HP’s big transition

by Robin Harris on Thursday, 13 June, 2013

IDC says HP is selling 17% less storage last quarter than a year ago. Was that because the high-end EVA and XP businesses were contracting faster than the new 3PAR converged storage business was growing?

IDC definitions
IDC defines a disk storage system broadly, including anything with a controller, cables and 3 or more drives as external storage. That covers a lot of ground. They also have another segment, called open networked disk storage (NAS Combined with non-mainframe SAN) that kicks out direct-attach storage.

In either case IDC counts OEM revenue for the branding company, not the supplier. So their numbers overstate, say, IBM’s storage presence – which includes the NetApp FAS arrays branded as IBM’s N-series – while understating NetApp’s actual shipments. Hitachi, who also OEMs to HP and Sun, also suffers in the IDC rankings.

The HP answer
At HP Discover I asked David Scott, formerly 3PAR’s CEO and now head of HP storage, reporting to Dave Donatelli, formerly of EMC, about this. He answered that the high-end HP storage business was growing and that the contraction was in the low-end MSA and JBOD business.

According to Mr. Scott, due to HP’s current troubles, the server group has been moving away from low-margin business, as well as building servers that have up to 62 drives internally (HP ProLiant SL4540 Gen8 Server). Double whammy: server sales are down, and with them, the easy add-on sales of low-end storage; and the servers they do sell have more storage internally and don’t count as external storage sales.

As the largest seller of servers and disk drives, it doesn’t take much margin growth for both to drop off. It’s an intensely competitive market with lots of low-margin business that can juice the top line while eviscerating the bottom line.

The StorageMojo take
The high-end storage market is consolidating. EMC is winning big, and if traditional storage arrays are what you want, they should.

HP is the only major player with a tightly integrated next-gen product strategy that is a stark contrast to EMC’s product stovepipes. Any enterprise storage product/architecture eval needs to include HP.

Now that they’ve added the HP 3PAR StoreServ 7450 flash array HP has covered most of the waterfront in enterprise storage. Despite the inevitable headwinds during the largest product transition of any storage vendor, HP is well-positioned for the future.

Market dynamics are just that – dynamic – and quarterly numbers are only a snapshot. So while I’m having trouble making sense of the numbers, I know that big transitions are rarely smooth. All should become clear in the fullness of time.

HP storage has great technology. Their real challenge is getting the HP sales force revved up to compete better against EMC and NetApp. HP’s tech culture doesn’t appreciate what salesmen need to win, so I’d expect that’s where Scott and Donatelli are spending a lot of their time.

Courteous comments welcome, of course. HP is putting me up here in Las Vegas – a favorite drive of mine from NoAZ – but they aren’t paying for my attendance. Bummer.

{ 9 comments… read them below or add one }

Patrick June 13, 2013 at 7:44 pm

The 500lb gorilla question is what can HP do to chip away at EMC? The unified low-end mid-tier to enterprise in a single interface is a good start but they really need to look at their pricing structure. After pricing a couple VNX 5300/5500 configs vs 3Par 7200/7400 in the 60-90TB range with a number of features including a DR copy the pricing just doesn’t add up. The per-drive licensing is such a turn-off and hurts their purchase chances unless you are looking at minimum or maxed hardware configs.

nate June 14, 2013 at 5:11 am

Just a note Robin – Sun/Oracle haven’t OEM’d from HDS for years now, since a few months after Oracle acquired them. I remember talking with a local HDS rep I ran into at a bar of all things on the day HP won the bidding war for 3PAR vs Dell (was at the bar to have some drinks with my friend from 3PAR). The HDS guys made it sound like they were overjoyed that Sun was no longer an OEM, claiming that Sun/Oracle didn’t know what they were doing and just caused more problems. HP on the other hand with their XP line seemed to know what they were doing they put a lot more work into their OEM stuff.

I know one big XP shop that said HP was unable to compete on volume pricing with 3PAR though. Thought it was very strange, the customer could get P9500 cheaper than 3PAR (normally I’d think the opposite), perhaps it was a case of HP not willing to compromise on their own margins. I am not sure. Though the operating costs of the P9500 were/are huge since it is not simple to manage like 3PAR, they (customer) had/have no way to automate almost anything on it.

Per HP sales – they seem to want to drive as much to the channel as they can at least with the 3PAR 7000, which will obviously be the volume driver for their enterprise storage. The quality of the HP reps in general is not good (likely fairly in-line with Dell), and HP is not willing to pay for good reps, so many of the 3PAR reps are gone now (as is former 3PAR leadership for west coast sales at least (from what I know those guys were not rock stars either) – not familiar with other territories). Which can be expected to some extent, I suppose the good news is they are executing well on the engineering front.

Robin Harris June 14, 2013 at 5:46 am

Patrick, could you add some details? Love to see specifics and so, I’m sure, would other readers.

Robin

KD Mann June 14, 2013 at 7:37 am

There’s another factor in play here relative to servers, namely DRAM.

Since Westmere-EX and now Sandy Bridge-EP, server memory subsystems are now HUGE (up to 6TBytes/server). Because compressed databases are increasingly being cached in server DRAM (e.g. SAP HANA), the demand for external disk IOPS has dropped dramatically.

Missing from most discussions of this sort is the fact that cost-per-IOPS is dramatically cheaper with DRAM, even compared to the best Flash-based storage whether internal or external. So…when the CPU needs data, keeping it in DRAM is great for “IO prevention”.

Like Gene Amdahl said, “the best IO is the one you don’t have to do” (or pay for).

Another case in point is MS Exchange. In three product generations, from Exchange 2003 to Exchange 2010, the IOPS-per-user requirements have declined ~97% because Exchange can now cache more and more of the databases in DRAM. The remaining I/O pattern seen by block storage is no longer random, but almost purely sequential. As a result Microsoft can now recommend cheap 7,200 SATA/SAS JBOD for storage. Yet more storage revenue evaporates in the process.

In the meantime, Flash SSD hypesters like to quote Jim Gray the same way gun rights advocates like to quote the 2nd amendment, they leave out the important parts — like that bit about “well regulated militia”.

In this sense it is helpful to remember ALL of what Jim Gray said about Storage:

“Tape is dead, Disk is Tape, Flash is Disk, but RAM locality is King”

jimg June 14, 2013 at 1:04 pm

Pricing is in reality very similar in an apples to apples config. However 3PARs Achilles heel in the mid range is that they tend to lead on features that the competition can’t match, 4 controllers enclosure level availability etc. These features tend to be pushed as the default even though they often are not required to compete, which in turn pushes the initial cost up. Their competition know this and intentionally provide minimum specs to increase the apparent cost differential even further. So make sure you’re comparing apples to apples if the price is way out you likely aren’t.

It’s always easier to upsell a feature than try to take it away later to hit a price.

John Nicholson June 15, 2013 at 10:01 am

KN Mann is spot on. It used to be a SAN vendor would “own” a customer’s high end workloads with their big high margin frame system. These days, the biggest craziest stuff (Lustre) gets put on low end modular kit and scaled out. Some of the most insane workloads, gets put on Fusion IO. The “value added stuff” like replication is getting pushed out to the Hypervisor, or application level.

I deploy a lot of HDS storage, but I’ve managed to avoid touching a HORCM file only once for the past 3 years. Veeam, SQL mirroring, DAG and other thech, just does a better job at delivering DR, than ASYNC SAN vendor replication.

While the SAN vendors have come up with some “tricks” to make things faster (Flash tiering) IO caching tricks will always be most effective at the application layer, where full awareness of what was a CRC check, and what was a true read are easier to track.

As the IOPS per GB ratio keeps getting worse on disk, we had to do something, and EMLC in traditional SAN vendors kit with some tiering wasn’t enough. Application vendors have stepped up, and there is starting to be a clear seperation between vendors and products who can do this well (Microsoft SQL 2012, Exchange 2010+, Hadoop) and the has beens who can’t (Progress SQL/Epicore).

I agree with Martin G, that we are nearing enterprise storage being “done”. I think the real future for storage vendors, as the Hypervisor and applications take more value from them is to move into doing things above the block level. HDS’s push into object storage, and data life-cycle management is impressive. EMC’s a bit more scattered, but has some strong inroads into backup and security of data. IBM’s all about analyzing the data. HP’s is into these fields, but at a very shallow layer.

I agree the 3PAR is a great architecture, and for things like Thin Provisioning, and storage efficeny wipes the floor with other kit in similar price bands (EMC VNX being one of them). Part of their problem is translating that message at sales to purchasing departments who like Patrick above still see $ and GB’s and not a lot else. The fact that the 3PAR is going to get almost twice the random read IOPS for Thin provisioned LUNs of that EMC is something that gets lost in the barking carnival of “My cache hits are better than your cache hits”. I will agree with partrick that licensing is way to confusing on 3PAR. I spoke to a VNX customer who said they wanted to buy 3PAR but couldn’t figure out what they were buying, and gave up and went to EMC. When your loosing big deals on things like that, your market strategy needs help.

Amit June 17, 2013 at 2:00 am

KD Mann,

Agree with you that we can have an entire database (like HANA ) within the main memory. But DRAM is volatile. Isn’t that a problem?
-Amit

Kevin Stay July 16, 2013 at 4:06 pm

The day HP bought 3PAR is the last day I seriously considered them. My brother in law worked for Compaq and after many frustrating years at HP took a recent and attractive early retirement package. Even 15 years ago they were still a great company and could have survived the DEC and Compaq acquisitions if they had just stayed true to the original engineering centric values of the founders. Honestly Cisco would have presented a far brighter future for 3PAR than the hollow shell of a company that is HP today. We do not even consider ANY HP products for anything we do in IT despite some of the products themselves being real standouts.

Patrick August 26, 2013 at 2:35 pm

Robin,

Was looking at approximately 60TB usable for two sites with a mix of ssd/sas/midline at the first and sas/midline for the secondary. EMC just had better upfront pricing. The whole HP sales chain needs work…weeks for turn around on quote modifications was just crazy. Ended up delaying the purchase until after hearing some NDA sessions, pricing for the two options were fairly compatible. The question at that point is with comparing the two and the feature differences which is the best fit now and down the road for your organization.

Both sides offer some interesting roadmaps but my concern with HP is the waters which you cannot see more than a month in advance while EMC can offer details much further out (the further out the more blurry on time-table but feature wise has been pretty solid).

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