Storage Soup


November 8, 2012  12:32 PM

FalconStor hires banker to explore sale or funding options

Dave Raffo Dave Raffo Profile: Dave Raffo

After another rocky quarter, FalconStor has hired investment banker Wells Fargo Securities to evaluate “strategic alternatives.”

FalconStor CEO Jim McNiel stopped short of saying the data protection vendor is for sale but said he is considering all options. He said FalconStor cannot fund all the projects on its development roadmap without a cash injection.

When asked during FalconStor’s earnings call Wednesday if he would consider selling off patent licenses or other intellectual property, McNiel said, “the main purpose behind retaining Wells Fargo is to explore all strategic alternatives. We have a sizable R&D pipeline and a number of key products we would like to invest in. We are developing [disaster recovery and next-generation deduplication and backup storage repository products], and those initiatives are being funded from operations. There are other projects we would love to fund, but we can’t do it from operations.”

McNiel predicted that the new data protection products in development would bring FalconStor revenue to double-digit growth, and he said he expects the company to be cash flow positive this quarter after cost-cutting moves including layoffs. But FalconStor’s $17.1 million revenue last quarter was down from %18.9 million last year for a 9% drop. FalconStor lost $3.6 million last quarter. That’s not as bad as the $5.4 million lost in the same quarter of 2011, but leaves the vendor with $25.8 million in cash and assets.

FalconStor is counting on $10 million in annual savings from its recent reorganization, but McNiel said it is difficult to close sales because of soft IT spending and heavy discounting by competitors.

“We weren’t terrifically happy with the results,” McNiel said on the earnings call.

He continued to paint a rosy product picture for the future, however, saying FalconStor’s near-term product roadmap represents a “new day of innovation.”

Rivals like to remind potential customers of FalconStor’s rough recent history, including a $5.8 million payment to the U.S. Securities and Exchange Commission (SEC) to settle criminal and civil charges that the vendor bribed a customer. Those charges prompted founder ReiJane Huai to resign as CEO in September 2010, and he committed suicide a year later.

While McNiel said the goal of any transaction would be to increase shareholder value, several FalconStor channel partners said they welcome a sale of the company when McNiel replaced Huai in 2010.

October 30, 2012  7:29 PM

Scale Computing wary of EMC’s ‘VMware trap’

Dave Raffo Dave Raffo Profile: Dave Raffo

Scale Computing will use the $12 million funding round it recently closed to market its HC3 “hyper-converged” platform that combines storage, virtualization and networking. That marketing job includes explaining why the startup chose to use Red Hat’s KVM as the embedded hypervisor instead of VMware.

The funding release that went out last week claims that Scale has close to 100 HC3 deployments in the first four weeks of its launch and it accounted for half of the startup’s sales in the third quarter. Scale still sells storage-only systems but is clearly shifting its focus to its converged box.

“HC3 is now the foundational product for the company,” said Pat Conte, Scale’s general manager of worldwide field operations.

While much of the funding round will be spent on marketing, Conte said there are product enhancements on the short-term roadmap. One new feature will be the ability to migrate virtual machines from the user interface. Others include “more complex networking, and things that will enhance the UI but not change functionality.”

One thing Scale will not change in the near-term is its decision to use the KVM hypervisor instead of VMware inside the HC3. Conte said Scale supports VMware for customers who want to use HC3 as a SAN connected to external servers. But the servers inside HC3 are built on KVM along with Scale’s clustered file system.

Conte said Scale chose KVM over VMware because it is cheaper to license and “KVM is the fastest hypervisor we found.”

That’s the technical reason for snubbing VMware. There is also a strategic one, which Scale CEO Jeff Ready laid out in a recent e-mail exchange with me. Pointing to Hitachi Data Systems’ new Unified Compute Platform (UCP) converged stack, which is managed through VMware vCenter, Ready charged that HDS is the latest vendor to fall into EMC’s VMware trap. He added that having an integrated hypervisor is a crucial part of a converged stack, but EMC rivals should avoid using VMware because EMC is the majority owner of VMware. He expects EMC to integrate VMware into its hardware and work more closely with VMware than other storage vendors can.

”When products move to fully integrated hypervisors, it is EMC who sits in the driver’s seat with their relationship with Vmware,”Ready wrote. “And all hardware vendors who are driving customers to a semi-converged solution requiring VMware are falling into the trap EMC has set for them.”

Ready claims Scale avoids the EMC trap by using KVM, “eliminating VMware licensing costs entirely, and offering an elegant, powerful solution that steers customers clear of this EMC trap.” He also maintains the days of VMware’s vendor neutrality are over.

“To me, VMware, as we’ve known it, is dead,” ”Ready added. “The hypervisor itself, as a differentiator, is dead. What matters are the applications, the management tools, and the automation. Selling those types of tools — often at very high licensing costs — is the world of EMC. VMware is EMC. What we are offering is an alternative solution to this, one that leverages the current hyper-convergence trends – and builds its tools, licensing and integration into a package built specifically for the midmarket.”

Of course, basing your survival on the death of VMware is either lunacy or genius. That makes Scale worth watching either way.


October 30, 2012  2:24 PM

Nasuni pulls in $20 milliion in a Series C funding

Sonia Lelii Sonia Lelii Profile: Sonia Lelii

Storage cloud provider Nasuni Corp. today announced it has secured $20 million in a Series C round from a new  anonymous invester. In total, the company has raised $43 million since its founding in 2009, which includes the $8 million it raised in a Series A round and another $15 million it raised in a Series B funding round.

Andres Rodriguez, CEO and co-founder, said most of the new money will be used for to expand sales and marketing.  “We have to be in more places with more prospects,” he said.

The Natick, MA.-based Nasuni has 45 employees and expects to double its headcount in the next year. “We ended closing the round sooner than expected because we got so much interest that we decided to take it.  I had  intended to close the round at the end of the year, ” said Rodriguez.

Nasuni’s strategy is to target the storage-as-a-service market. It’s cloud product is a controller that is placed on a customer’s site and works as a translator so data can be stored in the Amazon S3 or Microsoft Azure cloud. The controller is available on a hardware appliance or as a software virtual appliance that customers can install on any hardware. The company targets primary storage along with built-in backup and replication.

Some of Nasuni’s more recent product announcements include adding a block interface to it cloud storage controller, which had supported NFS and CIFS, so it can deliver unified storage for enterprises’ remote and branch offices. The company also recently announced it is delivering offerings for mobile access to cloud-based storage to help organizations keep up with demand from employees to view, share and collaborate on files from any mobile device or location.,

Besides the anonymous invester, previous investors Fybride Capital Partners of Boston, North Bridge Venture Partners of Waltham and Sigma Partners of Boston took part in this Series C financing.


October 29, 2012  7:35 AM

Per-TB licensing changes behavior, impacts efficiency

Randy Kerns Randy Kerns Profile: Randy Kerns

Once again I’ve run into an information technology director faced with acquiring software for storage that was licensed on a per-terabyte basis. Like others I’ve talked to in that situation, he made his decision based on that charge and not by taking into full consideration what he needed. The cos-per-terabyte charge can be so large that it has an impact on efficient storage operations.

The cost-per-terabyte charge applied in storage varies depending on the product and the vendor. Vendors are not even consistent from product to product on the charges. A few of the different ways they are represented to their customers illustrate this frustrating point:

Per terabyte of managed capacity is a common charge for storage management software. Unfortunately, vendors definite managed capacity differently.

  • Terabytes presented to the host is another measure that requires reading the fine print to understand. It usually means the capacity that that the operating system can see from the storage system. That method of measuring does not reduce the license cost for data reduced with deduplication or compression by the storage system.
  • “Terabytes used” is a broad brush charge specific to the application. It usually means the amount of actual data being stored.
  • Total capacity is the amount of raw terabytes of the storage system, regardless of the efficiency of utilization.
  • Replicated terabytes is a common measure for remote replication software that charges by the amount of data moved to the replicated storage system. Usually this is raw terabytes, and is charged if the data is compressed or not.

Charging by the terabyte often causes unnatural behavior by IT. There can be big efforts to move data around to isolate it from the per terabyte charge of software. Another behavioral change is that IT makes a decision to not use the best management software based on evaluations but go with one that has a more favorable (in their terminology, “a less ridiculous”) pricing model. These actions mean that the best features of the storage software are not used, and the best product does not always win out.

Vendors have reasons for charging by the terabyte. It produces a continuing revenue stream for them, and they argue that customers continue to get value from their product so they should continue to pay. They usually add a maintenance charge to pay for support and updated versions.

There is a stark contrast in the way the storage system is priced compared to the software. The storage system is purchased with a single price in most cases, and there is a warranty period for several years. The charge per terabyte software licensing appears to be gold mine compared to the payback from the storage hardware.

Maybe the charge per terabyte is not really equitable for customers, and their dislike of the practice (much stronger terminology would be appropriate) is justified.  It certainly gives validation to the open source movement.

Licensing charges do affect product and management decisions, and lead to less than optimal solutions. They also lead to a product not being as pervasive (number of accounts using) as would be expected from the product’s value. Making the customers change their behavior because of the pricing model is an example of vendors not listening to the customers and inviting competition.

(Randy Kerns is Senior Strategist at Evaluator Group, an IT analyst firm).


October 25, 2012  6:52 PM

Apple, Facebook still love Fusion-io

Dave Raffo Dave Raffo Profile: Dave Raffo

Fusion-io CEO David Flynn said the server flash vendor is selling into more enterprises who want to speed database performance. But the bulk of its business continues to come from standbys Apple and Facebook.

Fusion-io reported $118.1 million in revenue last quarter, up 59% year-over-year and up 11% from the previous quarter. The company had net income of $14.9 million, up 52% from the previous quarter.

And it had Facebook and Apple largely to thank for its success. They have been Fusion-io’s largest customers almost from the start, and last quarter combined for 56% percent of its revenue. One of the two – Fusion-io didn’t disclose which one – placed an unexpected $10 million order that put Fusion-io over its forecast for the quarter. Another 14% percent of the revenue came from sales through Hewlett-Packard, which sells Fusion-io cards in its servers.

Flynn said traditional enterprises are using Fusion-io products, particular its ION Data Accelerator software, to improve database performance and virtual desktop infrastructure (VDI) is also becoming a key application for flash.

Flynn said Fusion-io’s recently announced partnerships with NetApp and Cisco will not produce substantial sales until early next year. He also said Fusion-io is a better partner than Violin Memory, whose reseller deal with HP for its all-flash arrays is under fire.

“Our products and go-to-market strategy are designed to complement our partners’ existing storage and server businesses,” Flynn said. “But contrast, the proprietary flash appliances offered by Violin Memory are not designed to complement but instead to attempt to replace.

“The Violin relationship with HP has been strained for a long time. [Violin] hadn’t really made a good partner because its prodcuts are more in confliction with HP’s.”

 


October 25, 2012  12:34 PM

Quantum spins up disk sales as tape withers

Dave Raffo Dave Raffo Profile: Dave Raffo

Quantum might have turned the corner with its disk backup and storage software products last quarter, just as its tape sales took a big dip.

Quantum reported $42.4 million in revenue from disk and software last quarter, topping the $40 million it needs to break even on those products for the first time. Disk and software revenue grew 18% year-over-year, and CEO Jon Gacek said it could hit $50 million this quarter.

However, a steep decline in tape sales caused Quantum to lose $4.9 million on its $147.3 million in overall revenue. Gacek blamed the tape sales drop on customers waiting for the transition from the LTO-5 to LTO-6 format. Quantum’s overall revenue fell 3% from last year, mainly because of a $13.6 million drop in OEM tape automation sales.

Quantum’s disk and software category consists of its DXi disk deduplication target appliances, vmPro virtual machine backup and StorNext archiving for large files. Revenue from those products increased 18% year-over-year and 38% from the previous quarter. Gacek said the DXi8500 enterprise platform increased 30% year-over-year and 129% sequentially, the midrange DXi6700 slipped 6% and the entery-level DXi4000 was up slightly.

Gacek also said the DXi win rate was 55% against the competition, which in almost every case is EMC Data Domain. He said the win rate was even higher for the DXi8500 despite EMC’s attempts to throw its weight around.

“EMC is not trying to compete based on products,” Gacek said. “They’re trying to play the big-company gain of saying ‘We’re the market share leader, we’re so much bigger than [Quantum], look at [Quantum’s] market share, they don’t even make money.’ Sometimes that works, but sometimes it backfires with customers looking to make a technology buy.”

Quantum added 120 new DXi customers and 65 StorNext customers in the quarter. It sold the first of what Gacek called a “wide area storage” product combining OEM object-storage technology from Amplidata with StorNext.

“That’s not even generally available yet, but one customer was super excited and took a pre-GA system,” said Gacek, adding the customer was a government agency.

Quantum forecasted an uptick to $160 million in revenue this quarter. Gacek said besides a possible tape rebound, he’s looking forward to continue increases in disk and software and early sales in Quantum’s fledgling Q-Cloud backup and disaster recovery offerings.

“If we’re going to be a specialist in backup, we have to give the customer different than the competition,” he said. “EMC doesn’t offer anything like [Q-Cloud}, and I don’t think they will. I don’t thik the revenue piece is as important as our ability to engage with the customer in a provocative way. “


October 23, 2012  2:30 PM

Seagate updates Savvio, Constellation hard drives

Sonia Lelii Sonia Lelii Profile: Sonia Lelii

Seagate Technology has refreshed three of its enterprise hard disk drives, the Savvio 10K.6 for enterprise-level performance, the Constellation ES.3 for bulk data storage and Constellation CS for replicated bulk storage in the cloud.

The company has split its Constellation 3.5-inch family of hard drives into capacity-optimized devices and cost-optimized hard disk drives. Seagate’s Constellation ES.3 drives, also called the Seagate Enterprise Capacity 3.5 HDD, are high-capacity drives for bulk data center applications. The ES.3 enterprise drives have an increased capacity of 4 TB in a 3.5-inch form factor for tier two storage.

The ES.3 HDDs run at 7200 RPMs and they are optimized for replicated storage in cloud systems, cloud storage servers, cloud storage arrays and cloud backup storage. They are available in 500 GB, 1 TB, 2 TB, 3 TB and 4 TB capacities and targeted for high-workload, multi-drive data centers with SAN, NAS and direct-attached storage arrays. The devices come with 64 MB or 1 28MB cache and feature 6 Gb per second SAS or SATA interfaces, while sustaining 1.4 million hours MTBF compared to the previous 1.2 million.

“The 7200 drives store lots of data that is not immediately available. It’s more of a workhorse of the storage system,” said Barbara Craig, Seagate’s senior product marketing manager.

Seagate’s low-powered, entry-level Constellation CS drives, also called the Seagate Enterprise Value HDD, are designed for high capacity, bulk storage needs specifically for cloud service providers who build replicated environments that handle replicated cloud storage, cloud storage servers, cloud storage arrays, cloud backup storage in DAS and NAS systems. The devices, which have an instant secure erase option, come in 1 TB, 2 TB and 3 TB capacities with 6 Gbps SAS interface. The 7200 RPM drives can handle 0.8 million MTBF.

Seagate’s third new drive is the Savvio 10K, 2.5-inch drive, also called the Seagate Enterprise Performance 10k hard drive. It comes in a smaller form factor and it has a faster performance compared to the previous Savvio 10K.5 version. The new 10.6K drives come in a 2.5 inch form factor and are available in 300 GB, 450 GB, 600 GB and 900 GB capacities. The drives are designed with 6 Gbps SAS or 4 Gbps Fibre Channel interfaces, and the 900 GB capacity drive has a self-encryption Drive (SED) feature. The Savvio 10K.6 also has a sustained data rate of 204 MB per second.

“It has up to 50 percent more capacity and it’s in a smaller form factor,” said Craig. “It is 21 percent faster to the prior generation and it is equal to a 3.5 inch, 15K-RPM sequential performance. We also added a RAID rebuild feature. We do more of a copy function. The good data is copied to reduce the time to rebuild by 80 percent.”


October 23, 2012  7:16 AM

HP no longer plays duet with Violin

Dave Raffo Dave Raffo Profile: Dave Raffo

While preparing to go public, solid-state array vendor Violin Memory’s relationship with Hewlett-Packard (HP) is cooling.

Violin was the subject of two Bloomberg stories last week. Last Wednesday, Bloomberg reported that Violin had quietly filed its initial public offering (IPO) to become a public company. No surprise there. Violin is heavily funded with more than $150 million, and CEO Don Basile has talked of going public for months. Bloomberg followed that on Friday by reporting that HP is ending a reseller deal with Violin that has been in place for Violin Memory Arrays (VMAs) since 2010. HP indicated it doesn’t need Violin because its sells all-flash models of its flagship 3PAR storage array.

Losing the HP stream of revenue could damage Violin’s IPO plans. Violin has not commented on the IPO filing but a Violin spokeswoman released a statement about “rumors and speculation floating around” concerning the HP deal.

According to Violin:

“The current HP Violin relationship remains unchanged. The VMA product family (the Violin 3000 and vSHARE software) continue to be available to customers via HP as per the announced relationship. HP engineering continues to certify the VMA with additional servers, operating systems and joint selling and promotions. POC (proof of concepts) are currently active as are additional HP certifications.

“HP has stated 3PAR is the long term strategic direction for their company. Violin offers other products like the Violin 6000 through both our direct sales and our global reseller network as well as other software and system vendors which have been announced over the past 12 months.”

HP’s response was not exactly warm and friendly towards Violin. An HP spokesman answered Violin’s claim by saying “HP 3PAR is our strategic platform for solid-state storage.” That was the same statement that appeared in the Bloomberg story Friday. If HP wanted to back track, its response would have been more elaborate.

Another source familiar with HP’s strategy said the original reseller deal is still in place but HP will not extend it. It will, however, honor the deal if customers want to buy a Violin array from HP.

Reading between the lines tells me HP will strongly pitch a 3PAR solid-state array before selling anything from Violin. The reseller deal remains in place, but a reseller deal on paper means nothing if the company that is supposed to do the reselling ignores it.


October 19, 2012  4:00 PM

SNW notebook: Fujitsu, Avere strike up a match

Dave Raffo Dave Raffo Profile: Dave Raffo

SANTA CLARA, Calif. – News and notes from this week’s Fall Storage Networking World (SNW):

Avere and Fujitsu America have forged a “meet in the channel” partnership matching Avere’s NAS acceleration device with Fujitsu storage arrays.

The vendors and their channel partners are bundling a two-node Avere FXT 3100 Edge filer cluster with Fujitsu Core filer with UDS NAS controllers and Eternus DX80 S2 Disk Storage System. Avere and Fujitsu call it the “100/100/100” bundle because it provides 100 TB of capacity and 100,000 IOPS for $100,000. Larger bundles are available, up to 2 PB and 2.5 million IOPS.

Avere CEO Ron Bianchini said the idea for the bundles came about because Avere and Fujitsu had common media and entertainment customers using their products. “We’ve been meeting often in customer sites,” he said. “They [Fujitsu] do data management well, and we do off-load well.” …

Former LeftHand Networks CEO Bill Chambers has taken over the CEO role at Starboard Storage. Chambers was LeftHand’s CEO when Hewlett-Packard bought the iSCSI vendor for $360 million in 2008. He joined Starboard as executive chairman shortly before the vendor came out of stealth earlier this year as a re-launched version of Reldata. He replaces Victor Walker as CEO. Walker had been CEO of Reldata since early 2011 and stayed on through the re-launch. Starboard hasn’t announced the CEO change, but Chambers is listed as CEO on the company website. …

Sepaton began shipping its S2100-E3 virtual tape library (VTL) with Hitachi Data Systems HUS 100 storage on the backup and its latest software version.

The system can scale to 2 PB and the new software supports DBeXstream technology that speeds deduplication of multistreamed and multiplexed enterprise databases. Sepaton has used HDS storage in its VTLs since 2010, but the HUS platform hit the market in August.

Pricing for the S2100-ES3 Series starts at $335,000, and S2100-ES2 customers can add new HUS 110 storage to their libraries. …

Imation has kept busy this year integrating data security acquisitions into its disk and removable drive storage, establishing its CyperSafe brand of encryption, identity and authentication, and key management capabilities.

Next up is moving the data deduplication it acquired from Nine Technology last December into its backup products. Brian Findlay, executive director of Imation’s storage product management, said the vendor will integrate dedupe into its DataGuard appliances that use hard drive and RDX removable storage. Imation is also working on an integrated storage appliance using Nine backup technology.

The 2013 roadmap also includes a private cloud backup offering that Imation will either host or sell software to server providers to host. Imation now supports public clouds through cloud seeding and replication between sites.

“The cloud is coming,” Findlay said. “SMBs are still comfortable with onsite backup. It’s one thing to get your data up there, but another thing to restore. But you can move a lot of data to the cloud with RDX.”


October 18, 2012  8:09 AM

When organizational issues inhibit IT progress

Randy Kerns Randy Kerns Profile: Randy Kerns

Information technology (IT) must continue to adapt and change as new demands arise and new technology is introduced. The new demands include more capacity for storing information as well as changes in procedures such as security and compliance.

The introduction of new technology presents the opportunity to obtain greater value from IT investments. Deploying server virtualization technology and increasing the number of servers virtualized has brought economic value and IT agility. New technology is a competitive issue, helping businesses handle information more effectively and faster.

Still, many IT operations take longer than they should to introduce and embrace new technology. So what is holding back companies from taking an obvious advantage? Why does it take a major reboot of IT to make changes for some organizations? Looking at many IT operations, there are common reasons that delay seizing the opportunities.

The most common reason is that the organizational structure for IT inhibits transformational changes. The structure creates a natural resistance to change for several reasons:

• There are many people involved in direction setting and approvals. Some may be other business unit owners or related organizations.

• Stakeholders brought in to participate in decision processes need to be informed and educated on technology and requirement changes.

• With more people, the parochialism can result in new demands that disrupt any efficient process.

To illustrate this problem, I will go through one of many examples that I’ve dealt with recently. In this case, the IT organization had been compartmentalized over time after individuals were promoted and functions separated.

The result was a number of IT directors that had equal authority and covered areas of specialization in IT. Other IT directors were given responsibilities to be the advocates for specific business units, again with equal weight. These directors could negate any change in IT that they did not agree with, and the CIO could not force change without consensus.

This means that all substantive decisions would require the cooperation or endorsement of all internal IT directors and the business units represented by the other IT directors. Education for a technology change required large group meetings, which were hard to schedule because of limited availability of the parties.

Compounding the problem, various vendors called on the individual IT directors and created internal competition and confusion. That caused delays in needed changes and frustration that it took more work to educate and convince others than to do actual implementation. The IT organization kept falling behind in technology and other advances. It was perceived as having archaic operations. Ultimately, an examination of outsourcing was seen as a means to implement change.

Business structures for IT need to match the requirements and pace of change for IT. They must allow for change as a natural process for competitive improvement. The decision-making process must be effective and timely and not mired in the inclusiveness of every possible person. The structure must include strategic planning as part of an organizational process. The process should include technology evaluation, education, and understanding industry best practices. Without a structure that matches the change rate required with IT, IT will periodically have to do a major reset.

(Randy Kerns is Senior Strategist at Evaluator Group, an IT analyst firm).


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