Quantum has aggressively chased the data deduplication disk backup market over the past year with a complete product refresh of systems beginning with SMBs and stretching to the high end of the enterprise. Still, the vendor has yet to make a major impact from a sales perspective.
Quantum reported earnings of $168 million Wednesday, coming in near the low end of its previous guidance, far below Wall Street expectations and down from $175 million in the same quarter last year. Its disk and software (deduplication) revenue was $30.6 million, representing a small slice of that market.
While the numbers don’t provide a ringing endorsement of Quantum’s product line and strategy, it does show progress, CEO Rick Belluzzo said. Belluzzo prefers to compare revenue to the previous quarter than last year’s numbers that included revenue from an OEM deal with EMC that ended after EMC bought Data Domain. Belluzzo said Quantum’s branded (non-EMC) revenue rose $13.2 million sequentially and branded DXi sales increased 19% over last year.
Quantum’s largest system, the DXi8500, will begin shipping in the next few weeks.
“We’ve worked over the last six months to transition the business,” Belluzzo said. “There’s a lot of energy and excitement around these products.”
As for the results, he said, “Of course this isn’t good enough and it is where we have focused our investment both in terms of enhancing our product offering and building greater revenue or market momentum.”
Quantum’s data dedupe strategy is to position its DXi products as the major alternative to EMC’s market-leading Data Domain appliances and go after non-EMC customers. It is building its channel and industry partnerships around that plan.
“There are a lot of competitors out there, but when it comes to target-based dedupe, it quickly becomes data Domain and us,” Belluzzo said. “When a customer is building a system that’s optimized for deduplication and replication, Data Domain is always in the deal.
Quantum’s strategy has made it an ally of NetApp, although not implicitly. NetApp was left with a hole in its backup product line after EMC outbid it for Data Domain last year, and many in the industry thought it might turn to Quantum to fill that gap. NetApp hasn’t done that with a direct partnership, but this week it said it is reselling Fujitsu’s CS800 S2 Data Protection Appliance in Europe and the Fujitsu appliance uses Quantum’s dedupe software. Belluzzo said Quantum is also working with NetApp channel partners to provide a dedupe alternative to Data Domain.
But there is no official partnership between the two vendors. “We have a good relationship with NetApp, especially in some geographies,” Belluzzo said. “It’s a little bit of best of breed of NetApp disk and our deduplication. It’s not uniform, or pushed at the highest level at NetApp, but it often happens at the channel level.”
Fujitsu this week disclosed that it was the dedupe OEM partner that Quantum talked about in January but couldn’t name. That was no surprise because Fujitsu started shipping its dedupe around that time, and its product description sounded just like DXi software. Belluzzo said Fujitsu won’t make up for the lost revenue from EMC, though.
“It isn’t an EMC-like agreement, that’s for sure,” he said.
Compellent is preparing a major refresh of its SAN systems by the end of the quarter, CEO Phil Soran said Tuesday on the vendor’s earnings report conference call.
Soran didn’t give specifics on the launch, but called it “the largest, most comprehensive hardware and software release in our company history.” He said the next version of Storage Center will increase performance and scalability, but will be based on Compellent’s existing architecture.
The release is noteworthy because Compellent hasn’t done much with its storage system hardware since it first rolled out Storage Center in 2004. The vendor’s strategy is to keep adding software features, such as the Data Progression automated tiered storage application, Dynamic Capacity thin provisioning and Remote Instant Replay remote replication. Soran said there will be software enhancements too for the upcoming system, including the Live Volume data migration application the vendor previewed last year.
“Over the next few quarters you’ll see a series of new product releases that … will provide enterprise data centers greater performance, scalability, efficiency, ease of use and reliability, and all will be based upon our existing virtualization and dynamic block architecture,” Soran said of the upcoming product launches.
The new systems will come as Compellent faces additional competitive challenges. Hewlett-Packard’s acquisition of 3PAR has increased HP’s midrange product offering, and EMC is preparing a low-end midrange system that is expected to be sold exclusively through the channel, the same go-to-market strategy used by Compellent.
Compellent had strong results for last quarter, beating Wall Street expectations by a wide margin with revenue of $42.1 million for a 31% increase over last year.
If Isilon is for sale as many believe, then the scale-out NAS vendor’s most recent financial results likely made it more valuable to a suitor. The third quarter of 2010 was Isilon’s most profitable and it increased revenue 77% over last year.
But Isilon CEO Sujal Patel said his main focus is continuing the company’s recent product expansion and channel growth, and the only acquisitions he was willing to talk about involved Isilon as the acquiring company.
“We never comment on rumors and speculations,” Patel said when asked if Isilon had hired a firm to help facilitate a sale. “We are heads down executing on our business model, driving rapid technology innovation, building our business and taking share from legacy vendors.”
He did say Isilon might explore buying smaller companies to drive its product development. That would be a departure for Isilon, which has never acquired another company.
“We’ve begun to think seriously about smaller acquisitions that would be beneficial to our business,” he said. “They would be acquisitions complementary to our channel. But nothing in the near-term.”
Isilon has spent nearly two years expanding its product platform with systems and management software to make its storage more geared toward the enterprise rather than verticals such as media/entertainment and life sciences. Perhaps the biggest step was one that hasn’t driven many sales yet for Isilon – the addition of iSCSI announced in late August.
Patel said that could be the most significant product in Isilon’s history. “It makes Isilon suitable for block-based storage,” he said. “We’re taking a measured approach to get into the SAN market. More and more as customers get comfortable with the technology, they’ll look to extend us into managing Microsoft SQL and Exchange and Oracle.”
Another thing taking Isilon from a niche high-performance file storage product towards a mainstream enterprise system is its data protection and management software. Software made up 14% of Isilon’s revenue last quarter, up from 11% the previous quarter.
All these additions have made Isilon more competitive against traditional NAS vendors NetApp and EMC, who is reportedly leading the parade of Isilon suitors.
Isilon’s revenue of $53.8 million last quarter was up 19% from the previous quarter and helped the vendor record its third straight profitable quarter with $4 million of net income. Isilon raised guidance for this quarter to $59 million to $60 million, which would bring it to close to 60% year-over-year growth for all of 2010.
Isilon’s results and plans make it worth watching, whether it gets gobbled up by a larger vendor or stays independent long enough to continue its long-range strategy.
While Simpana 9 gained attention mostly for its source data deduplication and array-based snapshot features when it launched earlier this month, CommVault is also looking to increase its presence in compliance and e-discovery with the latest version of the data management suite.
The vendor set out to improve its information management capabilities in the new version by redesigning its Web interface for search (using Microsoft’s FAST) and overhauling its data mining, classification, records management, work flow management, role-level access and legal hold features.
CommVault calls the process Retention Lifecycle Management (RLM), which CommVault’s information access management director Simon Taylor compared to ILM for compliance.
When asked if Simpana was crossing into content management, Taylor said: “We are going in that direction. We are able to retain objects, and classify and virtualize them over time. We also move data across tiers to the cloud. It’s about better retention and access to information.”
Enterprise Strategy Group analyst Brian Babineau CommVault said has made it easier to search and classification information with Simpana 9 by adding search within search and automatically tagging data based on pre-defined criteria.
“CommVault has always been strong on the capture side,” he said. “[Simpana] could manage the data in a backup or archive workflow. Now, it’s made it much easier from the GUI to the actual information classification so you can navigate it. So now users can actually find data and take more action with it.”
He said the addition of templates that let users customize workflows also simplifies records management, but a key area to watch will be Simpana’s search performance.
“If you have existing rules in a content management and want to add email, you don’t have to connect email to your content management system, you can create a template in Simpana,” he said. “Of course, I think they will still be questioned on their search response times.”
Nobody knows if Isilon Systems will be the next storage vendor to get acquired, but it’s clear that Isilon executives want to be the next. The scale-out NAS vendor has hired a firm to explore a sale, and has been linked with just about every large storage vendor since Hewlett-Packard gobbled up 3PAR last month.
The New York Post last Friday reported EMC is in exclusive talks to buy Isilon for more than $2 billion. I don’t know about the exclusive and $2 billion parts, but it’s likely that EMC is interested in Isilon. So are other storage vendors, mainly because EMC and others have failed to either develop their own clustered NAS or successfully integrate the technology after acquiring it from others.
EMC took a shot with its Hulk and Maui projects, which turned into its Atmos cloud platform but not the type of scale-out NAS system that media and Web companies crave for their storage needs. NetApp acquired Spinnaker in 2003 and still hasn’t fully integrated its clustered IP into the DataOntap operating system. IBM created its own, brining out SONAS last February. It’s too early to say if that product is a success, but it figures prominently whenever IBM presents its storage roadmap. HP acquired PolyServe in 2007and when that didn’t work out, it bought Ibrix last year. HP also talks up its XP9000 platform based on Ibrix a lot these days. Dell acquired the IP of Exanet earlier this year, and plans to use it for clustered NAS and multiprotocol storage in combination with EqualLogic but has yet to bring it to market.
In a research note today, RBC Capital Markets analyst Amit Daryanani, suggested that much of the interest in Isilon could be defensive. In other words, vendors want to keep their rivals from buying it.
“We suspect EMC would be the most likely acquirer, as it lacks a storage platform with a single management platform and its Celerra-NAS platform doesn’t scale as efficiently as Isilon,” Daryanani wrote. “Plus, the harm this could do to NetApp would make the deal even more appealing.”
As for NetApp, he wrote: “We would not be shocked to see NetApp interested in acquiring Isilon as a defensive move to keep its unified storage advantage versus EMC. Also, an Isilon acquisition by any of the other suitors would harm NetApp’s revenue stream.”
Daryanani also mentioned Cisco, Dell, HP, IBM, and Oracle as possibilities but admitted Cisco and Oracle were unlikely to make a bid.
The feeling here is that HP and IBM are willing to go with their relatively new scale-out products rather than throw money at another option. NetApp probably won’t get into another bidding war with EMC after losing out for Data Domain last year. Dell might find integrating Exanet more difficult than originally anticipated, but Isilon’s technology is proprietary and does not work with other vendors’ storage. That would make it even tougher to integrate with EqualLogic.
That leaves EMC, which could position Isilon at its clustered NAS for high performance, rich media and web customers while clearing the way to consolidate its current Celerra NAS with its Clariion SAN platform.
One thing is clear: Whoever buys Isilon will be overpaying. That’s because any large vendor could have picked it up for a lot less money a couple of years ago instead of exploring other options.
Iomega is getting into high-performance Flash. The first step is a portable drive for consumers and SMBs it will begin shipping next month. The next step is adding solid state drives (SSDs) to its NAS platform.
That’s the plan laid out by Jonathan Huberman, president of EMC-owned Iomega. The vendor today launched the Iomega External USB 3.0 SSD Flash Drive that is about the size of an iPhone. The SSD device comes in capacities of 64 GB, 128 GB and 256 GB.
Huberman said the same form factor will be used for Iomega’s NAS soon. He doesn’t have a timeframe because the company has to make tweaks to optimize it for the SMB NAS devices.
“It will be the same flash and the same form factor,” he said. “We’re architecting our NAS stack now.”
Huberman said USB 3.0 support is the key driver for the external drive, as well as decreasing Flash prices. “Without USB 3, you miss a lot of the benefits of Flash because you’re capped by USB 2 performance,” he said. “And price points continue to come down. Historically, the price/value equation wasn’t attractive. Now it makes sense for our customer base.”
The External SSD Flash drive costs $229 for 64 GB, $399 for 128 GB and $749 for 256 GB.
EMC and Oracle shared a lot of headlines this week. Two days ago, EMC brought out its Greenplum Data Computing Appliance that will take on Oracle’s Exadata system. Then Thursday, the companies were linked by rampant rumors that Oracle is looking to buy EMC in a blockbuster deal.
Despite the speculation, it’s a lot more likely they will go on as competitors and in manay cases partners than they will merge into one company.
It’s hard to say exactly how the rumor got started. There was a note from a Wall Street analyst Wednesday speculating on companies that Oracle might buy. EMC was on that list of 12 companies, listed as a potential long-shot. Still, that touched off a spark among investors, who had probably been hearing whispers that Oracle wants more storage and is intereted in VMware. EMC owns more than 80% of VMware, but is unlikely to sell that valuable asset on its own.
“I don’t know who started this talk,” a Wall Street analyst who covers storage told me. “I am sure there are bankers pitching EMC to Oracle, even if that deal doesn’t make any sense. Usually the target leaks these things, but I’m pretty sure EMC did not leak or start the rumor.”
After all the big deals we’ve seen this year in technology, more credence is given to rumors than usual. But this deal doesn’t seem credible, for several reasons:
Too expensive – Most analysts say EMC plus VMware would be worth more than $50 billion. Oracle would have to finance at least two-thirds of that, and that might not be so easy to do these days.
Too complex – Integrating large companies always brings about a transition period where product development and sales take a hit. The bigger the company that gets integrated, the longer this period usually lasts. Oracle is just about finished with its Sun integration, is this a good time to start another?
Too much technology – Oracle has shown with Exadata and its recent ZFS Storage Appliance upgrades that its strategy is to sell storage specifically to make its databases run better. While EMC would make a case for its storage doing that, what about all of its other products? Does Oracle want EMC’s full backup, security, and content management platforms? It would have to pay for all those pieces whether they fit or not. It could sell off the parts it doesn’t want, but that just adds to the complexity of the deal.
If Oracle CEO Larry Ellison wants a broader storage portfolio than he got from Sun, he’s better off going for a smaller company such as NetApp. If he wants VMware, he’s probably out of luck.
Overland Storage today picked up the intellectual property of failed clustered file system startup MaxiScale, and Overland CTO Geoff Barrall said the technology will enable the vendor to deliver scale-out versions of its SnapServer NAS platform.
Barrall said about five to 10 of Maxiscale’s engineers will join Overland, which acquired the Snap portfolio from Adaptec in 2008 for $3.6 million in an attempt to become a storage systems vendor instead of only selling tape. The Snap line is a key piece of Overland’s turnaround plan under CEO Eric Kelley, who was Snap’s CEO when Adaptec bought it in 2004.
MaxiScale’s Flex software was developed to run with commodity hardware. Barrall said he’s hoping to release Snap clustered NAS systems by mid-2011. Overland has already brought out Snap iSCSI SAN and unified storage products.
“Adding scale-out feature to SnapServer line was definitely on the list of things we wanted to achieve,” he said. “This is a great opportunity for us.”
Overland did not disclose the purchase price, but MaxiScale had $25 million in venture funding and no paying customers. MaxiScale launched its first product in Sept. 2009 and was preparing to bring out a second-generation product when it ran out of money.
Barrall said Overland would not market MaxiScale’s existing or planned products, which were targeted at customers such as cloud providers and web companies with large amounts of small files and millions of concurrent users. He said he Overland will tailor MaxiScale’s technology intended for high-end products to the lower-end and midrange NAS markets that Snap addresses.
“They were targeting large server clusters,” he said of MaxiScale. “Their technology scales well. You really don’t have this technology in products in the price range we sell into.”
He didn’t rule out using the technology for a new product platform down the road, though. “A file system comes with the client that you can access through the NAS,” he said. “You can install the client on a server for direct access to the cluster. You can bring Exchange and SQL databases onto the NAS. There’s definitely interesting things we can do there.”
But the first priority is to make MaxiScale’s technology fit with Snap products. “Our goal is to make the technology straightforward to use,” Barrall said. “We want to make it easy for customers to scale and keep all their data in one area.”
Barrall said there were connections between the companies because several Maxiscale executives were former Snap employees before Overland bought Snap. There is another connection – Barrall and Maxiscale CEO Gianlucca Rattazzi were founders of NAS vendor BlueArc.
MaxiScale raised just under $8 million in a B funding round over the last year, but it wasn’t enough to keep it going.
“MaxiScale had a great story, but needed execution,” Server and StorageIO analyst Greg Schulz said. “In some ways it was a company with IP focused for a market that had not evolved enough to be commercially viable. In the end, great stories and strategies need execution, time, money and patience – at least two of which investors often are not comfortable with.”
QLogic this week sought to raise the bar for network convergence products. The vendor launched its third-generation 10-Gigabit Ethernet converged network adapter (CNA) and NIC, and its first converged LAN-on-motherboard (cLOM) chip. The products can help nudge the industry toward Fibre Channel over Ethernet (FCoE) adoption, or at least introduce more Ethernet into storage networks.
QLogic’s new products allow organizations to run FCoE, iSCIS and Ethernet traffic concurrently and use GigE and 10-GigE from one chip with its FlexLOM technology. John Spencer, QLogic’s manager of product marketing for its host solutions group, said he expects OEM and channel partners to sell the new products by the end of the year. Spencer didn’t name any partners, but QLogic’s press release quoted Dell, EMC, Hewlett-Packard and IBM.
QLogic also added features it calls ConvergeFlex, VMflex, FlexOffload, and SecureFlex. Ovbiously, the theme here is flexibility.
ConvergeFlex lets customers change protocols without taking down their servers.
VMFlex lets organizations carve physical ports into virtual ports and assign guaranteed bandwidth to each port. Customers can create four virtual ports per physical port and works with any 10-GigE Ethernet switch.
FlexOffload moves the workload from the processor to the adapter, freeing up bandwidth for virtual machines and applications.
SecureFlex encrypts data in flight over the network, and leaves encryption of data at rest to the storage array.
Wikibon analyst Stu Miniman said the best thing QLogic has going for it is expertise with all the protocols required for convergence while its competitors have had to add pieces of the stack.
“The biggest difference I see is QLogic has flexibility across Fibre Channel, Ethernet with FCoE and isCSI, and InfiniBand,” he said. “Today QLogic is the only vendor with the ability to run FCoE, iSCSI and TCP/IP concurrently. QLogic has more options than the competition.”
In a blog on QLogic’s new products, Miniman wrote the pieces for an all-Ethernet data center are emerging. However, he warned that convergence may be less of a money-saver than a process of merely keeping up with growing bandwidth requirements.
“Many people think that convergence will reduce spending but in fact it will only allow us to keep pace with the escalating server bandwidth requirements,” he wrote. “Wikibon estimates that in the next 72 months, servers will need close to 100X the bandwidth of today but traditional methods of delivering that capacity will fall far short of requirements. We believe that the market will need 6X what Moore’s Law alone will deliver. As a result, users should plan on buying more, not less equipment and they need to endeavor to find ways to reduce I/O consumption using techniques such as compression.”
IBM launched two new storage systems today. The Storwize V7000 is a brand new midrange array and the DS8800 is an upgrade from its DS8700 high-end enterprise SAN system.
IBM will hold a live event and webcast this morning to formally announce the systems, and we’ll have more on SearchStorage.com following that event, but the vendor has already released some information on the products.
Interestingly, IBM is using the Storwize brand for its new midrange array without any of Storewize’s primary data compression technology in the product. IBM acquired Storwize for around $140 million in July.
The Storwize V7000 is IBM’s only internally developed midrange system. IBM also sells midrange storage through its OEM deal with LSI, but recently discontinued the internally developed DS6800 that it had positioned as a high-end midrange/low-end enterprise product. IBM positions the V7000 as competitive with EMC Clariion CX4, HP EVA and Hitachi Data Systems AMS storage.
According to a blog by IBM Master Inventor Barry White today, the V7000 has the same SCSI front-end and back-end as the IBM’s SAN Volume Controller (SVC) storage virtualization product, and can virtualize the same storage from competitors as the SVC. “Why not stick your Clariion behind one and see a performance boost,” Whyte wrote.
The V7000 includes Easy Tier, thin provisioning, dynamic migration and FlashCopy built in.
The Storwize V7000 system has 2U controller and expansion enclosures. Controller enclosures consist of dual controllers and drives, and expansion controllers only contain drives. The system supports 24 2.5-inch drives or 12 3.5-inch drives, and each controller enclosure can connect to nine expansion enclosures. The V7000 holds 6 Gbps SAS drives and 300 GB solid state drives (SSDs), and a system can contain 2.5-inch and 3.5-inch enclosures.
Each enclosure can hold 24 TB with 12 2 TB nearline SAS drives or 14.4 TB with 24 600 GB performance SAS drives. A 20U half-rack system can hold 480 TB of raw capacity. The V7000 supports 300 GB 2.5-inch E-MLC (enterprise-grade multi-level cell) SSDs, and can hold 72 TB of SSD capacity in one system.
A dual-controller system has eight 8 Gbps Fibre Channel and four Gigabit Ethernet iSCSI host ports.
The DS8800 consists of incremental changes from the IBM’s DS8700 high-end enterprise SAN system, with most of the microcode remaining the same. The major design change is the DS8800 has front-to-back cooling instead of the DS8700’s chimney design of taking cold air from front and back and sending hot air out the top.
The DS8800 scales higher than the DS8700, and uses faster Power6-plus processors with dual-core 8 Gbps Fibre Channel and FICON host adapters. It also supports 2.5-inch 6 Gbps SAS drives. The denser DS8800 holds 1,000 drives in three frames, compared to five frames required for the same amount of drives on the DS8700.
IBM said the DS8800 won’t support Easy Tier sub-LUN automated tiering software that moves data between SSDs and hard drives until next year.