Last week, we wrote about some early storage industry predictions for 2010 from analysts and users, but more industry experts have since checked in with their outlooks for the coming year. Here are a few of the themes from these latest predictions from Symantec Corp., Enterprise Strategy Group (ESG) and Forrester Research:
SMB vs. Enterprise: opinions vary
One of the more interesting common topics explored by these reports is the outlook for technology adoption among different sizes of business. Beyond that similar focus, however, there are some significant differences in how different organizations see the market developing.
According to Symantec’s State of the Data Center survey, midsized enterprises are “leading the way” with adoption of new technologies like cloud storage. According to Matthew Lodge, senior director of product marketing for Symantec, the midsize enterprise data center, defined by Symantec at 2,000–9,999 employees, has a “more intense” data center than larger counterparts. “They’re deploying more applications [than larger companies] and expecting major changes in 2010,” Lodge said. He says new applications are driving more stringent availability requirements, while staff remains tight among these organizations.
ESG, meanwhile, has a different view of what makes a midsized business in its preliminary 2010 spending research, according to research director John McKnight. “Generally speaking…[midsized organizations according to ESG’s definition] almost always lag the enterprise in adoption of all new technologies,” McKnight wrote in an email to Storage Soup. “There’s a lot of conventional wisdom that cloud/SaaS adoption will be led smaller organizations. That may be true in the small business segment (i.e., the “S” in “SMB”) but our data has never shown much of a discrepancy between midmarket and enterprise when it comes to cloud.”
Pent-up demand? Capex vs. Opex
While ESG and Symantec surveyed enterprise storage managers, The Forrester report takes a higher-level view of the overall global IT market, predicting that
The US IT market will grow by 6.6% in 2010 (twice the 3.1% growth in nominal GDP), following a drop of 8.2% in 2009. The global IT market will rise in 2010 by 8.1% in U.S. dollars, and by 5.6% in local currencies. Growth will start slowly in 2010 but pick up steam later in the year, with computer equipment (especially PCs and storage) and software leading the way, and IT consulting services following.
Again, there are differences in outlook among 2010 storage outlook research when it comes to how much spending might rebound in 2010 from 2009 levels, as well as whether the rebound will be focused on capital expenditures (capex) or operational expenditures (opex). While IDC’s 2010 predictions reported on last week predicts IT will undergo “a shift away from capital cost efficiencies to operational cost efficiencies” and the development of “a business-level bias in most companies toward virtualized and/or services-oriented offerings for storage solutions,” from ESG’s perspective that transition happened last year.
While IDC predicts continued spending constraints leading to evaluatoin of services offerings among storage pros, ESG sees justifications for purchases this year trending to “more than just cost-cutting”, according to ESG analyst Mark Peters. “We’re seeing the beginning of a shift toward getting back to business in IT,” he said. “There’s a bit of a softening and cautious optimism.”
According to the preliminary ESG research report, of approximately 500 respondents, 52% said IT spending would increase from the previous year, as opposed to 43% in 2009.
Meanwhile, Symantec’s survey respondents still see budget constraints in 2010, particularly when it comes to operational costs like staffing. “Half of all enterprises are somewhat/extremely understaffed,” Symantec’s report reads. “Networking, virtualization and security [are] the most understaffed. [The] biggest issues [are] Budget and finding qualified applicants. 76% have the same or more open job requisitions this year.”
Unified or smart computing — another word for efficiency?
Forrester’s report identifies a set of concepts it calls Smart Computing as leading the next wave of tech innovation this year, described as “leading-edge technologies like service-oriented architecture (SOA), server and storage virtualization, videoconferencing, unified communications platforms, business intelligence and analytics, and new process apps built on digital business application principles.” Like ESG, Forrester forecasts a return to business priorities as opposed to simpler cost-cutting justifications for purchases:
As 2010 progresses and the memories of the 2009 downturn fade, CIOs will start to pay attention to the ways that a new generation of technology can help achieve better business results. In this period of tech innovation and growth around Smart Computing, reference clients and ”low totalcost- of-ownership” marketing become less important than media coverage and buzz in the blogosphere about how your solutions have helped companies achieve breakthrough business results. Companies will want technologies that put them ahead of competitors, not technologies that are the same as what competitors are using.
ESG uses the term “unified computing” to describe the server / software / storage IT stacks offered by larger vendors last year. According to McKnight’s email,
one of the only areas in our 2010 survey where the midmarket shows increased interest compared to enterprises (to tie this question to the one above) is in the area of unified computing – 17% of midmarket respondent put unified computing (i.e., integrated server/storage/networking stack) in their top 10 list of 2010 IT priorities compared to 11% of enterprises. Again, there’s a fair bit of conventional wisdom out there that says that these new unified computing platforms will be most attractive to large enterprises and service providers, but this data actually corroborates discussions ESG has had with a number of end-users, most of whom have indicated that they view the real niche for unified computing as being smaller organizations or smaller locations (i.e. ROBOs) of big firms.
Disaster Recovery–IT’s New Year’s Resolution
The social networking apps I use to communicate with friends have been full of complaints this month from regular gym-goers about the “New Year’s Resolution” crowd they expect to vanish by February. I’m reminded of that kind of recurring but short-lived New Year’s resolution when, every year at about this time for at least the last three years, the discussion has turned to disaster recovery.
Eighty percent of respondents to Symantec’s data center survey said they were confident in their DR plan, but as with Symantec’s SMB survey last September, that confidence isn’t necessarily supported by facts. The data center survey found that one-third of respondents do not have a documented DR plan, that DR plan hasn’t been re-evaluated in the last 12 months, and a significant proportion don’t address cloud computing (41%), remote offices (28%) or virtual servers (23%).
So why this perennial focus on disaster recovery seemingly without significant improvement or change in practice? “The inference we’re making is that it has to do with staffing problems,” Symantec’s Lodge said. “It increases expectations on the vendor side to help with [automating DR].”
“Most organizations don’t have a formal DR plan that’s regularly tested,” ESG’s McKnight adds. “There’s a difference between DR as a business priority as opposed to how it translates into specific formal processes and technologies. Having a plan and testing and improving on that plan are different questions.”
Emulex offered the first hard evidence that storage spending picked up at the end of 2009, a year in which storage spending overall dropped significantly. And its HBA rival QLogic served up the second piece of evidence.
Emulex Monday evening said revenue from the fourth quarter would be around $107 million to $108 million, way above its previous forecast of $88 million to $92 million. The new forecast is slightly below Emulex’s fourth-quarter 2008 revenue of $109 million and up about 26% from the third quarter of 2009. Emulex said its HBA business grew about 28% from the previous quarter and its embedded switches revenue increased more than 20 percent.
Because Emulex HBAs and switches are sold inside storage systems from large vendors – its biggest OEM customers are IBM, Hewlett-Packard and EMC – its better-than-expected sales are seen as a sign of an industry-wide uptick.
“It seems customers flushed whatever little budgets they had for 2009,” Wedbush Securities analyst Kaushik Roy wrote today in a note to clients. “Emulex revenues are highly correlated to spending on storage systems and storage area networks, and our checks lead us to believe that the strength was fairly even across server and storage systems vendors.”
Today, QLogic said it too exceeded its previous forecast last quarter. QLogic’s updated guidance of revenue in the range of $147 million to $149 million represents a 12% to 13% surge from the previous quarter, and is above its earlier forecast of $134 million to $140 million.
Even before the HBA vendors updated their forecasts, Wall Street analysts were predicting a thaw in storage budgets.
A note issued by RBC Capital Markets analyst Amit Daryanani last week forecasted a storage spending increase of around 7 percent or 8 percent this year – higher than overall IT spending – following an 8 percent drop in 2009.
“Given most organizations deferred much of the storage spend last year, we expect a relatively stronger 2010,” Daryanani wrote. “We expect IT storage spending to continue to shift toward networked storage at the expense of direct-attached storage. In addition, we believe network attached storage (NAS) will continue to grow at a faster clip than storage area network (SAN), given the relatively bigger surge in unstructured data creation.”
Dot Hill Systems has ambitious plans for software it will acquire from Cloverleaf Communications for $12 million.
Dot Hill executives discussed those plans during a conference call Thursday night. The short answer to what Dot Hill expects to do with Cloverleaf’s Intelligent Storage Network (iSN) is: Everything. Which is a stark difference from what Cloverleaf did with the software, which was next to nothing as far as sales go.
Dot Hill execs say iSN is capable of delivering heterogeneous storage virtualization, unified SAN/NAS storage, thin provisioning, synchronous/asynchronous replication, snapshots, CDP, automated storage tiering, and migration of data from any array to any array. Except for data deduplication, Dot Hill hails iSN as a solution for just about any data protection and management needs.
“This allows us to compete pretty well with just about anything in the industry,” Dot Hill CEO Dana Kammersgard said.
As for specific products, Kammersgard says Dot Hill will have an in-band storage management appliance, a bundled appliance with Dot Hill storage, and a data migration appliance based on iSN lite over the next six months to a year. It plans to follow with a unified storage appliance and standalone software package within one and two years, followed by fully integrated unified modular storage platforms.
Besides making Dot Hill more of a software play, Kammersgard says the acquisition will accelerate the vendor’s plans to enter the channel with appliances. Dot Hill currently sells storage arrays almost exclusively through OEM partners Fujitsu, Hewlett-Packard, NetApp, and Sun.
Dot Hill execs say it would’ve taken three years and cost $30 million to $40 million to develop similar software in-house. Buying Cloverleaf costs $2.5 million in cash and $9.5 million in stock. They expect the deal to close within a few weeks.
Kammersgard says iSN will make Dot Hill more competitive with storage systems vendor Compellent as well as management software vendors FalconStor, DataCore and LSI’s Storeage platform.
But by Dot Hill’s accounting, Cloverleaf was sputtering along with 25 customers and $1 million in revenue in 2009. If iSN is so good, why was it largely ignored in the market? Kammersgard says Cloverleaf devised the software for large enterprises and specialized customers such as the military defense industry, and that narrowed its market. He says Dot Hill will “scale the software down” to make it a better fit for mainstream storage users.
So now we know what Dot Hill will be up to over the coming months: its developers will scale down its new software while marketers scale up expectations.
Storage systems vendor Dot Hill acquired privately held storage virtualization software maker Cloverleaf Communications Inc. this week for $12 million in cash and stock as part of its plan to focus more on the management of its arrays.
Cloverleaf’s Intelligent Storage Network (iSN) products are designed to manage heterogeneous storage environments as well as disaster recovery under one user interface. The transaction will consist of $2.5 million in cash, plus $9.5 million in Dot Hill stock.
According to a Dot Hill press release, Cloverleaf was formed in 2001 out of Elta Systems/Israel Aerospace Industries and was VC funded to the tune of $43 million. Dot Hill CEO Dana Kammersgard said in the release that the move signals a shift for Dot Hill, up to this point primarily a provider of storage hardware systems to OEMs, to intensify its focus on the storage software market.
“This acquisition is in line with our previously stated objectives to transform Dot Hill into a storage software and solutions focused company,” Kammersgard was further quoted as saying in the release. “Cloverleaf’s products accelerate this plan by as much as two years and with the breadth of features they provide, we believe we can compete very well with both the virtualization appliance companies as well as with the newer storage companies who bundle similar features that operate solely on their own array products.”
Dot Hill sells its storage arrays through OEM deals with Fujitsu, Hewlett-Packard, NetApp, Sun, and others, so it probably senses an industry wide shift to add virtualization features to its systems. But you have to wonder how much of an opportunity Cloverleaf management and investors believed existed for their software. They sold out for barely one quarter of the amount invested, and most of what they got is tied into the value of Dot Hill stock.
Dot Hill will hold a conference call Thursday to discuss the acquisition, which is expected to close mid-month.
DataCore kicked off 2010 with updates to its SANSymphony and SANMelody storage virtualization software, adding support for logical volumes up to 1 PB and the Asymmetric Logical Unit Access (ALUA) standard.
The expansion of logical volume support from 2 TB to up to 1 PB is made possible by DataCore’s move to 64-bit support in the latest major release of its storage virtualization software. The 64-bit support lets software address much more storage capacity in a single volume than previous versions.
DataCore director of product marketing Augie Gonzalez said that as with last year’s 1 TB “mega-cache” support, the logical limit is beyond where most customers will be looking to stretch today. But the previous 2 TB limit had grown impractical for making RAID sets out of the latest 1 TB and 2 TB SATA disks.
“The logical volume expansion and thin provisioning allows users to say, ‘I don’t care how big the volume will be in the future’,” Gonzalez said. “Rather than defining LUNs up front and then having to make changes later, you can immediately set up a large volume and expand the storage with no applicvation or infrastructure changes.”
A DataCore service provider customers says adding ALUA support will improve management in his storage environment. Joseph Stedler, director of data center engineering for cloud computing and managed IT service provider OS33, said he uses DataCore’s SANSymphony software to host back-end storage for his SMB customers. Right now SANSymphony is running on IBM System x servers in front of IBM DS3400 arrays and Xiotech Emprise 5000 storage devices, mirroring between redundant sets of the tiered hardware. The logical volume expansion will be especially helpful in cutting down on backup administration overhead, Stedler said.
“With two terabyte volumes, we had to present things in 2 terabyte chunks to our Veeam [backup] server,” he said. “With a larger primary volume we could have fewer backup targets to manage.”
Stedler said the addition of ALUA support will be even more important for creating multipath I/O in OS33’s VMware environment. “ALUA solves a major pain for everybody running DataCore with VMware,” he said. “The way VMware understood it before was active-passive only. DataCore was able to do active-active failover but with VMware you’d have to run multipathing with the most recently used path. The new release is fully compliant with ALUA, so VMware can view it as active-active.”
Stedler said he’s looking forward to the addition of more granular scripting capabilities for the software in future releases.
Computer memory vendor SMART Modular Technologies is joining the solid state drive market with what it calls enterprise-grade multi-level cell (MLC) SSDs to challenge STEC and PCI Express flash to take on Fusion-io.
SMART, a public company based in Newark, CA, today said its enterprise MLCs are available for OEM partners to test. The vendor already has PCI Express NAND cards sampling with OEMs, but no design wins.
SMART’s XceedIOPS SATA is available in 1.8-inch and 2.5-inch form factors and ranging in capacity from 25 GB to 400 GB. SMART uses SandForce’s SF-1500 SSD controller and Micron’s raw Flash chips, according to SMART marketing director Esther Spanjer.
Single-level cell (SLC) XceedIOPS SSDs are also available, but Spanjer says most of the interest from SMART’s prospective OEM partners is for the enterprise MLC drives.
When SSD drives first made their way into enterprise storage last year, MLC devices were considered inadequate because they wear out faster than SLCs. But vendors such as STEC, Fusion-io and now SMART have worked on increasing the reliability of MLCs to make them viable lower-cost alternatives to SLCs for the enterprise.
SSD reliability is measured by program/erase (P/E) cycles, the higher the better. SMART claims its MLCs have program/erase cycles of 20,000, which is about double the industry accepted figures for MLC devices but still about one-fifth of the SLC P/E cycles.
SMART’s press release issued today says the drives are the first enterprise-level MLCs, but that’s not the case. STEC has been sampling its enterprise MLCs since August. Spanjer says SMART will offer its MLCs SSDs at a much lower price than STEC. XceedIOPS costs $400 for a 50GB card and $1,300 for 100 GB (the same price as for a 200 GB SLC device). STEC hasn’t announced pricing for its MLC SSDs, which run up to 800 GB.
SMART is also working on SAS interfaces for SSDs and while Spanjer said she couldn’t divulge too much about future products, she says its unlikely that the vendor will make a Fibre Channel SSD to compete with STEC. “It seems like the Fibre Channel market is phasing out,” she said. “I don’t think anybody in their right mind would come out with a Fibre Channel drive.”
She said SMART is sampling its SSDs with enterprise storage vendors and expects OEMs to start shipping the drives this year. SMART’s PCI Express Flash cards have been sampling since the fourth quarter, and could start shipping with OEMs by mid-year. Spanjer wouldn’t say which OEMs are testing the SSDs, but SMART counts Hewlett-Packard, Cisco, and Dell as its largest DRAM customers.
Enterprise Strategy Group analyst Mark Peters says he’s not familiar with SMART, but knows of the SandForce controller and sees an opening for enterprise MLC because of its cost advantages over SLC. “The SandForce controller that SMT is using has great potential from everything I’ve seen,” Peters wrote in an email to Storage Soup.
Peters sees a layered approach to SSDs developing. “We will have a hierarchy of SSD, much as we do of HDDs today so there’s room for plenty of choices to exist in the market,” he wrote. “SLC is pretty much limited to the high end data processing world, which represents a very small part of the overall solid state memory consumption. Longer term, this could mean SLC might not be manufactured (although for now my industry contacts say there’s enough demand to sustain it), but would almost certainly mean a relatively higher price on the SLC media, compared to the ‘standard’ MLC (or whatever it will be in a few years).”
EMC today became the first storage company to make an acquisition in 2010, although its acquisition of Archer Technologies falls mostly outside the storage space.
EMC will sell Archer’s IT governance software as part of its RSA security division. The vendor did not disclose the acquisition price.
Archer makes a set of software products as well as a framework that ties them all together. The Policy, Risk, Compliance, Enterprise, Incident, Vendor, Threat, Business Continuity, and Audit Management software titles and the Archer SmartSuite Framework are designed to automate corporate compliance policies, analyze risks and demonstrate compliance with regulations.
According to an EMC press release, Archer has more than six million licensed users and a client list that includes 25 of the Fortune 100. The Archer portfolio will be integrated with RSA’s data loss prevention (DLP) and security information and event management (SIEM) products, as well as EMC’s Ionix data center orchestration suite. Archer products also will be sold as software as a service (SaaS), in keeping with EMC/VMware’s various cloud computing initiatives.
Archer brings with it a business continuity software module, which could affect those who manage disaster recovery in the storage environment. It also extends EMC’s move to inject automation into its software offerings, which we’ve seen in the storage market with last month’s first release of FAST, and is a part of EMC’s vision for archiving and e-Discovery.
RSA senior product manager Paul Stamp said in an email to Storage Soup that Archer will also have some relevance within EMC’s Content Management and Archiving platform. “Archer complements what EMC does within the Content Management & Archiving division because it can check [governance, risk and compliance] GRC against internal and external policies, delivering a CIO or CISO a view on compliance with policies,” he wrote. “CM&A does eDiscovery and information governance via solutions such as SourceOne and Kazeon, both of which are complementary to Archer and EMC’s larger GRC strategy.”
According to a court filing uncovered last week by the New York Times, an ex-Seagate employee has delivered significant new testimony in an ongoing patent dispute between his former employer and a firm called Convolve.
The former employee, Paul Galloway, has reportedly signed an affidavit which is summarized and quoted in the court filing, saying Seagate not only stole Convolve’s noise-reduction technology but has destroyed evidence relevant to the ongoing litigation. The suit, first brought by Convolve and the Massachusetts Institute of Technology (MIT), where the disputed technology was invented, is pending in a federal district court in Texas.
The filing says Galloway came forward in late November after having appeared previously as a witness for Seagate in the lawsuit. Now no longer employed by Seagate, Galloway says he and other engineers in Seagate’s servo group were given information about Convolve’s technology without being told it was supposed to be under NDA. Galloway further alleged Seagate had destroyed or hid a laptop containing his relevant work on the technology, “corrupted” source code blueprints it produced to prove Convolve’s technology hadn’t been stolen, and claimed minutes from a meeting where the Convolve technology was disseminated among Seagate engineers have gone missing.
This most recent testimony was filed in a federal district court in Manhattan, according to the Times. A conference is scheduled for the trial later this month, but it’s unclear whether Galloway’s testimony will be discussed at that meeting.
Clustered NAS vendor Exanet has received a lifeline of cash intended to keep it alive long enough to get acquired, according to Israeli business newspaper Globes.
Globes reports Exanet’s shareholders put up $450,000 to cover operating expenses for around two months for the Israeli-based vendor. The investors’ move came 10 days after Exanet told its 62 employees it would close down, and the employees asked the Tel Aviv District Court to appoint a temporary liquidator because they said the company owes them $1 million. The court then ordered investors to invest the extra funds.
According to Globes, Exanet will continue with 35 employees and six support staff while investors seek a buyer. One candidate to buy the company is Dell, which Globes said discussed investing in Exanet as part of a development deal over the past year. Dell sells EMC’s Celerra NAS and has its own line of Windows-based NAS but does not have a clustered NAS product.
Struggling tape vendor Overland Storage is battling to keep its listing on the Nasdaq Stock Market despite missing its Dec. 14 deadline to get its minimum value of shares above $15 million.
Overland last Friday night requested an appeal before a Nasdaq Hearings Panel, automatically delaying the delisting of its common stock until the panel makes a ruling. The hearings panel can grant Overland an additional 180 days to regain compliance.
According to a press release issued by Overland Monday night, “Any delisting of [Overland’s] common stock by Nasdaq could adversely affect [Overland’s] ability to attract new investors, decrease the liquidity of the outstanding shares of common stock, reduce its flexibility to raise additional capital, reduce the price at which such shares trade and increase the transaction costs inherent in trading such shares with overall negative effects for [Overland’s] shareholders.”
In other words, it would likely force Overland to go under or go private. Overland executives have already made it clear the company will need extra financing to survive. The company’s tape business has been losing money for years, and it’s recent move into disk-based backup and Snap NAS servers hasn’t been able to save it. Overland has cut staff over the past few years, and last year named former Snap chief Eric Kelly its CEO.
Overland lost $3.7 million on income of $19.3 million last quarter. Over the last four quarters, it lost $14.9 million on $93 million in revenue.
Overland’s stock is trading at $1.95 a share following a recent one-for-three reverse split but the total value remains about $2 million below the $15 million threshold.