XtremIO’s slow start

The Seeking Alpha sometimes garbled transcript of EMC’s Q1 earnings call has some surprising revelations about XtremIO and EMC’s flash business.

In its first full quarter general availability, XtremIO have continued its very strong momentum. We began shipping our 20 terabyte XtremIO systems which are key to increasing XtremIO use for data basis [sic] and analytics applications. XtremIO won dozens of new customers in a quarter along with business from many repeat customers, who have been impressed with XtremIO’s consistently high and predictable performance in real world workloads. . . .

As successful as XtremIO is, the vast majority of flash capacity shipped by EMC is in [VMAX and VNX systems]. Over 70% of VMAX and VNX2 systems shipped with some flash capacity and in all, EMC sold more than 17 terabytes of flash in Q1 alone, up over 70% over last year and we believe way ahead of anyone else.

Surprises

• Dozens of new customers. The box was in beta forever and subject of much feverish speculation (for non-feverish speculation see EMC’s Xtreme embarrassment), flash and flash arrays are everywhere, and the best EMC can do is “dozens” of new customers? Weak!
• Vast majority. Most EMC flash is shipping in current arrays. Early days for XtremIO, but something to watch.
• Flash capacity sold up 70%. And sold into over 70% of VMAX and VNX systems.

Yes, I’m assuming a transcription error in TB vs PB. If not they are way more hosed!

The StorageMojo take
EMC has been touting flash for years. XtremIO is their entry into a sector with heavy VC investment. EMC’s sales force is the largest and most aggressive in the industry. Dozens, i.e. 24+, of new customers in a hot product segment’s 1st quarter?

Something’s wrong.

Assuming the product itself isn’t a dud – anybody try one? – the issue is likely sales. They like selling big ticket VMAX systems with high-markup flash accelerators. Selling cheaper XtremIO to replace their hard-won data center footprint? Not so much.

As noted in XtremIO embarrassment:

. . . EMC doesn’t want customers to see it as a Symm replacement – which given their likely Xtreme pricing and need to keep VMAX billions rolling in – is simple self-preservation.

But to the sales force it may be more than EMC preservation: sales income preservation.

Courteous comments welcome, of course. Of course, political infighting crippling XtremIO sales is possible. What do you think?