EMC and the 7 dwarves – part 1

by Robin Harris on Thursday, 25 April, 2013

EMC has been gaining marketshare over the last several years. The world’s largest data storage company is getting larger.

Why?

IBM and the 7 dwarves
Back when mainframes ruled the earth, IBM faced a hardy band of competitors that had their own processor architectures and operating systems. Originally known as the 7 dwarves – Burroughs, UNIVAC, Control Data, NCR, GE, RCA and Honeywell – these companies rode the computing boom with varying success until the early 70s. Then the mainframe business matured and started consolidating.

IBM now has a nice multi-billion dollar annuity mainframe business.

The same, only different
EMC’s position is analogous to IBM’s in the 70s: EMC has the most successful scale-up OLTP arrays; offers better support; and keeps adding useful features.

Because of its size and growing share, EMC’s Symmetrix VMAX business will out-invest their competitors, increasing their functional lead in features and performance. As once-reasonable competitors like HP’s EVA fall by the wayside there will fewer reasons to choose anything else for high-capacity OLTP.

The cloud onslaught
With the coming tidal wave of cloud-based storage options it is clear that the industry cannot support all the big iron array companies we currently have. There are several implications to EMC’s dominance in the traditional storage business.

  • Large storage arrays for OLTP are no longer a major pain points with customers. They have bigger problems now with massive amounts of file data, streaming data and scale of public and private cloud storage.
  • Customers are no longer looking solely to big iron arrays for high performance. DRAM and flash arrays are taking over the nose-bleed end of the storage performance envelope, leaving less latency-critical applications for traditional storage.
  • As competition decreases, expect EMC to treat its flagship arrays as cash cows as it invests in newer technologies and companies.

What changed?
Expect to see a several of the dwarves leave the big iron storage array business. Let’s look at each of the competitors in turn.

Oracle/Sun. Sun’s storage business is the obvious weak sister among major vendors, as it has been for over 20 years. Oracle is having some success with its database optimized storage offerings, where it’s focus is on IBM.

They’ve got a tin-wrapped software strategy. They aren’t seeking to challenge EMC and will remain a niche player closely aligned with the Oracle’s database business.

Hitachi Data Systems saw the writing on the wall several years ago with their acquisition of Archivas. They’ve been busy turning it into a credible cloud storage alternative. With their global distribution, quality reputation and OEM relationships, they have a better than even chance of making the transition to the brave new world of storage.

Dell is not in the big iron storage array business today but they’ve been working to build a significant business. Unfortunately their operations focused culture – and years of dependence on EMC – leaves them poorly prepared to enter the mainstream enterprise storage business.

Dell is leveraging their low-cost supply chain to build a scale-out storage business. They’ll succeed with cloud service providers, but they’re unlikely to win in the enterprise. Providing reliable and low-cost hardware only gets you so far in the enterprise: support and a knowledgeable sales force mean even more.

NetApp has done a good job putting financial and marketing daylight between themselves and the other dwarves. But their one-size-fits-all strategy is bumping up against the reality that it doesn’t.

Buying Bycast was a smart move, but like the Spinnaker acquisition they’ve been slow to capitalize on the little-known scale-out market leader. They’ll hang in there, but unless they adopt a more flexible strategy and product mix, their days of heady growth are behind them.

They need to reinvigorate the company with a major cultural shift that enables them to market and sell multiple product lines, something some longtime senior execs – and a too-comfortable sales force – are dead set against. They don’t need to go as far afield as EMC has, but with their global sales and support they are well positioned to take a leaf from EMC’s technology publishing model.

Tomorrow: HP, IBM, the 7th dwarf and the StorageMojo take.

Update: As alert reader John Verity noted in the comments, my memory unit conflated the 7 dwarves with the PCM vendors – most famously Amdahl – in the first version of this post. Luckily correcting this makes the argument stronger. In the interest of transparency I struck out the wrong parts, but if it makes it unreadable I may just pull it. If I do, I’ll update this note. Update 2: I pulled the wrong sections in the interest of readability. Also made a couple of edits for clarity. Sorry!

{ 5 comments… read them below or add one }

nate April 25, 2013 at 8:59 pm

I don’t know how wide spread it is but what I hear from the field on the west coast (Both Seattle and Bay area) is that EMC is giving stuff away left and right to close deals, their tech in many cases is not competitive (especially in VNX). I’m sure they make some of it back up later on in inflated support costs, professional services or whatever(or perhaps other product lines).. also hear that there is high turnover in EMC reps (relative to a few years ago anyway).

Per VMAX – took me a while to dig this up but I thought this comment was interesting – not knowing anyone personally that uses VMAX I can’t vouch for it (but given the architecture wouldn’t surprise me) –

http://www.theregister.co.uk/2013/04/04/netapp-blair/

“They think VMAX is especially vulnerable as it “is well-known to be the most over-provisioned and short-stroked system in the market.””

I’m *really* happy and excited with how well the new HP 3PAR 7000 series is doing. I was sort of paranoid what HP (or Dell if they won) was going to do with 3PAR, but so far it’s full steam ahead, they are doing great and kickin ass. It certainly helps that the head of HP storage is the former 3PAR CEO – he knows his team and is letting them do their thing.

There has been high turnover in HP 3PAR sales too though – the new 7000 series is built for the channel end to end. Whether it is the simpler ordering, support, lower cost, self service(e.g. replace your own failed HD), self installation, and MUCH higher volume. They have thousands of EVA customers to go after, that platform is dead.

I’m sort of waiting to see when HP phases out EVA, P9500, and Lefthand(appliances). Keeping the LH VSA side of things and hopefully enhancing it further.

Also Robin not sure if you forgot that Dell acquired Compellent ? So they do have a decent enterprise offering. I talked with Compellent last year and was pretty impressed, it’s certainly no crappy equallogic. We ended up not going with them primarily because the boss wanted to get something cheaper as a stop gap until we could get a 3PAR for that particular site as well (which we’re in the process of getting approval to get now). The new 7000 series is easily 60% less expensive than the previous F-class 3PAR boxes. They can’t build them fast enough – 5 week lead times at the moment.

John Verity April 26, 2013 at 10:28 am

I don’t know enough to evaluate your evaluation of EMC’s market position, but I do believe you are wrong about “IBM and the Seven Dwarfs.” The seven Dwarfs were not the makers of plug-compatible mainframes (Amdahl, Fujitsu, etc.) but rather, the earlier and original mainframe makers: Sperry Univac, Honeywell, RCA, GE, Burroughs, NCR, and Control Data. During the 1970s, this gang winnowed down to the so-called BUNCH. IBM’s use of market power (the basis of its monopoly) enabled it to contain the Dwarfs collectively to no more than about 20% of the total market, even as they regularly sold computers that were significantly superior to IBM’s, technically and on price. (In light of this, it is quite remarkable that EMC was able to carve out as much market share in mainframe storage as it did. This may have been partly because IBM had to lower its pricing on processors in order to fight Amdahl and others and make up for that with high prices on storage, which left it vulnerable. And, I believe, EMC beat IBM to the punch with the use of smaller, more competitive hard drives; IBM stuck with its own, larger drives.)

Robin Harris April 29, 2013 at 8:22 am

Well, color me embarrassed! John, you are correct. Fortunately for my post the fact that the dwarfs ran their own software makes the argument stronger. I’ll change the post to eliminate my conflation of PCMs with the dwarves.

Thanks for the catch!

Anony Mous April 30, 2013 at 1:53 pm

Is it Tomorrow yet? Waiting for part II that I thought was going to be up on the 26th 🙂

Mitch November 3, 2015 at 8:50 am

What if Dell buys EMC?

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