC results calls into question the value of the SPC benchmarks. Great for vendor’s “plausible deniability” when customers complain about performance. But as such a small portion of total latency it’s obvious that software – and perhaps server hardware – are key to reduced latency and higher performance.

Software may be eating the world, but the days of easy performance boosts from new CPUs are over. Software has to step up to improve performance.

Courteous comments welcome, of course.


Flash slaying the latency dragon?

August 13, 2015

I’m at the Flash Memory Summit this week. Two observations, one short and one long. Short first. FMS is much larger than last year. Haven’t seen numbers, but the huge exhibit floor looks like a first rank storage show. VMworld has been a top storage show, but now they have competition. Has latency met its […]

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Why it’s time to forget about flash

July 30, 2015

Post sponsored by Infinidat Flash has revolutionized storage, but the industry has lost sight of the customer problem: optimizing storage for availability, performance, footprint, power and cost. Industry analysts aren’t helping. Let’s forget about flash and remember why we’re here Gartner recently defined a Solid State Array segment. That was questioned by Chris Mellor at […]

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NVM is off to the races

July 29, 2015

With the Intel/micron nonvolatile memory announcement – said to be in production today – the race to produce next generation non-volatile memories has gotten serious. And not a moment too soon! What did they announce? You can read the press release here. Key quote: 3D XPoint technology combines the performance, density, power, non-volatility and cost […]

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The storage tipping point

June 29, 2015

Storage is at a tipping point: much of the existing investment in the software stack will be obsolete within two years. This will be the biggest change in storage since the invention of the disk drive by IBM in 1956. This is not to deprecate the other seismic forces of flash, object storage, cloud and […]

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Hike blogging: the Twin Buttes loop

June 21, 2015

Summer finally arrived in Northern Arizona, about 6 weeks later than usual. Good news: no wildfires, thanks to lots of rain. Bad news: I was freezing! I got out to the Twin Buttes before 7am – and was a little late. Shade is a valuable commodity in the Arizona summer! In another 10 days or […]

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Can NetApp be saved?

June 17, 2015

If NetApp is going to save itself – see How doomed is NetApp? – it needs to change the way it’s doing business and how it thinks about its customers. Or it can continue as it is and accelerate into oblivion. NetApp’s problem NetApp is essentially a single-product line company, and that product line is […]

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Why it’s hard to meet SLAs with SSDs

June 3, 2015

From their earliest days, people have reported that SSDs were not providing the performance they expected. As SSDs age, for instance, they get slower. But how much slower? And why? A common use of SSDs is for servers hosting virtual machines. The aggregated VMs create the I/O blender effect, which SSDs handle a lot better […]

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Make Hadoop the world’s largest iSCSI target

June 1, 2015

Scale out storage and Hadoop are a great duo for working with masses of data. Wouldn’t it be nice if it could also be used for more mundane storage tasks, like block storage? Well, it can. Some Silicon Valley engineers have produced a software front end for Hadoop that adds an iSCSI interface. The team […]

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Hospital ship Haven in Nagasaki, Japan, 1945

May 25, 2015

StorageMojo is republishing this post to mark this Memorial Day, 2015. In a few months we will be marking the 70th anniversary of the end of World War two as well. My father was a career Navy officer and this is a small part of his legacy. See the original post for the comments, many […]

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