The high-end storage meltdown
Expect to hear a lot more about the SMB segment over the next 6 months.
Because the high-end market is sucking wind. NetApp and EMC are both reporting problems in the high-end. HP and IBM don’t break out as much detail but I’m sure they are feeling the chill as well.
This is a great time to buy
Vendors are scrambling.
The subprime mortgage mess - midwifed by political hack and former Fed Chairman Alan Greenspan (remember when he was encouraging people to take ARMs?) - has reached Wall Street and every major European financial center. IIRC, the financial services industry takes about 20% of the high-end storage kit.
A slowdown in 20% of the market may not sound like much. But EMC’s profits are about 11% of revenue, so a slowdown in Symm sales hits the bottom line pretty hard.
With CEOs getting bounced amid multi-billion dollar write-downs - now forecast to reach $400 billion - bank CIOs aren’t about to pony up for the gold-plated, diamond-studded storage of yore. Except for Goldman, who saw this coming and unloaded their CDOs early this year.
Ask for what you want - you’ll probably get it
EMC is very interesting. With Hulk/Maui coming in Q2CY08, you should hold off on any 2nd tier storage purchases you can. I estimate that H/M will be about 30% per GB less than the current gear.
The StorageMojo take
Structures tend to stand until a storm hits. The financial storm is unfolding now and it could get very bad. With EMC’s endorsement of cluster-based storage in Q2 the other storm will arrive.
The next 2 years promise to be very interesting for the industry and customers.
Update: Just came across this tidbit from the IT Jungle about a survey taken at the SMB Summit last month:
Among those responding to the survey, which was conducted in October, 45 percent said they expected to grow their annual sales by more than 10 percent over the next 12 months, and a stunning 21 percent of those surveyed said they expected to grow their businesses by more than 20 percent over the next year.
Storage was the number one area for capital investment.
Comments welcome, as always.
on December 4th, 2007 at 3:44 pm
Robin,
I give my theories on this here:
http://www.ibm.com/developerworks/blogs/page/InsideSystemStorage?entry=high_end_storage_melt_down
on December 5th, 2007 at 3:51 pm
Any links to the “hulk/maui” I always hear you talking about? Is there any detailed information on the kit yet?