The players are lining up for the biggest acquisition game enterprise IT has witnessed in a while

Today is the (a?) day of reckoning in the 3Par saga, with Dell widely expected to make a counter-offer higher than HP’s bid. But this mega deal, like the Data Domain war before it, sends a strong signal to the enterprise IT world: It’s open season on data storage companies! But the rising superpowers are also likely looking at networking as an area of expansion. The game is afoot!

The Competitors

The simple fact is, enterprise IT prefers to buy from large, established names like HP and IBM rather than smaller and less-familiar companies with names like Ocarina, EqualLogic, or even 3Par. The acceleration of sales by enterprise providers is what makes these big acquisitions so successful and why others involving less-powerful players often fail to deliver the same results.

Full-line “superpowers” like IBM, HP and now Dell and the new Oracle can influence purchasing decisions across a broad spectrum of hardware and software. Many large organizations are tightly coupled to one of these vendors, and will give their products stronger consideration even when they are new or unfamiliar. HP is already flexing their muscle selling their broadened network lineup, and Dell found that it could do this in data storage.

Software vendors like Microsoft, Citrix, and Oracle adamantly maintained a neutral stance toward hardware, but Ellison and company seem serious about changing this. Oracle’s success in selling Sun hardware will likely dictate further software acquisitions for Dell and HP, though IBM already has strength there. Then there is Intel, the wild card who just got wilder with their acquisition of McAfee.

Companies with narrower focus like Cisco, EMC, NetApp, Juniper, and Brocade have the same power within their sphere of influence but cannot pull in wholly-distinct products. Cisco is in the midst of this fight with their technically-excellent UCS blade servers: Although they were certainly a strategic CIO-level vendor in the largest organizations, “blades from a networking company” isn’t the as easy a decision as “networking gear from a full-line company.”

The Game

Then one must consider the market in contention. The enterprise IT space is not expanding, especially in the United States. This is very close to a zero-sum game, with Oracle’s or Dell’s wins being HP’s or IBM’s losses and vice-versa. There is massive money in play, and flexibility enough for it to swing between the competitors, but growth is not unlimited.

Enterprise storage and data center and campus networking are two areas where smaller companies retain enviably-large slices of the pie, explaining the interest in these spaces among the superpowers. These verticals still have room for sales to grow without displacing a fierce full-line foe, and the superpowers have lately been weak here. Storage and networking are enticing opportunities, but each slice is similarly dominated by “vertical superpowers” and partners EMC and Cisco.

So this is the game: Four full-line enterprise superpowers battling each other for datacenter dominance and coveting the extra profits of a few verticals. HP clearly believes they can chip away at EMC and Cisco in storage and networking; Dell and IBM have so far focused mainly on storage; and Oracle hasn’t made a move in either direction, instead challenging the other three in the core server and software space.

Pawns or Knights?

So where does this leave the smaller players? Are they merely pawns in the game, waiting to be sacrificed, or are they knights who can wield power across the field? The largest (Cisco and EMC especially) appear to have ambitions of their own as well as the financial and technical strength to shake up the game. They are unlikely to be acquired by the superpowers. Brocade, too, has broad strength in storage and networking but maintains relationships across the board that make an acquisition difficult.

Strong vertical players like Juniper, NetApp, Riverbed, and Compellent are ripe for acquisition, as were Foundry, 3Com, Data Domain, and 3Par. IBM, Dell, and Oracle are all likely buyers of the networking players, though HP may consider filling in where 3Com was found lacking. All four will likely take a strong look at the remaining storage players as well, with the loser in the battle for 3Par likely to be hungry indeed.

One should also consider the potential impact of smaller acquisitions. Although they would not immediately “move the needle” for a massive superpower, there are many excellent technology companies that could be bought low and pushed strongly. The enterprise-class technology at Sepaton, Pillar Data, Xiotech, BlueArc, Extreme Networks, Force10, Blue Coat, Isilon, CommVault, FalconStor, and many others should not be overlooked. If a superpower can drive a larger acquisition to succeed, imagine what they can do with strong but inexpensive technology from one of these!

Stephen’s Stance

This game is nowhere near finished. The 3Par acquisition will not only generate revenue, it will shake up the ranking of data storage array dominance. This is very likely to kick off additional acquisition in the data storage space, spurring either Dell or HP to pick up additional technology and perhaps causing IBM or Oracle to engage as well. With no easy alternatives to 3Par, I expect Compellent, Xiotech, and Pillar to get closer looks, but Sepaton and BlueArc are just as ripe. NetApp may be too expensive at this point, but would be a nice match for Oracle’s strategy.

HP’s acquisition of 3Com could also signal a race to integrate datacenter and campus networking technology into the stack. Many are suggesting a Brocade acquisition, and it would be much cheaper than Juniper, but OEM ties make it a difficult purchase for any of the superpowers. Extreme and Force10 would be excellent and less-expensive alternatives.

We should also keep our eyes outside the superpower space. Intel showed that they can make big moves, and Microsoft might consider a diversification into hardware as well. One should also look to the East, where Huawei could try to enter the Western market with a merger or joint-venture to cast off the China stigma. Although I would love to see a rebel alliance rise (imagine Juniper, NetApp, and Symantec joining forces!) this is not a likely scenario.

Image credit: Chess Board by mosdave

© sfoskett for Stephen Foskett, Pack Rat, 2010. | The Enterprise IT Acquisition Game
This post was categorized as Computer History, Enterprise storage, Everything, Gestalt IT, Virtual Storage. Each of my categories has its own feed if you'd like to filter out or focus on posts like this.

Paul goes on to quote me, saying I “didn’t think primary data de-duplication technology was ready for prime time just yet.” I absolutely did say these words, but I am not sure if my point came across.

I’ve recently expounded about the benefits of deduplication technology, but have warned that it might not be all it’s cracked up to be in primary storage environments. By “primary” I mean those storage environments serving mission-critical applications. Although dedupe works great for backup and archiving, the random I/O, low latency, and high throughput of primary storage (and especially virtualized servers) might be too much for current systems. And as of now, only NetApp, Riverbed (soon), and startups greenBytes (see my story) and Ocarina (more on them another time) were willing to go on record with me as supporting deduplication of primary storage.

So what I meant was that deduplication is not yet ready for prime time in primary storage applications. No one should hesitate to use the technology for backup or archiving at this point, but make sure you do a thorough evaluation of the specific product you are selecting to make sure it delivers the performance you require!

© sfoskett for Stephen Foskett, Pack Rat, 2008. | Is Deduplication Ready for Prime Time?
This post was categorized as Enterprise storage, Virtual Storage. Each of my categories has its own feed if you'd like to filter out or focus on posts like this.

Although deduplication of storage is nothing new, with Data Domain and other making hay with the technique for years, it has never been ready for prime time – reduction of active primary storage applications like email and databases. Instead, deduplication has been relegated to second- or third-tier status, deduplicating archives and backup data. But change is in the air, and deduplication vendors are starting to bustle towards the bright lights of primary storage.

Stone Knives and Bear Skins

We have all been here before, of course. Back at the dawn of the personal computer era, data compression was a hot topic of conversation. I recall being so impressed by an article in Byte (1986:5, p99) outlining Huffman coding that I tried cooking up an implementation in Atari BASIC. Lossless compression has a magical pull to the geek in many of us – redundant data just wants to be eliminated!

Stacker dominated the disk compression world - until Microsoft introduced DOS 6.0

Companies soon applied compression to primary storage, especially the limited storage in personal computers. Stacker was a hit after 1990, until Microsoft built a workalike, called DoubleSpace, into DOS 6.0 in 1993, leading to a historical lawsuit. I personally used the ADDSTOR disk compression built into DR-DOS 6.0 to stretch two more years out of the 20 MB MFM hard drive in my AT&T PC6300 at WPI.

But something funny happened in the late 1990s: Compression began to lose its luster. Compressing data always takes quite a bit of CPU power, but this was offset somewhat by the truncated data transfers and more-efficient file system layout afforded in early PCs. But as disks got larger and faster, using precious CPU time to save space seemed less and less compelling. Today, although nearly every operating system includes built-in compression of files, folders, or perhaps disks, these features are rarely used. And compression was never popular in the performance-sensitive enterprise space.

Deduplication Has a Nice Ring

Although traditional fine-grained compression has not been very successful in the enterprise, its lanky cousin, single-instance storage, has long found niche jobs. Applications from databases to email systems to file servers have long had the ability to recognize to requests to store the exact same file or record, and to store just a single instance in this case. Even file systems have the ability to do single instance storage through the use of links, though this is initiated by the user rather than in an automated fashion.

In the late 1990s, FilePool began developing a content-addressable storage device, which was acquired by EMC in 2001. This device, later known as the Centera, was one of a number of storage platforms targeted at the archiving market introduced this decade. At the same time, virtual tape libraries made the jump from the mainframe to open systems. Both devices, being outside the critical path of performance but offering massive capacity, were well-suited to implement advanced capacity optimization technologies that combined the concepts of compression with single-instance storage. Thus was created the modern world of data deduplication.

What we think of as deduplication is neither fish nor fowl: It assesses larger “chunks” of data than compression technologies, delivering greater capacity savings and potentially reducing performance impact, but is more flexible than single-instancing, recognizing the similarities within files or objects.

But it is still maddeningly difficult to scale deduplication while maintaining performance. Rather than fight to maintain reasonable write throughput, most deduplication products have switched to post-processing, deferring their work to quieter times.

It’s Not Just for Breakfast

Regardless of their methods or underlying technology, no deduplication vendor has stood up to support challenging low-latency or high-throughput production applications, however. NetApp was the first to raise the issue of support for production applications, but although they tout the technology for VMware, they haven’t exactly been shouting from the rooftops to get their A-SIS deduplication technology deployed in other high-I/O applications. And I haven’t seen Hifn’s card yet.

Yesterday, I mentioned that greenBytes was adding deduplication to their ZFS-based storage array for primary data. And now Riverbed has fired another shot over the bow, repurposing their (deduplicating) WAN accelerator product for primary (file) storage. They might be able to pull it off, too, since they have a long list of customers who are already enjoying the technology in production. It’s not a stretch to suggest that Riverbed’s appliances can scale to handle production data loads. Although it’s file-only, I can imagine quite a few scenarios where this tech could really yield benefits. Could we come full-circle, with deduplication finally reaching the enterprise storage world?

© sfoskett for Stephen Foskett, Pack Rat, 2008. | Deduplication Coming to Primary Storage
This post was categorized as Computer History, Enterprise storage, Features, Virtual Storage. Each of my categories has its own feed if you'd like to filter out or focus on posts like this.

Overall, I was impressed with many of these products this last year, but certainly CommVault, HDS, ProStor, Xsigo, and Akorri (winners all) stood out with important products. I too was surprised to see the absence of some heavyweights: Symantec’s strength in archiving and backup didn’t net them an award, and both Emulex and QLogic were skipped for the 8 Gb FC market. EMC was overlooked, too, but I’m certain that will be remedied for 2008 after the flurry of excellent new products announced these last few months.

Backup Software

• Winners: CommVault’s Simpana 7.0 – an impressive product that brings a very wide range of data protection features in an integrated package. They’d be in my top three! Next was the intriguing RecoverGuard from Continuity Software, a product which intrigues me. Finally, Yosemite’s amazingly priced FileKeeper Professional took bronze – I definitely would have put this up there, too!
• Strong contenders: EVault’s solution would have been my pick since it effectively tackles a real need – mobile and SMB data protection! Also, Symantec’s strong NetBackup 6.5 upgrade deserved more attention.

Backup Hardware

• Winners: NEC’s HydraStor HS8 isn’t a platform I’m familiar with – I’ll have to take the judges at their word! But I can’t argue with silver and bronze winners, Copan and ProStor’s cool RDX – both are truly revolutionary products and deserve the spotlight.
• Strong contenders: I would definitely have added Gresham’s Clareti VTL to the list – it’s much more than “just a VTL” and I hope it gets some more attention!

Disk and Disk Subsystems

• Winners: Seagate’s Momentus 5400 FDE.2 deserves considerable attention, bringing built-in hardware encryption to the mobile data market – every mobile disk should have this technology! NetApp’s FAS2000 (silver) is nice enough, but I was much more impressed with the bronze-winning USP V from HDS this year.
• Strong contenders: I would have given the USP V the top prize for 2007, but I can’t argue with the little Seagate disk. The AMCC 3ware 9600 RAID adapter deserves some attention, too.

Storage Management Software

• Winners: Akorri’s BalancePoint (gold) impresses me much like bronze-winning Onaro’s Application Insight does. Both make the big leap from “storage” to “application data”, and both are worthy winners. I’ve never used the silver-winning Finisar NetWisdom product, but it looks like others are impressed with it.
• Strong contenders: This was a crowded field, and Symantec, WysDM, Quantum StorNext, and the rest probably came close. I agree with the Akorri placing, but would have picked one of these instead of the potentially mis-categorized Finisar product.

Networking Equipment

• Winners: Xsigo took the top honors with their InfiniBand-based VP780 platform. This is truly a next-generation product, and it is getting serious attention and traction, and deserved a spot on the list! Riverbed’s excellent Optimization System (silver) also deserved its ranking, but I’m not familiar enough with the Storwize product to know if it’s truly bronze-worthy.
• Strong contenders: I would have tipped either QLogic or Emulex‘s 8 Gb offerings for a spot. Despite my jokes, 8 Gb FC is an important element of the modern SAN and both companies have carved out a compelling product, but apparently neither shipped in volume until this month…

© sfoskett for Stephen Foskett, Pack Rat, 2008. | Reacting to TechTarget’s Storage Products of the Year
This post was categorized as Enterprise storage. Each of my categories has its own feed if you'd like to filter out or focus on posts like this.