In an economic downturn, not everybody makes it through in one piece. Though the storage market has fared better than many (apparently the list of things in life you can count on has been expanded to three: death, taxes and data growth), it isn’t without its casualties. Ciprico and Agami are the two latest.
The Minneapolis-Star Tribune reports that storage controller startup Ciprico has filed for Chapter 11 bankruptcy. According to an analyst quoted in the Star-Tribune story, “Ciprico spent too much cash last year building a sales force to sell a radical new disk storage product that consisted only of software rather than a computer device…Ciprico had the funds and burned them up too quickly.”
Ciprico reported a loss of $3 million on $2 million in revenue for the first quarter of this year, then laid off 30 percent of its staff in March. Ciprico CEO Steven Merrifield told the Star-Tribune he hopes to sell off the company’s technology
Poor judgment in the spending department may have been a factor, but Storagezilla also attributes the downfall of smaller companies to the general economic climate. “During a downturn the bigger players get bigger while the smaller ones collapse or are picked off via acquisition,” he wrote – in the midst of reporting that NAS vendor Agami has folded.
I since received confirmation from an Agami source that it has indeed gone out of business, although its web site and phone system are still functioning. In today’s economic climate, it wouldn’t be surprising if more “on the bubble” storage companies bite the dust.
The turnover that often occurs when a large company buys a smaller one has begun at Dell/EqualLogic, about seven months after Dell closed its $1.4 billion acquistion of the iSCSI SAN vendor. The most visible of these departures was delivered via vlog by Inside IT blogger and Dell/EQL evangelist Marc Farley, who gave his reason for leaving as “I’m not much of a big-company guy. I don’t know if I’m allergic to them, or what.” Farley said he’d be going to work for a smaller storage vendor, but didn’t specify which.
This is similar to what I heard recently from Roman Kichorowsky, former director of PR for EqualLogic, whose name is on a Dell press release as recently as July 10 but who has now moved on to FalconStor.
It’s not unusual for employees to leave in these kind of acquisitions. There are real cultural differences with almost every merger, and you’ll always find people who smile big until the press coverage dies down, wait for options to vest, and then get out.
But Dell’s retention of EqualLogic’s service and support staff as well as channel partners were major concerns for EqualLogic customers after the acquisition. The departure of PR and marketing people almost surely won’t affect the customers. But it’s worth keeping an eye on who else chooses to exit.
Atempo has been busy lately working its archiving story. Over the last six weeks, the backup software vendor has released an email archiving application and forged partnerships with Nexsan, Nirvana and – as of today – Permabit.
Atempo and Permabit say they’ve completed interoperability testing of the Atempo Digital Archive (ADA) file archiving software solution with the Permabit Enterprise Archive disk-based storage system.
While such partnerships have become common for smaller storage vendors looking to take on larger players, a partner has to bring something to the table to make it worthwhile. For Permabit, Atempo adds support for user-initiated (along with admin-initiated) archiving and the ability to archive Mac and Windows files in the same repository.
“Now shops can have admins set policies as well as user-set retention rules, and they don’t have to step all over each other,” Permabit director of product marketing Louis Imershein said.
Imershein said while Permabit’s customers tend to be enterprises, most of them have Macs somewhere — usually in the art or graphics departments. He said ADA makes it easier to manage archives regardless of what type of applications are used. “It’s a nice way to re-direct users to the archive without having to go through a filter drive, they can make a direct hop,” he said. “In enterprises, you wonder how people can do without that.”
Analyst George Crump of Storage Switzerland agrees that Mac support is becoming important in large companies. “I’m seeing an uptick in use of Macintoshes, even in the enterprise,” he said. Crump is also seeing a need for simpler interfaces such as ADA’s in archiving. “Many applications are too heavy — for lack of a better word — and they bring more to the table than needed,” he said. “Disk-based archiving simplifies archiving compared to tape and optical archiving. But there wasn’t a simpler app to take advantage of the simpler interface.”
But with no shortage of archiving products in the market now, getting people to take a look at their simple products will be the hard part for little guys like Atempo and Permabit.
Last week I noted that EDS shareholders had filed suit to delay the closing of HP’s acquisition of the IT services company. The Wall Street Journal has since reported that HP and EDS will settle with those shareholders. As part of the settlement agreement, HP and EDS will delay the merger until Aug. 18. That allows investors to reap an additional 5 cent-per-share dividend. The companies have also agreed to turn over more information about the structure of the deal requested by shareholders.
Last week, we saw a good bit of rain falling on cloud storage’s parade. First there was another Amazon outage. Then it came to light that a cloud storage site called The Linkup (nee MediaMax) has completely failed, because of an apparent problem with data migration. At least that’s what it sounds like from their blog post about going out of business:
It was not possible to satisfactorily complete the move of files from MediaMax to The Linkup as we had expected, and as a result cannot offer a service that meets your expectations and our business requirements. This is a very disappointing outcome for us, and we know it has been a frustrating experience for many of our customers.
Maybe the owners of The Linkup could bounce back by taking Xdrive off AOL’s hands for the bargain price of $5 million and starting over.
Generally, I reserve judgment on the ultimate fate of cloud storage services. I know that online storage had a brief period of interest during the tech bubble but never went anywhere, and some believe this is more of the same. But I can be convinced, for now, that this time might be different. Small outfits such as The Linkup get trampled during the gold rush toward any new technology, and perhaps established service providers such as Amazon are going through growing pains. It’s still too early for these events to be anything other than a possible warning sign.
But things have sure looked ugly lately.
Want to avoid having to archive your emails? All you have to do is get elected President. Or, at least, be President Bush.
The overseer of unprecedented government snooping tactics on private citizens has taken umbrage at the suggestion that his email correspondence be similarly vulnerable to prying eyes, saying he’ll veto a bill passed by the House July 8 that would revise the Presidential Records Act and the Federal Records Act to address Presidential email records–specifically, the archiving and preservation thereof.
This all started last year, when a watchdog group claimed that members of the Republican National Committee used their RNC email addresses, which are supposed to be for campaign matters only, to conduct other business with the White House. When asked to turn over those emails, the Bush administration said, ““Oops.” Oh, and coincidentally, emails relating to the infamous Scooter Libby/Valerie Plame affair are also among the missing, according to CNN.com.
Now, what do you think would happen if the CEO of even the most powerful corporation attempted to respond that way to an e-discovery request?
That said, I don’t expect this legislation to pass anyway, if the track record of data privacy legislation is any indication.
That’s the question I’ve heard asked in the wake of Brocade’s blockbuster $3 billion acquisition of Foundry this week. Some have suggested that Juniper Networks, which is much more competitive with Cisco in the Internet router market, might have been a better choice.
To get a better sense of where these Ethernet players stand in the market, I talked to some analysts at the Dell’Oro Group, which specializes in tracking the networking market. According to Ethernet analyst Alan Weckel, Juniper has 16% of the total router market, while Foundry has 1% (this as compared to Cisco’s share, at 65%). Foundry is also #3, according to Dell’Oro, in the service provider and total Ethernet switching market, behind Force10 Networks and ProCurve Networking, respectively.
However, Weckel pointed out, Juniper doesn’t register yet in enterprise Ethernet switches, having only announced enterprise products earlier this year; its enterprise-class Ethernet switches aren’t shipping yet. “In routing, Juniper’s a clear number two,” he said. “But on the Ethernet switching side, it’s very early to say.”
Marty Lans, senior director of Brocade’s data center infrastructure group, said that Ethernet is the meat of the product strategy behind the acquisition. “We’re looking to sell from the heart of the data center out,” he said. FCoE and 10 GbE are already areas where Brocade has some products, including FCoE equipment that Lans said will ship when the FCoE is ratified, probably later this year.
“Those are within the four walls of the data center,” he said. “This is an extension to our product line meant to go beyond the data center.””
Moreover, Forrester analyst (and, full disclosure, my former news director) Jo Maitland blogged yesterday that
Foundry has all but conceded the enterprise market and has been selling its switches to metro providers building Ethernet MANs. . . .Right now, enterprise networking teams will not buy Brocade (or Foundry) for Ethernet. Period. It’s too risky and operationally foreign. But it’s possible a more robust service provider could do it if there was a competitive angle.
So. Acquire a company that has already shipped product and failed to gain share, or acquire a company with better share in one aspect with a product that could go either way? “It’s a question mark,” said Weckel.
Another clue to the origins of this deal might lie in a name mentioned on Brocade’s conference call: Seth Neiman of Crosspoint Venture Partners. He provided the seed money to found both companies, and just may have had a hand in making the deal happen, according to Maitland.
The news today was about a huge storage networking acquisition by Brocade, but another mammoth merger we covered here earlier is reportedly hitting a snag. The AP reports that some EDS shareholders are trying to pressure EDS into asking HP for more than the $13 billion it’s already been offered. Part of this pressure, according to the AP, is a plan to ask a judge in Collin County, Texas to postpone the company’s annual shareholder meeting. HP declined comment today.
While EDS is a huge player in the IT services industry and the acquisition obviously has tremendous value for HP, these shareholders would do well to reference the recent parable of Carl Icahn and MicroHoo.
The biggest difference between the last time S3 crashed and this time, in my observation, is that there was a much, much bigger chain reaction this time around. Last time, I knew of only a few companies using S3, like photo hosting site SmugMug, and startups that offer online backup services using their own interfaces on the front-end and Amazon’s hardware infrastructure on the back-end.
This time, not only were those types of Web 2.0 companies affected, but much bigger fish also felt the sting: no less than Web 2.0 microblogging phenom Twitter and some iPhone applications crashed along with S3.
The last Amazon outage was attributed to “growing pains” as the service gained popularity. I’d imagine adding popular apps like Twitter and the iPhone constituted another wave of painful growth. This is a new medium, and users of very new storage media accept some level of risk. But two major outages in six months is obviously raising some questions.
“Skype has crashed and stopped responding, Twitter, Tumblr and other major websites are barely working, most aren’t displaying images, widgets or static material that was outsourced to Amazon S3 services,” reported blogger LinkFog as the outage occurred. “It’s kinda funny how this goes against the very nature of the web, in each networks are interconnected in several ways to ensure that a major breakdown won’t happen.”
Others, like a blogger at Web Worker Daily, were not happy with Amazon’s SLAs:
Amazon does offer an SLA for the S3 service, guaranteeing 99.9% uptime or part of your money back. With .1% of a month being around 45 minutes, that means they owe people money. The requirements for claiming a refund, though, are onerous enough that no one except large users will bother (hey, Amazon, how about an automatic refund when you know your servers are down?).
Recent reports suggest that this is actually what will happen.
Clearly it’s not a major disaster for people not to be able to Twitter for a few hours. But when it comes to things like the backup services attached to S3, it might be time for people to rethink whether one cloud back-end is the same as another. Amazon’s appeal is that it’s cheap and relatively unrestricted for Web developers–but I hope the backup companies basing their hardware infrastructure on S3 at least inform their end users what the back end is, so they can make an informed decision about service provider reliability.
In the course of observing the festivities on NetApp and EMC blogs, I came across a sneaky little blog post/announcement from EMC about its LifeLine consumer storage product. According to The Storage Anarchist (aka Barry Burke), his post will be the only official announcement from EMC about LifeLine 1.1.
I’ve given up on trying to understand software release-numbering, btw. Sometimes it’s a “dot-oh” release for new OS support. Other times it’s a “dot one” for, say, Linux, Mac and NFS support, Active Directory integration, RAID 0, an embedded search engine, and oh, yeah, drive spin-down in a consumer NAS box.
But from Burke’s perspective as a
guinea pig user of the product, maybe this release isn’t so significant. At the very least, it hasn’t checked off all the items on his wish list, including integration with Mozy similar to what was announced for Iomega hard drives last week, better TiVo integration and dedupe.