A reader piqued my curiosity
I got a comment today from a gentleman named Kevin Stay on an the Isilon’s Q4 Results. Kevin was a little miffed with me. He wrote:
“Isilon is validating the storage cluster market” ???
They are a tiny as yet unprofitable startup with zero market share and evidently a good implementation of a great idea.
I contrast them with Netapp and scratch my head at your assertion Isilon is doing the validating of the storage cluster market. Here we have a Fortune 1000 company growing like crazy compared to others with actual market share. Yes, Netapp gear is pricey and proprietary like all the other players at this point, but they have the established customer support and field reliability numbers to justify it if only against those other current players. If they can internally finish the acquisition and get back to 1 code base across the product line in the next year or so they should have a bright long term.
So I went off in search of some reasonably hard data. I like SEC reports, since people can actually go to jail if they get too creative with the numbers, unlike, say, Gartner Group analysts, who might get a bonus instead.
Isilon claims #1
In the prospectus for their IPO (initial public offering) Isilon stepped up to the plate:
We believe we are the leading provider of clustered storage systems for digital content, based on customer adoption, breadth of product offerings and technology capabilities.
I think they mean that they sell more dollars worth of cluster storage than anyone else. Or something to that effect.
The dog that didn’t bark
Other than announcing they’ve started shipping their storage cluster, the Data ONTAP GX, which is based on the Spinnaker acquisition they made back in ’03, NetApp has been almost silent about GX. The most telling comment comes from their last 10-Q report, for the quarter ended October 27, 2006:
During the second quarter and first six months of fiscal 2007, our revenue grew year over year and our products have gained market acceptance. We continued to gain momentum through new product introductions in our high-end, midrange, NearStore Virtual Tape Library (â€œVTLâ€), and DecruÂ®products and broadened distribution capabilities. We maintained our leadership position in the iSCSI and network-attached storage markets and showed growth in the Fibre Channel SAN market. Revenue growth occurred across all major geographies. . . .
Notice what’s missing? No Data ONTAP GX you say? Precisely.
If GX growing faster than the rest of the company, even from a small base, one would expect at least a nod. Perhaps the next 10-Q will contain that nod.
One number NetApp should fix:
According to International Data Corporationâ€™s (IDCâ€™s) Worldwide Disk Storage Systems 2006-2010 Forecast and Analysis, May 2006, IDC predicts that the average dollar per petabyte (PB) will drop from $8.53/PB in 2006 to $1.85/PB in 2010.
I rather doubt IDC said any such thing. Or I’ve been paying way too much for storage lately.
The StorageMojo take
According to their prospectus and quarterly report, Isilon sold about $62 million worth of storage clusters. From a standing start in mid-year I’d be very surprised if NetApp surpassed that.
I’ve introduced many products. Follow-on products are one thing. New architectures quite another. For one thing, smart sales people don’t want to be the first in the office to sell it, because they know they will catch all the arrows. So they wait for Mikey, the naive kid, to sell one and see how it pans out.
So what about PolyServe, the Oregon software company who has deals with HP, EqualLogic, and DataDirect Networks? The total sales of HW and SW using PolyServe might be bigger. Yet that revenue doesn’t flow to a single vendor as it does with Isilon.
It may be a TKO, but I give Isilon the nod. Number one storage cluster vendor in 2006. Congratulations!
Comments, disputation, or what have you welcome, as always. Comments moderated to protect the innocent. Or the guilty.