Rackable Systems acquired he assets of high-performance computing (HPC) systems vendor Silicon Graphics Inc. (SGI) for just $25 million today, coinciding with SGI’s filing for Chapter 11 bankruptcy
According to a press release put out by Rackable:
Rackable has signed an Asset Purchase Agreement to acquire substantially all the assets of SGI, and to assume certain liabilities relating to the assets, pursuant to Chapter 11 of the U.S. Bankruptcy Code, under which SGI filed its petition in New York on April 1, 2009. Completion of the transaction is subject to a number of closing conditions, including the approval of the Bankruptcy Court, and other uncertainties. Subject to such conditions and uncertainties, the transaction is expected to close within approximately 60 days. It is expected that SGI’s business operations will continue during the pre-closing period. SGI’s international operations would be part of the sale, but would not be part of the bankruptcy process.
SGI sells hardware and software targeted at scientific labs and other markets where parallel processing of high volumes of files is required. It offers servers and clusters, visualization applications, and services in addition to high-volume storage clusters it calls InfiniteStorage NAS.
Rackable has yet to indicate this, but I wonder if they are acquiring SGI’s assets specifically for the clustered NAS offering. Last summer, Rackable divested itself of the clustered NAS product it had purchased with Terrascale a year earlier. At the time of the divestiture, Rackable said it would be partnering for storage rather than building it internally, and eventually partnered with NetApp.
Rackable CEO Mark Barrenechea didn’t provide too much detail during a conference call with analysts this afternoon, mainly because the deal hasn’t closed and might not be final for another two months. Barrenechea did say there was little product overlap and hinted that Rackable would keep the bulk of both vendors’ products. He didn’t address the NAS partnership with NetApp, but a Rackable spokesperson sent word that no changes in partnerships are expected.
As someone who once upon a time signed up to become a Kodak EasyShare Gallery Member (probably in order to view someone’s photos), I got an interesting message yesterday from Kodak regarding their online photo storage terms of service.
According to the notice, those who store their photos on Kodak’s online galleries will have to purchase paper prints of at least some of their photos each year to keep their data online.
The notice reads:
We wanted to make you aware that we have modified our Terms of Service: To more effectively serve our Gallery members, we have adjusted our photo-storage policy to align with storage usage.
How this affects you.
Once you begin storing photos at the Gallery, you must make the following purchases to continue such storage:
• Members with photo storage of 2 gigabytes (GB) or less must make annual minimum purchases totaling at least $4.99.
• Members with photo storage exceeding 2GB must make annual minimum purchases totaling at least $19.99.
Failure to meet this requirement may result in your photos being deleted from the Gallery.
You are currently compliant with our new policy, so no immediate action is required on your part.
Once you’ve uploaded photos, please refer to your Storage Status within the My Account page of the Gallery website to see the time frame within which you are required to make your next qualifying purchase to meet our Storage Policy requirements.**
We look forward to continuing our relationship with you.
The KODAK Gallery
Maybe it’s just me, but it was jarring to read this in the midst of the other news I’ve been immersed in, such as the proliferation of online services for sharing and storing files like photos, and the death of print media across the country. Kodak’s definitely going against the grain. Why is a company that has an online storage service trying to force its users back into dead-tree-based “file sharing” (at least part of the time)?
It’s one thing to charge for online storage if the free-upload business model becomes less than sustainable. It’s another thing to try to make people pay for unwanted paper photos when what they want to do is store digital photos. Why not just charge customers for online space? Then Kodak can make money, and customers get what they want — a way to store and share digital pictrures.
I expct this will prompt users to leave Kodak EasyShare. There are just too many online-only alternatives these days. Just like the whole point of SaaS for business applications is not having to maintain an internal infrastructure, the whole idea of online photo sharing–to me, anyway–is *not* having to find a place to display or store paper copies of photos.
I sent Kodak a few questions about this notice today, but didn’t hear back.
Drive maker Western Digital is looking to hop on to the solid-state drive bandwagon by paying $65 million for a company that has the technology.
WD today completed a cash acquisition of SiliconSystems, Inc. of Aliso Viejo, Calif., a supplier of solid-state drives for the embedded systems market. The SiliconSystems’ product portfolio includes solid-state drives with SATA, EIDE, PC Card, USB and other interfaces in 2.5-inch, 1.8-inch, and other form factors. WD plans to develop new solid-state offerings to be embedded in OEM systems with the new intellectual property.
Depending on who you talk to, SSDs could become the new tier 1 in storage over the next several years. Not everyone shares such a bullish outlook, but it’s clear to drive makers like WD and Seagate that they must have an offering in this space to compete. Forward Insights president and analyst Gregory Wong sees the acquisition as the only way for WD to develop a competitive offering at this point, noting on his blog today that WD “dabbled” in SSD technology in the early 1990′s.
“However, it appears that early experience wasn’t enough for a latecomer to catch up to the vast improvements in performance and reliability made by SSD vendors recently,” he wrote. “System-level solutions particulary on the firmware side are required to manage the increasing complexities of NAND flash with each new technology generation.”
Wall Street analyst Aaron Rakers of Stifel Nicolaus Equity Research wrote in a note to investors Monday that he expects to see the combined entities focus on positioning embedded SSDs in blade servers.
Three Fujitsu entities are consolidating into a new company called Fujitsu America, the better to align sales according to customer segment rather than specific products.
Fujitsu Consulting, Fujitsu Computer Systems and Fujitsu Transaction Solutions, a retail-equipment business unit, will be combined in the new North American entity, headed up by CEO Farhat Ali. The reorganization divides the sales force into six vertical-market focus areas–healthcare, public sector, telco, manufacturing, financial services and retail.
“We were hearing from clients that various salespeople have come to them but don’t understand the full picture of their industry,” Ali said. “Customers want to know, ‘what do you know about my industry and what are competitors in this industry doing?’”
The first offering under this new plan will be a retail product links Fujitsu’s GlobalStore point of sale application with Fujitsu’s back-end server and storage hardware systems. That’s the most well-developed so far of Fujitsu’s “total value propositions,” meant to deliver an end-to-end IT infrastructure to support a vertical-specific application. Next up is healthcare.
“The front office is really a storefront,” Ali said. “In healthcare we’ve mostly focused on tablet PCs, but we can also add point-of-sale kiosks and integration with medical applications provided by vendors like Cerner through business process management software to connect the two.”
As for storage, the business plan isn’t quite as specifically defined, but Ali said the company has hired several former Veritas/Symantec veterans to strengthen the company’s understanding of storage. The new entity will also become the world’s fourth largest professional services company, behind IBM, Hewlett-Packard/EDS, and Accenture, “depending on the dollar-yen exchange rate,” Ali said.
Fujitsu’s not the only systems vendor to refocus according to customer segments lately. Dell Inc. also reorganized in January and refocused business divisions according to whether their customers fit into small, medium or large enterprise categories.
(0:25) Dell officially launches PS6000 iSCSI SANs
(2:33) Quantum DXi users report slow restores after power loss
(3:29) Seagate introduces BlackArmor NAS boxes
(4:04) The Planet expands cloud cover
(5:41) Compellent picks STEC solid state drives
(6:46) Carbonite sues Promise Technology for unreliable storage
Despite both companies’ protestations to the contrary last year, analysts on Wall Street and in the storage industry still see the coziness between the two companies trending down in the wake of Dell’s PS6000 Series launch today.
As part of its announcement today, Dell noted that the EMC NX-4 array it’s reselling is now shipping. Although Dell did not immediately qualify the product after EMC’s launch, Dell’s senior manager of storage Travis Vigil said “joint customers are still asking for us to produce more joint solutions together.”
But some industry-watchers see a different picture. Wall Street analyst Aaron Rakers of Stifel Nicolaus Equity Research sent out a note to clients today in response to the announcement pointing out a decline in Dell-generated revenues for EMC Clariion and the PS6000′s potential competitiveness with the EMC disk array:
Dell’s continued push with its EqualLogic iSCSI SAN arrays remains important to EMC … as a headline negative. For its January 2009 quarter, Dell had reported that its Dell/EqualLogic revenue grew more than 100% yr/yr [year over year], which implies that the company’s organic storage revenue decline in the mid/high-single digit yr/yr range. The company had reported that PowerVault (low-end NAS) revenue grew solid double digits yr/yr, which implies even weaker Dell/EMC CLARiiON revenue. EMC generated 10.9% of its 4Q08 revenue through Dell, of which the company reported that Dell had accounted for approximately 25% of the company’s total midrange CLARiiON revenue (Emphasis in the original)…
This is down from the disclosed 30-35% Dell/EMC CLARiiON contribution reported a year ago. The new Dell/EqualLogic PS6000-series scales up to a total capacity of 576TB (PS6500E), which compares to EMC’s CLARiiON CX4-series (introduced in August 2008) that currently scales up to 960 drives or up to 951TB in the high-end CX960. The new PS6000E arrays could be positioned competitively against the CLARiiON CX4-240/480 arrays with 231TB and 471TB, respectively. It remains important to note that Dell/EqualLogic systems are iSCSI SAN only (i.e., no FC-based SAN support), which we believe to be the way Dell is positioning CLARiiON relative to EqualLogic.
Other industry sources tell me Dell is positioning Clariion different relative to EqualLogic, specifically leading with Clariion when FC is asked for but now when the customer requires iSCSI or “unified” storage.
. “I think they continue to sell it those customers who want a traditional FC storage system, but they lead with EqualLogic and the value of modular, scale out storage system until the customer asks for something else,” Forrester Research analyst Stephanie Balaouras said. “That’s my analysis, not anything Dell has communicated. Every storage vendor out there knows that in tough economy it can’t be business as usual. It’s the right time to lead with different storage approaches and systems.”
However, even if the relationship is on the decline, it’s unlikely that a breakup is imminent. “It is a marriage of convenience,” said Enterprise Strategy Group (ESG) founder and senior analyst Steve Duplessie. “But it really works. They sell a lot of stuff because of each other. Dell’s got great coverage in places EMC isn’t.”
Duplessie said he’s detected the same tension others are picking up on. “You talk to them and you can see it in their faces,” he said. “They both want to be in control. Dell can’t be happy to see [EMC CEO Joe] Tucci onstage with [Cisco CEO John] Chambers talking about blades, and conversely, if you’re EMC, you can’t be too happy to see Dell buy EqualLogic.”
But, Duplessie added, “if it ain’t broke…it’s not like money is easy to come by these days. I would be stunned if either one of them deliberately ended [the relationship]. I think it would be evolution and a kind of Darwinism that runs its course.”
Online backup service provider Carbonite is suing Promise Technology, claiming that the storage vendor’s arrays did not perform to specifications and prevented Carbonite users from restoring their files.
The lawsuit, as reported by the Boston Globe, was filed in Suffolk Superior Court last week and alleges that Carbonite “suffered “substantial damage” to its business and reputation from products manufactured by Promise Technology Inc. and marketed to Carbonite by Interactive Digital Systems Inc,” which is also named in the suit.
According to the Globe story and other reports over the last several days, Carbonite alleged that it lost 7500 customers’ data in several separate incidents because of the problem with Promise, but Carbonite’s CEO has since released a statement saying that number is misleading:
On March 21, The Boston Globe reported that Carbonite is suing one of its vendors for defective hardware that was purchased in 2007. This lawsuit stems from an incident that occurred nearly two years ago. The article (and subsequent coverage by other outlets) references court documents which say that Carbonite “lost the backups of over 7,500 customers.” It is possible that readers will walk away from this with the impression that 7,500 customers were unable to restore their files from Carbonite. This is not the case. Let me explain.
All of the affected customers had their backups re-started immediately and automatically. A small number of these customers had their PCs crash before their re-started backups were complete. These customers were unable to restore all off their files from Carbonite. We took full responsibility for what happened, and I did my best to apologize personally to each of these customers.
We addressed the technical issues that caused the above problems, and in the nearly two years since the incident, we have not encountered further problems. That said, our lawsuit seeks a refund for the defective products we were sold.
The obvious question becomes, why is Carbonite suing two years later if there have been no further problems? If there have been no further problems, how can Carbonite prove damage to its business and reputation? It sounds like PR-wise, Carbonite is trying to do two different things at once: present a dramatic story to the court in the hopes of winning the lawsuit, while minimizing the drama to its potential customers who may be reading in the press. They probably can’t have it both ways.
Meanwhile, a spokesperson from Promise sent the following statement to Storage Soup this afternoon:
We have looked into Carbonite’s allegations and believe that they have no merit. Our investigation indicates that our products were neither implemented nor managed using industry best practices. … We look forward to a successful conclusion to this matter that demonstrates the quality of our products and our overall commitment to the customer.
I will give Carbonite points for chutzpah, though. Imagine if every enterprise storage user sued their vendor over problems like this. It’s a pretty good indication that storage for cloud services will be under high scrutiny, even as every storage vendor tries to climb aboard the cloud bandwagon.
Compellent today filled in details about its solid state drive strategy, revealing it will offer 146 GB ZeusIOPS SSDs from STEC for its Storage Center systems.
Compellent will preview the SSD drives at its C-Drive user conference May 3-7, but hasn’t disclosed pricing or availability. Its press release today did say Compellent will package SSDs in a two-drive minimum, which it considers enough for a successful tier 0 approach.
Compellent executives first disclosed plans to include SSD late last year, but talked more about its block-level automated data migration for making solid state more efficient than about the actual hardware until today.
During the company’s earnings conference call last month, CEO Phil Soran predicted Compellent could deliver SSDs at about 10% the cost of competing systems by putting only active blocks of data on solid state while keeping inactive data on spinning disk.
It remains to be seen if Compellent can make good on those claims, but users and analysts say automated data migration will play a major role in helping SSD gain traction in enterprise storage. Compellent appears to have an advantage here, even if it trails EMC, Hitachi Data Systems, Hewlett-Packard and others in shipping SSDs.
All those vendors are also using STEC drives, as are Sun and IBM. EMC, first out with SSDs on enterprise storage, last week added support for 200 GB and 400 GB drives.
Hmmm…what could our top story be this week?
In case you missed ‘em:
(0:25) IBM reportedly wants Sun for $6.5B
(1:45) Dell/EqualLogic prepares SSD IP SAN
(2:57) Cisco pushes into servers; storage’s role undefined
(3:50) EMC strengthens Iomega NAS
(4:27) CA makes its SRM more virtualization-friendly
It’s the talk of the IT industry this week, whether you’re in servers, software, or storage–the Wall Street Journal report that IBM is in talks to acquire Sun for — let me write this out — six point five biiiiiiiiiiiilllion dollars. Also known as a 100% premium on current Sun valuation.
I know storage isn’t the major focus of the deal, and it’s more likely driven by Hewlett-Packard, Dell and perhaps server newcomer Cisco putting pressure on IBM’s other divisions. But when it comes to storage, if this merger does take place, all I can see right now is a hot mess. A hot mess with tentacles, even.
It’s not just that both IBM and Sun have less-than-ideal track records when it comes to assimilating recent large storage acquisitions–i.e. Sun’s $4.1 billion attempt to swallow StorageTek and last year’s smaller debacle with IBM’s XIV product. Or that, as former Sun evangelist and current consultant with Capstone Technology Taylor Allis put it, such a merger would represent a culture clash–”East Coast company with its strength in business acumen meets West-Coast Bermuda shorts technology innovation.”
As far as storage goes, one of Sun’s strongest revenue streams is the declining tape market. But what really catches my attention about this possible merger is the tangled web of conflict it would create in the rest of the storage market.
Two major problems stand out immediately, though one of them is the granddaddy of the other. First there’s the matter of high-end disk arrays to consider. IBM has been knocked for its lack of innovation in its DS series of arrays, but has also steadfastly insisted it’s going to keep selling them. There’s already some positioning to work out in the portfolio between the DS series and XIV, and if this merger goes through, you can throw Sun’s longstanding partnership with HDS for high-end disk arrays into the mix. Analytico’s Tom Trainer suggested to me once that IBM may consider OEMing a product from one of its rivals in high end storage, but would they really do such a thing?
Whether they do or don’t sell HDS, there would most assuredly be a struggle over which direction to go. While we’re at it, what of FalconStor, still a partner to Sun for VTL but dropped by IBM in favor of Diligent? “They would have to have colossal arguments,” said Allis. “Between the mix of cultures and a lot of product overlap, it would be a long, painful road.”
But the really big storage elephant in the room here is NetApp.
IBM OEMs practically NetApp’s entire product line as the N series. NetApp claims Sun steps on its WAFL toes with ZFS, and there’s an ongoing lawsuit over the matter. If IBM acquires Sun, does NetApp sue its own best partner? Does IBM drop NetApp? Does IBM attempt to make Sun and NetApp play nice together? Would acquiring Sun amount to IBM taking a position in the copyright fight, where Sun already claims to be winning?
Are any of those scenarios particularly palatable, especially for customers who are invested in IBM’s N-series precisely because it has the IBM brand associated with it, and therefore ostensibly an assurance that IBM would stand behind that product?
Regardless, those considerations probably will be subsumed in favor of the potential combination of OpenSolaris and ZFS with the “software mainframe” idea VMware has been advancing. It’s no secret IBM is enamored with the cloud, and will need a strong strategy and offering in that space. “The embedded storage capabilities in ZFS like software RAID baked into the operating system are similar to DFSMS in the mainframe world,” Allis pointed out. And at least one partnership deal could be simplified in the merger, as both IBM and Sun OEM LSI storage.
Far be it for me to question the value of the software mainframe. That’s not my beat. But if this deal goes through, the storage industry had better buckle up.