HP/LeftHand: cluster market shapes up

by Robin Harris on Wednesday, 8 October, 2008

Hewlett-Packard’s acquisition of the LeftHand Networks shows how cluster storage is going mainstream – and how HP plans to be right in the middle of it. First PolyServe and now LeftHand.

This is about commodity-based clusters
Not iSCSI or GigE or 10 GigE as a storage interconnect. Fibre Channel’s failure to move downmarket – and Infiniband’s similar problem – means GigE is the only game in town.

Reaching the huge, not currently imploding, SMB market requires meeting people where they live. SMBs don’t live in Fibre Channel glass houses. GigE isn’t ideal, but it’s cheap and it works.

Did HP overpay?
$360 million isn’t pocket change, but it is only about 4x the $86 million investors put in. The investors get some nice coin, but it isn’t the 10-bagger they were hoping for.

Once the Lefties go through the interminable internal HP meat grinder, sales will grow rapidly. I suspect they weren’t up to Isilon’s $100M in sales – maybe $70M – but LeftHand was much closer to profitability. Net net: the price looks fair for a market leader in a high-growth market.

Battle of the competing cluster storage visions. Polyserve handles files; LeftHand blocks. EMC’s Maui is aimed at large-scale distributed file storage, a utility that ISP’s might resell to SMBs, but nothing an SMB would implement on their own.

Which will win – and there’s room for both – rests on the answer to the question Are there economies of scale in storage?. If there are, small-scale clusters sales will suffer and Maui should win.

The StorageMojo take
This is cluster storage market skirmishing, not a pitched battle. That will come but right now everyone is feeling their way, coming into the market from different directions, waiting to see what clicks.

Right now though, HP seems to have the strongest position. XIV is too new; Maui even newer; Lustre too complex; Isilon is digging out of a big hole. HP has the pole position with implementable products today and the services to back them up. Should be a powerful combination.

Courteous comments welcome, of course. Disclosure: I’ve done some work for HP, Isilon and Sun.

{ 4 comments… read them below or add one }

Steven Schwartz October 8, 2008 at 8:07 pm

Always love reading your posts. I think the only thing I wonder is the lumping of XIV and LeftHand Networks, in with HULK/MAUI, Isilon, Lustre, and Polyserve.

XIV (pretty limited flexibility) and LeftHand Networks, very slow growth over 9 years in business, are both block based storage products.

The rest are clustered file system solutions. File based access vs. block access meets two different needs. From my experience in the CFS market, the driver for CFS is both single file access as well as aggregate access to the same file space.

LeftHand Networks will never be a Clustered File System, Parallel File System, or a Networked file access solution.

They will be a scalable iSCSI software group within HP…and I hope for the people who are working there, that they are treated as well as Dell treated the Equallogic folks. LHN is in my backyard, and while I’ve always been aggressive in the marketplace against them, they do employ many of my friends, and i want nothing but the best for them.

As for the LHN deal? 4x revenue is a great offer for any company, which is about where I place HP’s offer on LHN. VCs didn’t kill it, but they didn’t lose the investment either. As far as profitability, that is all a game of shuffling money around, companies that are looking to IPO or be bought will invest less internally in order to look more profitable, or show major investments in engineering to make up for less profitability.

The real question I have for HP, will they be able to pull LHN into the enterprise storage space? or will they just let it simmer in SMB so that the EVA revenue stream isn’t impacted. I think that is the biggest difference between Dell’s buying Equallogic and HP’s purchase, Dell’s low margin EMC business (in the enterprise) is the 800lb. gorilla that no one wants to think about other then EMC (since that revenue isn’t low margin for EMC). Dell only gains from Equallogic’s growth, HP might suffer (never looked at the margins on MSA and EVA could be interesting). As for LHN’s margins, no way to know, since they have never formally filed with the SEC, it is all speculation.

Kevin Closson October 8, 2008 at 9:14 pm

As the former Chief Architect of Oracle Platform Solutions at PolyServe, I can attest that HP now has a really think clustering portfolio. It will be interesting to see what they do with it. Mostly HPC I should think…but who knows…

Ryan Malayter October 9, 2008 at 6:02 am

As a LeftHand customer, I must admit I am worried about this acquisition. LeftHand’s current stengths are its simple clustering on a variety of x86 hardware, and the Virtual SAN appliance that durns DAS into feature-complete clustered SAN storage (which is fantastic for DR sites).

My fear is that the HP acquisition will mean the elimination of support for SAN/IQ on Dell and IBM platforms, and artificial limits on high-end features and scalability to protect HP’s EVA lineup.

Also, LeftHand’s premier support is absolutely fantastic, better than any other vendor we work with. My experience with HP’s x86 server support organization has been mixed at best.

HP has a history of destroying their acquisitions – I hope LeftHand is an exception.

John Spiers October 17, 2008 at 8:51 am

From my perspective Robin has a very good handle on things – one of the few guys out there that really understands this industry. As for Steven, I don’t think he gets it. Many clustered file systems use traditional block-based access protocols to the storage device and require shared block storage (SAN) underneath.

This means PolyServe file server nodes are mapped to a shared volume on a SAN, so if the SAN doesn’t scale-out like the DFS, then the SAN becomes a bottleneck.
PolyServe on EMC, for example, does well but hits an I/O bottleneck at the EMC controllers. Having a scale-out file system on a scale-out block storage system is the “holy grail.” Each file server node is mapped to a shared and scalable volume on a SAN.

Ryan, LeftHand is still taking orders and will continue to support the Dell and IBM based storage server platforms. If I were to guess, HP would eventually like to offer an HP equivalent of the Dell and IBM offerings that can be added seamlessly to the Dell and IBM based storage clusters. LeftHand’s customer support organizations will stay in tact and continue to improve. I believe HP sees this as one of LeftHand’s strengths, so why change what’s already working.

BTW, I’m out there beating up on EVA all day long and haven’t slowed down one bit; let the best product win!

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