Word is coming out of Israel that EMC is deep in talks to acquire software-based storage startup ScaleIO for a price tag in the range of $200 million to $300 million. ScaleIO came out of stealth last December with software that it positions as a virtual storage appliance for enterprises and cloud service providers.
ScaleIO would fit the software-defined storage strategy that EMC laid out for its ViPR software last month at EMC World. EMC’s vision for ViPR combines the ability to pool storage across any hardware with cloud management capabilities. ScaleIO’s Elastic Converged Storage (ECS) can help on both fronts.
ECS agents install on servers running hypervisors, databases and other applications. The software aggregates capacity on those servers, turning them into a large storage network. The concept is similar to the virtual storage appliance (VSA) approach taken by Hewlett-Packard’s StoreVirtual VSA, built on LeftHand technology and VMware’s vSphere Storage Appliance, but those products are for small- and medium-sized businesses and small enterprises.
ECS would be a fit for public cloud storage, which tends to be more server-based than SAN- and NAS-focused enterprise storage. ScaleIO founder and CEO Boaz Palgi claimed at launch that he had one customer using ECS on 260 nodes. He said customers can add nodes on the fly and the software automatically rebalances performance.
It’s too soon to say how much of ScaleIO technology would end up in ViPR, but it’s unlikely that EMC would make a software buy now without considering it part of its software-defined strategy.
“This possible move leaves us to think more deeply about EMC’s willingness to aggressively step in front of potential meaningful disruptive secular changes,” Stifel Nicolaus Equity Research financial analyst Aaron Rakers wrote in a report to clients today. Rakers added that he sees the possible acquisition as “another move to position itself against the evolution toward open source solutions, pubic cloud providers and other software vendors pushing into software-defined storage.”
ScaleIO, which is based in Israel but has a Palo Alto, Calif. office, raised $12 million in funding from Greylock Partners, Norwest Venture Partners (NVP) and private investors.
There is at least one vendor who refrains from defining its software-driven storage technology as software-defined storage.
Despite its reliance on software for differentiation, hyper-converged storage vendor Nutanix refrains from using the software-defined storage tag that many vendors are embracing.
Greg Smith, Nutanix senior director of product and technical marketing, said Nutanix qualifies for that label because it delivers storage as software natively in the virtualization tier so “the virtualization manager no longer has to manage software, it becomes invisible. But we think there’s enough tangible value to customers that we do not need to resort to that level of marketing.”
Nutanix shifted marketing gears with its product name, switching from the Nutanix Complete Cluster to Nutanix Virtual Computing Platform. Smith explained by change by saying “as our product category evolves, we need to describe a class of solutions that converges compute and storage at a platform or appliance level.”
However Nutanix is marking its systems, it seems to be working. Nutanix claims it is on an annualized run rate of over $80 million in revenue, which means it had more than $20 million in sales in the first quarter of 2013. That’s a healthy number for a startup, especially in a quarter where storage disk sales declined year-over-year for the first time in four years.
NetApp unleashed Clustered Data Ontap 8.2 today, using the launch to again make its case as the king software-defined storage.
Since EMC revealed its ViPR software-defined storage technology plan last month, NetApp executives have claimed they do much of the same things in Clustered Data Ontap.
Part of 8.2 is about making its quality of service more granular and improving scalability to support 69 PB of storage and 24 controller nodes, 49,000 LUNs, and 12,000 NAS volumes supporting over 100,000 clients. It supports 20 PB in a single container. NetApp also added availability for SnapVault, which was not supported in Clsutered Ontap 8.1.
The more important piece of the upgrade is enhanced storage virtual machines (SVMs), which have some of the capabilities that EMC is claiming for ViPR.
SVMs are virtualized storage arrays defined in Ontap than run inside NetApp FAS or V-Series controllers. Customers can grow them, shrink them, or move them on demand. Hundreds of SVMs can run on one piece of hardware, according to Brendon Howe, NetApp VP of product marketing.
SVMs evolved from the VirtualFiler, or vFiler, that NetApp added with Ontap 7. SMVs, however, are not tied to the underlying hardware. They can be moved across devices while retaining full Ontap storage services, Howe said.
Data Ontap Edge also plays a role in NetApp’s software-defined storage strategy, and the vendor plans to use Edge to deploy clustered Ontap on x86 hardware.
NetApp has supported server virtualization through its V Series controllers since 2006, before anybody called that software-defined storage. But Howe said NetApp has taken a different approach to pooling storage than other vendors and its version fits the software-defined storage label.
“Software-defined storage is closely tied to traditional storage virtualization,” he said. “We’ve assured that all rich management capabilities of our storage systems are made available in that virtual layer, instead of federating systems. We said, ‘What if you pool systems and don’t sacrifice any functions of any systmems in that pool?’
“Software-defined is an emerging discussion these days. I think it’s a discussion of how you enable services to be dynamically provisioned.”
Solid-state storage vendor sTec’s management team is in a fight to maintain control of the company ahead of next month’s board of directors election. The vendor and unhappy investment firm Balch Hill Partners today sent letters to shareholders making their cases for the candidates they have nominated for election.
Balch Hill is the largest independent shareholder of sTec, with approximately 10 percent of its common stock. The unhappy investors want to remove sTec’s CEO, former CEO and another director from the board. The Balch Hill letter called for shareholders to hold the sTec board accountable and charged it with destroying more than $1.3 billion of shareholder value. It also called for accountability for the company’s poor financial performance, pointing out that revenues dropped 56% in the last quarter from the previous year and 77% from two years ago. During the same time, sTec increased research and development spending 68% as it moves from an OEM sales model to selling direct and through VARs.
Balch Hill said, if elected, its nominees would immediately hire an interim CEO and launch a search for a permanent CEO to re-engage large OEM customers, return the business model to focus on OEMs, re-evaluate the company’s PCIe, SATA, I/O software and other business initiatives and explore a sale of sTec if it cannot stand on its own.
STec chairman Kevin Daly sent a letter on the vendor’s behalf, claiming sTec is making progress with its new business plan and its goal of generating more than $200 million of revenue in 2014 (its 2012 revenue was $168.3 million, down from $308 million in 2011.)
Balch Hill also said that sTec’s operating losses of more than $103 million for last year and $25 million more in the first quarter of 2013 raises concerns that the vendor will run out of money by mid-2014.
“We believe the Company has lost incredible market share in the wake of increasing competition because the Board first failed to anticipate such market share losses and then, in response to rising competition, decided to pursue a flawed strategy that is focused on going after its direct end users (its customer’s customers) rather than trying to repair its relationships with its large storage OEM customers …” the letter read.
The Balch Hill letter also called sTec’s spending “excessive and ineffective.”
Balch Hill has nominated Adam Leventhal, Clark Masters and Eric Singer to replace three of sTec’s eight directors at the July 12 election. The investment firm is seeking to remove CEO Mark Moshayedi, his brother and former CEO Maounch Moshayedi and Matthew Witte from the board. Manouch Moshayedi stepped down as CEO last year after the Securities and Exchange Commission (SEC) charged him with insider trading. The Balch Hill letter also claimed “Mark Moshayedi has a significant cloud over him regarding his questionable trading practices and the continued underperformance of the Company under his leadership.” Mark Moshayedi has not been charged by the SEC but was a subject of the original SEC investigation that brought charges against his brother. Mark Moshayedi was sTec’s president and COO during the time when the SEC charges his brother with insider trading.
Balch Hill wants Witte removed because he has failed to “launch a proper CEO search” as chairman of the nominating and corporate governance committee. Witte’s committee has also failed to independently investigate the SEC’s claims, Balch Hill charged.
In an interview with SearchSolidStateStorage last month, Mark Moshayedi said is brother’s case “has nothing to do with the company. The company and I have been cleared of any wrongdoing. Obviously, Manouch has his case, and it’s something he’s dealing with.“
Daly’s letter today defended sTec’s new business plan that took effect this year.
“We are beginning to see significant traction from our new go-to-market strategy and are successfully diversifying our customer base to include enterprise end customers, a segment we believe is key to our growth objectives and long-term success,” Daly wrote.
“We believe that the successful execution of this carefully crafted strategy, with specifically delineated milestones over the course of the next few years, will deliver long-term value to all sTec shareholders.”
Daly also proposed adding Alan Baratz to the board as it expands from seven to eight directors. Baratz has served in senior management positions at Cisco, Sun, and storage startup Neopath Networks. Daly said sTec has offered to add two of Balch Hill’s candidates to the board, calling that “more than reasonable representation given their combined approximate 9.8% ownership position …” but that Balch Hill declined the offer.
Cloud storage gateway startup Panzura pocketed $25 million in a Series D funding round this week, and CEO Randy Chou said he expects it will be the last funding the company needs before becoming profitable.
Chou said he expects to double the company’s headcount to 200 people with the funding. He also plans to expand Panzura’s presence in Asia-Pacific and increase research and development for its products.
The Panzura is one of several startups that popped up in the past few years selling gateways to move data to public clouds. The main function of their controllers is to translate object storage to work with applications written to communicate with file and block storage. Others included Ctera Networks Ltd., TwinStrata, Nasuni Corp., and StorSimple Inc., which was acquired by Microsoft in late 2012.
Chou said Panzura’s business has accelerated since Microsoft purchased StorSimple last year. “The market picked up as a whole in the third quarter last year,” he said.
He said 75 percent of Panzura’s leads come from partners such as EMC, Hewlett-Packard, Hitachi Data Systems, Nirvanix, Dell, Google and Amazon.
In December, Panzura clinched a multi-million dollar deal with the Executive Office for U.S. Attorneys, a huge win that Chou said he hopes will open up doors for Panzura in other areas of government. He attributed the deal largely to Panzura’s Storage Controller receiving the Federal Information Processing Standard (FIPS) 140-2 security validation. Its product also has Advanced Encryption Standard (AES). The company also has a deal with the Department of Justice.
Founded in July 2008, Panzura raised $6 million in a Series A funding in September 2008 and another $12 million in October 2010. Venture capitalist Meritech Capital Partners led the latest round with participation from previous investors Matrix Ventures, Khosla Ventures, Opus Capital and Chevron Technology Ventures.
“Avoid vendor lock-in” has been a mantra for a long time by other vendors and marketing promotions. Vendor lock-in is equated to a lack of choices or an impediment to making a change in the future. The lack of choices results in:
• Paying more for the next product or solution
• Failure to keep up with and benefit from new technology
• Reduced support or concern from the vendor in solving a problem.
These may be more fear-mongering from competitive vendors than reality, although there are companies that have demonstrated reprehensible behavior that is generally assigned to have a customer “locked-in.”
Recent marketing hype in the information systems and management industry has been focused on using “software-defined something” as a means to avoid vendor lock-in. In this case, they mean lock-in with hardware. Other valuable attributes for the software-defined message are added to the discussion but the most basic argument is the flexibility of using software on generic (general purpose) hardware.
In the case of software-defined storage (which has a wide range of meanings depending on which vendor is talking), the software seeks to take the value out of storage systems. The message is that removing the value of the storage system and using generic hardware and devices will remove vendor lock-in to a particular storage system from a vendor. With the messaging that vendor lock-in is bad and costs more, the software-defined argument builds an affinity value message.
But the real question is: did the lock-in just get moved to somewhere else? Rather than a storage system that is replaceable, albeit with effort to migrate data and change of operational procedures, the lock-in may move to software. In this case, the software determines where to place data. The software has control of all the fragments that are distributed across physical devices. The software in the storage system (embedded software or firmware in an earlier generation lexicon) and software-defined storage are doing relatively the same thing at one level.
If lock-in (as defined earlier) is being moved from a vendor storage system to software, the impacts of lock-in need to be evaluated. One consideration is the long-term financial impact. Software has a support cost – either from a vendor or from the IT staff in the case of open source. Additionally, some software is licensed based on capacity. These changes continue for as long as the software is in use. Storage systems are typically purchased and have a warranty that is often negotiated as part of the sale. It is common to get a four-year or five-year warrant. After that time, there is a maintenance charge. Some of the value-added features of the storage system are separately licensed which may be annualized or capacity-based. This is a competitive area, however, and some vendors include the value-add software for their systems in the base price.
Storage systems have had a consistent price decline over the years, transferring the economics of improving technology and the effect of competition to the customers. Software typically does not have commensurate price reductions. It is seen as an annuity for the vendor for maintaining and updating.
The vendor lock-in message triggers emotion and rapid conclusions that may not represent reality. Deeper analysis is required on specific situations. The value of “compartmentalizing” information handling to allow technology transitions or transformations rather than massive infrastructure change that become inhibitors cannot be discarded in considerations. The vendor lock-in message is not really that simple, and attributing the next new thing as being the answer is not well thought out.
(Randy Kerns is Senior Strategist at Evaluator Group, an IT analyst firm).
Enterprise systems with scale-out capability have been making an impact in IT environments and are almost always a consideration in every evaluation of client storage strategies.
Although there are scale-out implementations of block and object storage, NAS has been the primary focus for enterprise scale-out storage deployments. Scale-out products range from the enterprise down to the SMB market. Some high-end scale-out NAS systems such as EMC Isilon and Hitachi Data Systems HNAS have made a transition from high performance computing (HPC) to enterprise IT.
Benefits of using scale-out NAS include:
• Performance scales in parallel with capacity so increases in capacity do not cause performance impacts requiring additional administrative effort to diagnose and correct.
• The continued increase in unstructured data can be addressed without a single administrative system without increasing administrative efforts and costs.
• New technology elements can be introduced and older ones retired without having to offload and reload data.
Not all NAS systems offered today are scale out. Traditional dual-node controller NAS systems still fit many customer needs, and are usually kept as separate platforms than scale-out systems. It is easier to design a new scale-out NAS system than to adapt an existing design and maintain the high-value features, although NetApp has shown that new technology can be introduced and adapted with its Clustered Data ONTAP systems.
A common approach to scale-out NAS is to take a distributed file system used in HPC and research environments. Considering the success vendors are having with their scale-out NAS offerings, it would seem to be inevitable that a majority of enterprise NAS systems will be multi-node, scale-out systems.
Vendors have several terms for scale-out NAS and scale-out storage in general. A look at some of the vendor product offering sees the terms clustered NAS, federated systems, and distributed systems. These are mostly vendor marketing aimed at creating a unique identification for their products. They are more likely to create confusion.
While scale-out block storage may be more difficult to implement because of the host interface connection and greater latency demands than NAS, the implementations provide the same value to IT customers. The measure is the number of nodes in the system and how the nodes are organized such as in pairs or an N+1 protection arrangement.
Scale-out NAS and scale-out storage in general is becoming prevalent because of the value. Vendors will continue to develop products that meet customer needs and more scale-out systems should be expected.
(Randy Kerns is Senior Strategist at Evaluator Group, an IT analyst firm).
Software-defined storage is gaining a lot of attention these days, especially after EMC revealed plans for ViPR at EMC World earlier this month. Now EMC rival NetApp is taking credit for being a “pioneer” of the technology long before anybody from EMC or any other storage vendor used the team.
During NetApp’s earnings call with analysts Tuesday, CEO Tom Georgens cited the storage virtualization capability of the Data Ontap operating system as a prime example of software-defined storage. NetApp V-Series gateways can virtualize storage arrays from other major vendors.
“NetApp pioneered this value proposition with our Data OnTap operating system,” Georgens said. “For the last decade, we’ve been able to run OnTap on our hardware and other people’s hardware through V-Series.”
“This concept has been coined software-defined storage … only NetApp can deliver on the promise of software-defined storage today,” he said.
NetApp representatives have been making similar claims since EMC announced its ViPR software-defined storage offering at EMC World earlier this month. Because the definition of software-defined storage varies according to who’s defining it, Georgens offered his definition: flexible storage resources that can be deployed on a wide range of hardware and provisioned and consumed based on policy directly by the application and development teams.”
Clustered OnTap, more than a decade in development after NetApp acquired clustered technology from Spinnaker, is part of NetApp’s software-defined storage story. Georgens said NetApp has almost 1,000 clustered customers.
Georgens also proclaimed NetApp a flash leader. He said NetApp has shipped 44 petabytes of flash in its arrays. However, its FlashRay all-flash array remains a roadmap item while others have had all-flash systems on the market for at least a year.
NetApp has two convince two sets of people that it is a technology innovator – customers and investors.
As cutomers go, NetApp’s revenue of $1.72 billion last quarter increased one percent from the same quarter last year and five percent over the previous quarter. That’s not bad, considering several large competitors said their sales slipped from last year, but not exactly a home run.
NetApp has struggled to keep investors happy. To make amends, NetApp announced a 900-person layoff, a quarterly dividend of 15 cents a share and a $1.6 billion increase in its stock repurchase program that brings the total to $3 billion. The moves came after a Bloomberg story claimed Elliott Management Corp. – which owns 16 million NetApp shares – called for NetApp to changes its board and take steps to boost shareholder value. One of Elliott’s concerns was that NetApp’s technology hasn’t kept up with its rivals.
That puts Georgens in the position of announcing layoffs while pledging to be a tech leader.
“Last week was a difficult one for employees,” he said of the layoffs. “We are faced with the challenge of continuing to execute against our growth strategy while achieving our business and financial objectives in the context of a low-growth IT spending environment.”
His juggling act will be interesting to watch in the coming months.
Brocade executives said they expect the Fibre Channel (FC) SAN slump to be temporary and predict a rebound in the second half of the year.
As Brocade announced earlier this month, its FC SAN switching last quarter was lower than its previous forecast. It came in at $319 million, down seven percent from last year and down 12 percent from the previous quarter. Brocade executives said on their earnings call last night the slowdown was due to lower than expected storage sales from its OEM partners, such as EMC, IBM and Dell.
“We were disappointed in our SAN sales due to short-term slowing in the storage market,” Brocade CEO Lloyd Carney said.
The SAN business doesn’t look much better this quarter, as Brocade expects it to decline from eight percent to 11 percent from last quarter. “Demand signals for storage remains soft,” Brocade CFO Dan Fairfax said.
Carney added that Brocade’s storage partners expect sales to rebound in the second half of the year, and the company remains optimistic about Fibre Channel.
“We fully believe at the end of the year, the SAN business will rebound,” he said.
Carney said Brocade plans to cut $100 million in spending over the next year, and some projects will be discontinued. But he said Brocade will remain focused on FC SANs, Ethernet networking and the emerging software-defined networking markets.
“We believe that the fundamentals of the SAN market are strong, including storage growth related to virtualization, cloud and unstructured data,” Carney said.
Jason Nolet, VP of Brocade’s data center networking group, said the factors favoring FC include the rise of flash in network storage.
“Flash needs a network that is a very low latency, very high IOPS, very high bandwidth, and Fibre Channel is the perfect match for that,” he said. “That’s why you see all the flash vendors, whether they are startups or established vendors, with Fibre Channel connectivity on their flash arrays. So we think the fundamentals in the storage industry and the basic requirements for customers continue to favor Fibre Channel. So we’re bullish for that reason.”
Nolet said he was certain that slow FC sales were not due to customers converting to converged Fibre Channel over Ethernet (FCoE) networks in place of FC.
“The customer base has largely spoken, and end-to-end convergence on a technology like FCoE is not on their agenda,” he said. “We see a little bit of convergence from the server to the first hop in the network, and then Fibre Channel gets broken out natively and Ethernet natively as well. But this [revenue decline] is not a function of FCoE growth.”
Brocade reported most of its SAN revenue last quarter came from 16-Gbps FC, which it has been selling for a year.
Nolet said Cisco’s recent rollout of 16-Gbps FC products underscores the importance of FC, but he dismissed the Cisco devices as “largely focused on speeds and feeds and lacking the innovation that we delivered” when Brocade first went to 16-gig.
Atlantis Computing closed a $20 million funding round this week, and will put a chunk of that money into bringing out a new storage management application for virtual infrastructures.
Atlantis’ previous funding round was $10 million in 2010. In the three years since, the company has had enough profitable quarters and made enough revenue from its Atlantis ILIO applications to survive, CEO Bernard Harguindeguy said.
“This round is about building up our cash reserves to build out our product line,” he said.
Atlantis claims it has more than 250 customers and more than 300,000 licenses sold for its software, which includes ILIO Diskless VDI, ILIO Persistent VDI and ILIO XenApp. The VDI products enable virtual desktops to run in-memory without storage, and the XenApp product does the same for virtual servers.
Atlantis has already announced but not yet delivered ILIO FlexCloud designed to enable applications to run in the cloud with little or no storage.
Harguindeguy said the next Atlantis application will do similar things for virtualized databases such as SQL Server and SharePoint. “They consume enormous amounts of storage,” he said. “We’re using the same foundation we have out there already.”
That product is expected in the fourth quarter of 2013.
New investor Adams Street Partners led Atlantis’ new funding round, with previous investors Cisco Systems, El Dorado Ventures and Partech International participating.