NetApp, Brocade and Hewlett-Packard last week all reported storage revenues that were better than expected, impressing Wall
Street analysts and investors. Yet in each case their revenue declined from last year. The better-than-expected numbers were achieved because of lowered expectations due to sagging storage sales.
NetApp beat its previous forecast in its first quarter following a CEO change, but its revenue continued to shrink from the previous year as it transitions to its clustered Data OnTap operating system.
NetApp revenue of $1.33 billion decreased 10 percent from last year, although it came in above the mid-point of the vendor’s previous forecast. Product revenue (outside of maintenance and service fees) of $664 million was down 25 percent from last year and 27 percent from last quarter, and below expectations.
“We did what we said we would, but we’re clear that we have a lot more work to do,” new CEO George Kurian said on the earnings conference call with analysts.
Kurian, who replaced Tom Georgens as CEO in June, added, “We have a heightened sense of urgency in working with our customers to enable their move to the modern architectures delivered by our portfolio.”
He said NetApp is “aggressively pivoting” towards a product portfolio consisting mainly of software-defined storage, flash, converged infrastructure and hybrid cloud.
One of NetApp’s major challenges is to upgrade customers from Data Ontap operating system to clustered OnTap. Kurian said shipments of clustered systems grew by around 115 percent last quarter and was deployed in 65 percent of the FAS arrays shipped compared to 25 percent a year ago. But those clustered deployments are predominantly with new customers, and clustered OnTap still accounts for only 15 percent of NetApp’s total installed base. That is up from 11 percent in the previous quarter, but there is still a long way to go.
“The percentage of our installed base that has migrated to clustered OnTap has been small,” Kurian said.
Brocade’s storage sales usually reflect those of the large storage vendors who sell Brocade switches and large directors as part of their SANs. Brocade’s storage revenue of $309 million decreased five percent from last year, which was a little better than expected after EMC, NetApp, HP, Hitachi Data Systems and IBM all reported flat or declining storage product revenue.
Brocade CEO Lloyd Carney said his company took a “prudent view of the storage business” with its forecast for last quarter but said he sees the Fibre Channel market stabilizing and “will remain durable for many years.” He also said IP storage and flash are pushing sales of network storage switching.
Carney said as long as data grows, companies will have to add storage.
“I worry about this space when people stop buying more storage,” he said. “When the overall storage market stops growing, then I start to worry. As long as overall storage market continues to grow … year over year, there’s going to be the need for more either Fibre Channel storage or IP-based storage.”
HP’s storage revenue of $784 million was down two percent from last year, which is better than HP has done in recent years. CEO Meg Whitman called it a “strong quarter” for storage.
As usual, HP’s best storage performer was its 3PAR StoreServ platform, which grew in double digits. HP converged storage (3PAR, StoreOnce, and StoreAll) revenue of $393 million grew eight percent, and now makes up most of the vendor’s storage sales.
“We’ve turned the corner in storage,” Whitman said. “3PAR is fulfilling the promise that we’ve all known 3PAR has had for many, many years. So listen, we’re feeling good about this business. We’ve got good momentum, and I think you’re going to see continued strength here over the next few quarters.”
NetApp, HP and Brocade all said they are receiving a boost from flash in storage arrays.
NetApp said revenue from all-flash arrays increased 140 percent from last year and HP reported 400 percent growth in 3PAR all-flash storage, although those all-flash products were in early stages last year. Brocade VP of storage networking Jack Rondini said around 70 percent to 80 percent of flash systems use Fibre Channel and will help keep Fibre Channel relevant.
“The attachment of flash continues to be one of the most disruptive factors in the data center,” Rondini said.
Scality scored its second major server reseller deal this week when Dell added the object storage vendor to the Blue Thunder program that combines software-defined storage with Dell servers.
Hewlett-Packard has been reselling Scality Ring software since late 2014.
“This is a formality of the transactions we’ve seen on the field,” said Erwan Menard, chief operations officer at Scality. “We have hand a number of customers that have built a high-performance NAS that runs on Dell hardware.”
Scality’s Ring software uses a de-centralized distributed architecture, providing concurrent access to data stored on x86-based hardware. Ring’s core features include replication and erasure coding for data protection, auto-tiering and geographic redundancies inside a cluster. Reference hardware configurations for Scality include using Ring with Dell PowerEdge R73oxd rack servers or a combination of the Dell PowerEdge R630 rack server with Dell Storage MD3060e.
Menard said Scality configurations typically are large-scale deployments in the petabyte range.
“Never under 200 terabytes, for sure,” he said. “It’s definitely large scale, very much with an emphasis around archiving. The Blue Thunder SDS platform promises customers are single-point of accountability. The Ring software can run on any PowerEdge server and we will offer the best solution for running petabyte deployments that Scality is suited for.”
Having the reference architectures allow customers to deploy Scality Ring on new hardware as soon as it is available.
“We can offer sample configurations based on use cases,” said Travis Vigil, executive director of product management at Dell storage. “You can think of it as a recipe for customers to easily move Scality deployments into their environments.”
NEC Corp. of America has enhanced its Hydrastor scale-out backup and archive storage platform with a Universal Dedupe Transfer and added an Open Storage Technology (OST) Accelerator for Veritas NetBackup. The new features in HydraAstor 4.4 are aimed at cloud service providers.
The company’s Universal Dedupe Transfer capability supports Linux while Windows and Solaris support are on the road map. Dedupe Universal Transfer pre-processes data stream on the media server and allows customers to do high-speed full backups from a remote location.
It’s built on NEC’s Universal Express I/O, which was introduced in the previous software upgrade, and includes in-flight compression and encryption. The capabilities can be deployed together to maximize bandwidth and get higher performance.
“This opens the door to extend remote backups. Rather than put separate systems in each location,” said Gideon Senderov, NEC’s director of product management and technical marketing. “Just place dedupe transfer software on the source side. Before if someone wanted remote backup, they would have a full system in remote locations and replicate data. This eliminates the need for that. It makes it possible to do full backups over the wire. Each hybrid node gets up to 40 Terabytes an hour.”
NEC’s Universal Dedupe Transfer also does not require application-specific integration. The capability is built on the Universal Express I/O function that NEC introduced in the previous upgrade.
NEC also introduced an OST Accelerator for NetBackup for automated and speedier backups. This capability offloads the synthetic full back up process from the media server to Hydrastor nodes. It also automates the synthesis of the subsequent full backup as the new incremental backup is received. Users can eliminate weekly full backups from the job schedule and maintain an up-to-data backup image with only incremental backups.
“The full backups and incrementals are all read into the media server so it doesn’t have to collect from all the clients,” Senderov said. “So the media server creates new files and writes them to the storage system. With incrementals, it automates the synthetic changes into full backups at the storage array.
“The incrementals are done to the array and the synthetics constantly create a new full. We optimized metadata pointers and eliminated a lot of reads and writes so there is a high GBs performance improvement.”
NEC also upgrated its HydraStor monitoring management tool, adding a command line interface that aggregates deduplicaton and compression statistics per backup job.
The executives who have been working to turn Veritas Technologies into a standalone company say their plans have not changed with the $8 billion sale to The Carylye Group.
Symantec disclosed last October that it would spin off its storage business into a separate company, and said in January that the new company would be called Veritas. The plan called for Veritas to become a separate public company in January 2016.
However, Symantec shopped Veritas to interested suitors and found Carlyle’s price was right to buy Veritas and run it as a privately held company.
The Carlyle acquisition is expected to close around the end of this year, around the same as the spinout was planned. Matt Cain, Veritas EVP and chief product officer, said little else will change from the company profile and strategy he laid out for SearchDataBackup.com in June. He added this week that Veritas is continuing with plans to roll out backup and data management products that it disclosed last month, including NetBackup 7.7.
Cain said more products will be launched before the Carlyle acquisition closes.
“There’s no change to our strategy,” Cain said. “Employee count, location, leadership team, product roadmap will be the same. We may be accelerating the pace at which we execute, either through acquisitions, or other inorganic growth.”
Cain will remain in his position after the acquisition, and Brett Shirk will stay on as VP of worldwide sales for Veritas.
Veritas general manager John Gannon, who led the transition period in anticipation of a spinout, will join the Veritas board.
The Carlyle Group said Bill Coleman will be CEO and Bill Krause will become chairman when the deal closes.
Symantec CEO Michael Brown said during a conference call Tuesday that Symantec “considered other options for our Veritas business and ultimately determined that a sale of Veritas to Carlyle is in the best interest of Symantec’s shareholders because it delivers both an attractive and certain value.”
Gannon would not disclose those other options.
“We just got married,” he said. “We can’t talk about who else we dated.”
He did say Carlyle executives “strongly believe in our strategy, our market position and product portfolio and want to be part of it.
“This is a different outcome than the spinout we originally announced but we believe it is tremendous value to Symantec and Veritas because the outcome is certain.”
Symantec actually received $5.5 billion less for Veritas than it paid for the storage software vendor in its $13.5 billion 2005 acquisition.
Count Toshiba among the group of drive makers demonstrating new enterprise PCI Express (PCIe) and SAS SSDs at this week’s Flash Memory Summit in Santa Clara, California.
Toshiba unveiled three families of PCIe SSDs that support the non-volatile memory express (NVMe) protocol – one for notebooks and PCs, another for thin notebooks and tablets, and a third for servers and enterprise storage appliances. The company touted low power consumption with its new enterprise PX04P series, which is due for release in the fourth quarter.
Cameron Brett, director of SSD product marketing for Toshiba’s storage products business unit, claimed the enterprise PX04P drive can deliver more than 650,000 IOPS at 18 watts of power for certain workloads. He said the enterprise NVMe PCIe SSDs are geared for data center, hyperscale and cloud users trying to eke out as much performance as possible while keeping down their power costs.
The PX04P series is Toshiba’s first enterprise NVMe PCIe drive. The product is available in two form factors: 2.5-inch SSD with SFF-8639 connector and half-height half-length (HHHL) add-in card. The drives support up to four lanes of PCIe 3.0 and use Toshiba’s QSBC error-correction technology. Some versions support self encryption, according to Brett.
Brett said the PCIe SSDs are hot swappable if the system supports it. He said a “surprise removal, where everything is up and running and you just yank the drive” must be done with a Toshiba device driver.
PX04P customers have a variety of endurance and capacity options. The base model offers capacities of 800 GB, 1.6 TB and 3.2 TB. But, Brett said users could increase the capacity by altering the endurance level. For instance, with a 3.2 TB drive, the user could change the endurance from 10 drive writes per day (DWPD) to one DWPD to boost the capacity to 4 TB, according to Brett.
Brett said the PX04P NVMe PCIe drives are based on the same controller chip as the PX04S Series of enterprise 12 Gbps SAS SSDs that Toshiba announced last week. He said the same Japan-based development team worked on the SAS and enterprise PCIe NVMe SSDs. Toshiba listed the following endurance choices:
High Endurance (PX04SHB): Supports 25 DWPD with a 100% random workload. (Toshiba noted: “One full drive write per day means the drive can be written and rewritten to full capacity once a day every day for five years, the stated product warranty period.”)
–Capacity options: 200 GB to 1.6 TB
–Target workloads: Write-intensive virtualized data centers, big data analytics and high-performance computing.
Mid-Endurance (PX04SMB): Supports 10 DWPD.
–Capacity options: Up to 3.2 TB.
–Target workloads: online transaction processing (OLTP) and e-commerce.
Value-Endurance (PX04SVB): Supports 3 DWPD.
–Capacity options: Up to 3.84 TB
–Target workloads: Read-intensive applications such as media streaming, data warehousing and web serving.
Read-Intensive (PX04SRB): Supports 1 DWPD.
–Capacity options: Up to 3.84 TB.
–Target workloads: Enterprise and Web-based applications such as video on demand and data warehousing.
“With the SAS drives, we’re going to be offering all the different endurance points as separate models, where with the PCIe, we’re going to offer one base model and then you change the overprovisioning to the capacity and the endurance you need,” said Brett.
Toshiba isn’t the only vendor offering customers a choice of varying endurance and capacity levels. For instance, Seagate this week unveiled NVMe PCIe SSDs with models of differing capacities that are either endurance-optimized/mixed-workload or capacity-optimized/read-intensive. Last week, Seagate teamed with Micron on the launch of new 12 Gbps SAS SSDs that offer four endurances options at various capacity points.
Pure Storage today filed for an initial public offering (IPO) in hopes of becoming the second all-flash storage array vendor to go public following Violin Memory.
In its filing with the U.S. Securities Exchange Commission, Pure claimed it has more than 1,100 customers since launching its FlashArray platform in 2012 as one of the early all-flash startups on the market. Pure was second in market share behind EMC in all-flash arrays in 2014 according to analyst firms IDC and Granter.
Pure’s filing put its 2014 revenue at $174 million, more than quadrupling its 2013 revenue. Pure reported $74 million in revenue in the first quarter of this year, tripling its revenue from the first quarter of 2014.
However, Pure continues to sustain heavy losses. It lost $183 million in 2014 following losses of $79 million the previous year and $23 million in 2012. In the first quarter of 2015, Pure lost $49 million. Pure has 1,100 employees.
Despite its rapid revenue growth, Pure remains far behind EMC, which forecasts $1 billion in sales of its XtremIO all-flash array for 2015. While Pure has been by far the leader among the group of startups that entered the market around the same time, it also faces increased competition from all the major storage vendors who have added all-flash systems.
The SEC filing said Pure hopes to generate at least $300 million from its IPO, but will probably seek more. No date for the IPO is set, but it is unlikely to happen before late 2015 or early 2016.
Pure has raised $531 million in eight funding rounds, and its valuation was placed at more than $3 billion during its last round.
Pure executives hope they can go public more successfully than Violin, which is still struggling with losses and its $2.33 share price is less than one-third of its disappointing $9 IPO price from 2013.
Box today has hired the former CEO of EMC Syncplicity.
Jeetu Patel, the former general manager of EMC Syncplicity enterprise file synchronization and sharing (EFSS) business unit, has joined the competing company as the senior platform and chief strategy officer at Box. He will report to CEO Aaron Levie. Patel will lead Box’s platform organization while driving the strategy behind the platform business and developer relations.
The company’s corporate development organization, led by Villi Iltchev, senior vice president of corporate development, will report to Patel.
The news comes several weeks after EMC sold the Syncplicity sync-and-share business to Skyview Capital, a private investment firm based in Los Angeles that holds a portfolio of enterprise tech companies centered on mobile and networking.
EMC acquired Syncplicity in 2012, as the online file sharing market started to become popular. However, EMC decided the business was a poor fit with its overall sales model and its storage and IT infrastructure focus. Paterl did not make the move with Syncplicity to Skyview.
Jonathan Huberman, a former EMC executive, is Syncplicty’s new CEO.
Box is a file-sharing and collaboration company and is one of the start-ups that pioneered file sync-and-share technologies. The company claims its ecosystem has grown to include 50,000 developers and serves 4.5 million billion third-party API calls per month. This past April, Box announced its Box Developer Edition that will leverage all of the company’s core enterprise-grade functionality.
The cloud computing company offers three account types to users that include Enterprise, Business and Personal. Each account type has features such as unlimited storage, custom branding and administrative controls. Applications such as Google apps, NetSuite and Salesforce can be integrated with Box.
Syncplicity, founded in 2008, competes in the same market along with Dropbox, Watchdox, Egnyte, Citrix Systems, Accellion, Ctera, Microsoft OneDrive for Business, Google Drive and other smaller vendors.
Patel held several leadership roles in EMC’s Information Intelligence Group, including chief marketing officer, chief strategy officer and chief technology officer. Prior to joining EMC, he was president of Doculabs, a research and advisory firm focused on collaboration and content management across a range of industries, including financial services, insurance, energy, manufacturing, and life sciences.
Today Nutanix said a leading virtual desktop infrastructure (VDI) application will work with its Acropolis software. No, it’s not VMware Horizon. The partner is Citrix, which said it will support Acropolis on XenDesktop and Citrix XenApp products along with NetScaler and ShareFile.
VDI is a key use case for Nutanix hyper-converged products. Most of its customers use VMware hypervisors, but Nutanix is positioning itself to provide an alternative to VMware. VMware started competing with Nutanix when it launched its Virtual SAN (VSAN) hyper-converged software in 2014, and Nutanix answered by developing its own hypervisor this year.
“This is a big milestone, because until now customers probably would not have deployed XenDesktop on our Acropolis hypervisor,” said Howard Ting, nutanix senior vice president of marketing. “We need to build out our [Acropolis] ecosystem. VDI is important to us and naturally, you can assume we will not get VMware Horizon support. We felt Citrix support was critical.”
The Acropolis architecture lets customers move from one hypervisor to another, so a Nutanix customer running XenDesktop with VMware vSphere can move it to the Acropolis hypervisor.
Symantec’s spin-out of Veritas took a twist today when The Carlyle Group and other investors agreed to purchase Veritas for $8 billion. That’s $5.5 billion less than Symantec paid for Veritas in a 2005 blockbuster acquisition.
Symantec was preparing to spin-out its Veritas backup and storage management division with a target date of January 2016 for Veritas to become a separate public company. The Carlyle sale is expected to close around the end of 2015, so the timeline should remain about the same. Veritas will be private under Carlyle’s ownership.
The move wasn’t surprising because it was known that Symantec was shopping Veritas while planning the spin-out. Along with an $8 billion cash payout, Symantec CEO Michael Brown said the sale “helps us simplify the separation process.”
During a conference call today to discuss the deal and quarterly earnings, Brown emphasized that the sale will be good for Symantec shareholders. It’s unclear how it will affect Veritas, which was already far along the path of preparing to become its own company.
The Carlyle Group did name the new leaders of Veritas. Bill Coleman will be CEO and Bill Krause will become chairman when the deal closes. Coleman was a founder and CEO of BEA Systems, an enterprise software vendor acquired by Oracle in 2008. He also was CEO of cloud software vendor Cassatt, and an executive at Sun and Visicorp. He has been a partner with venture capitalist firm Alsop Louie Partners the past five years.
Krause is a Carlyle executive and board partner for VC firm Andreessen Horowitz, and director of SAN switching vendor Brocade and several other companies. He is former CEO of networking vendor 3Com, which Hewlett-Packard acquired.
A quote from Carlyle’s press release on the deal makes it sound as if Coleman will proceed with the strategy Veritas has been implementing. Coleman said he looks forward to partnering with current Veritas GM John Gannon, chief product officer Matt Cain and VP of worldwide sales Brett Shirk “and the rest of the existing leadership team to establish Veritas as a free-standing company and reinvigorate our culture to drive innovation and value creation.”
Brown said revenue from Symantec and Veritas took a hit last quarter, and he blamed it on a sales force realignment along with executives performing due diligence for the Veritas sale.
Information management revenue of $587 million fell 10 percent from last year, despite double-digit growth in NetBackup software and appliances.
Add Dot Hill Systems to the list of smaller storage vendors who are growing revenue significantly while their large rivals stumble.
Dot Hill is unlike the other vendors who are bucking the trend of declining or flat revenues experienced by EMC, NetApp, Hitachi Data Systems, Hewlett-Packard and IBM. The big difference is it has been around since 1984. In tech years, that makes Dot Hill old enough to be the grandfather to the likes of Nutanix, Nimble Storage, Pure Storage and Tintri. And it has been through some rough times, unlike its younger rivals.
Dot Hill also has a different business model. It sells most of its systems anonymously through OEM partners who re-brand its storage. HP’s MSA platform and Lenovo’s S3200 and S2200 are versions of Dot Hill’s AssuredSAN arrays. Quantum also uses Dot Hill storage for its StorNext scale-out systems and DXi disk backup targets. Dot Hill has other OEM and channel partners who build systems tailored for vertical industries, most notable telecom, gas and oil, data analytics, media and entertainment, and high performance computing.
But Dot Hill is growing like a startup. Today the vendor reported $60.06 million in revenue for last quarter, up 25 percent from last year and above expectations. Dot Hill also exceeded Wall Street expectations with non-GAAP income of $3.9 million, which tripled its $1.3 million in income from the same quarter last year. Dot Hill’s forecast for 2015 revenue is from $245 million to $260 million, compared to $217.7 million for 2014.
The growth and optimism comes despite what Dot Hill CEO Dana Kammersgard admitted were headwinds in the storage industry that “are not abating and are likely to exist through 2016.”
So why is Dot Hill bucking that trend? Kammersgard said part of it has to do with its technology. Dot Hill used to mainly supply the hardware for its partners but has added software such as RealStor for autonomic real-time tiering in recent years. Kammersgard said RealStor helped win OEM deals and boost sales for its partners.
He called RealStor’s tiering a disruptive technology for hybrid flash arrays. “The fact that we [tier data] invisibly and in real-time is a significant disruption to the next-generation and traditional storage hierarchy,” Kammersgard said.
Kammersgard also attributed Dot Hill’s channel strategy for its growth. Dot Hill patiently cultivates OEM partners – particularly in vertical markets – that most storage vendors don’t chase because it could take more than a year to get products into the market.
“Traditional storage companies are focused on data centers and the cloud,” Kammersgard said. “They’re not focused on the line of business product portfolio for these [vertical] companies. There is a lack of inclination to pursue OEM business. Large companies like EMC, NetApp and Hitachi are slow to move and inflexible, and not suited to go the OEM route. The new guys like Nimble are basically about sales at any cost, growth at any cost, so they are not suited to taking 18 months to close a deal.”