To make this case, they point to a recent survey conducted by Forrester Consulting and sponsored by Dell. That survey of around 800 IT leaders and storage administrators in the U.S. and Europe shows that most see value in buying storage, servers, networking and IT services from one vendor.
That’s not how it’s been working out, though. Recent storage revenue tracking reports from IDC and Gartner – as well as vendors’ earning reports -– show pure-play storage vendors EMC, NetApp and Hitachi Data Systems have gained market share at the expense of Dell, IBM and Hewlett-Packard (HP). Pure-play storage vendors say that’s because they innovate more than server and infrastructure vendors who dabble in storage.
Dell has built its storage business independent of servers, however, with the acquisitions of array vendors EqualLogic and Compellent plus storage software acquisitions. And Dell execs point out revenue from products with their storage IP have increased over the last year. Dell’s overall storage numbers are down because they reflect the loss of revenue generated by Dell’s discontinued OEM deal with EMC.
“There’s another story on Dell’s numbers,” said Travis Vigil, executive director for Dell storage. “PowerVault, EqualLogic and Compellent sales are increasing. With EqualLogic, we went from 4,000 customers to close to 50,000 customers [since 2008]. The Compellent business has also scaled quickly at Dell. When you look at Dell storage IP, we’re gaining share in the market.”
While developing its own storage, Dell is also integrating it with its server and networking technology in converged products. Today marked the general availability of the EqualLogic Blade Array previewed at Dell Storage Forum in June. The Blade Array packages EqualLogic iSCSI storage with PowerEdge blade servers and Force10 MXL switches in a 10U chassis.
Mike Quirin, IT manager for the SAN and VMware for Italy-based transportation company Ansaldo STS, said he tested the EqualLogic Blade Array and will likely purchase a few. Quirin, based in Ansaldo’s U.S. data center in Pittsburgh, Pa., said he uses EMC storage in the data center but finds the blades a good fit for systems sent out to customers with custom applications for monitoring and reporting.
He said the Blade Array lets customers quickly configure the converged system without any IT intervention.
“Most of the solutions we sent out to customers are blade solutions,” he said. “We had a chassis filled with eight blades and separate storage. With the Blade Array, we could send out a data center in a box without external cabling and hassles. I could get this up and running in 15 minutes without any instructions at all.”
Quirin agrees there are advantages to buying equipment from one vendor. He said he bought most of his EMC storage through Dell. “It makes it easier for us to not run around with too many different vendors,” he said.
The Forrester survey of 513 IT storage administrators and 284 CIOs, managers and directors, found that 54% of each group said they see “some value” and consider buying storage from the same vendor they buy servers and networking from. Thirty-four percent of the storage admins and 32% of the CIO group said they do it when possible, but only 9% of each group said they do it exclusively.
Other findings in the survey weren’t exactly shocking. Most IT leaders and storage admins find managing storage a complex task, they want technology that is automated and easier to use, and 48% said they could spend more time developing business strategy if managing storage didn’t take up so much time.
One noteworthy finding was that 85% said they would consider paying more for a storage system if it saves a considerable amount of work time.]]>
The shrinking tool Dell is using is partner RainStor’s database packaged with the Dell DX Object Storage platform. Dell will sell the combination under the Big Data Retention brand. The RainStor database is also certified to work with Dell’s EqualLogic and Compellent SANs, but the reseller deal is limited to DX for now.
The RainStor database, which can work as a standalone repository or as an analytics platform with Hadoop, has its own patented form of deduplication that Dell claims can provide an average data compression ratio of up to 40 to 1. The RainStor database dedupes data and writes a file to any type of storage, such as the DX Object Storage. Dell already owns deduplication technology it acquired via its Ocarina Network acquisition. The Ocarina deduplication has been built into the Dell DR4000 disk backup system and also is expected to be integrated into the Dell Fluid File system.
“We consider [RainStor's deduplication] to be a complementary technology to Ocarina,” said Amy Price, a manager at Dell’s Storage Data Management Group.
Big Data Retention Solution customers can add capacity from as small 2 TBs while scaling to petabytes and billions of objects without the need to manage LUNS and RAID groups that is part of tradiational storage.]]>
Dell first entered the bidding at $2.15 billion before Insight countered at $2.27 billion. Dell made another offer last week of $2.32 billion and increased that price before closing the deal. The bidding was reminiscent of Dell’s battle with Hewlett-Parckard (HP) for storage systems vendor 3PAR two years ago. HP won that battle, and paid $2.35 billion for 3PAR.
The shareholders of Dell and Quest must approve the deal, and Dell said it expects the transaction to close by the end of October.
Quest sells backup software for virtual and physical servers and replication in its data protection portfolio. It also has systems management, security and workspace management software. While Dell mentioned Quest’s data protection in its release, none of Quest’s data protection products were highlighted. Dell specifically cited Quest One Identity and Access Management, Foglight, Windows Server Management, and Database Management in the press release.
Quest’s major backup products include NetVault — acquired from BakBone Software last year — for physical servers and vRanger Pro for virtual machines. It also sells LiteSpeed data reduction software for Oracle and SQL database backups.
Dell will discuss the deal with press and analysts this morning. For more details, see our story on SearchDataBackup.com.]]>
Dell did not disclose the price, which obviously wasn’t close to what the vendor paid for EqualLogic ($1.4 billion) in 2007 or Compellent ($820 million) last year. Dell also acquired the IP of scalable NAS vendor Exanet and primary data reduction software specialist Ocarina in 2010.
In a blog explaining the deal, Dell storage GM Darren Thomas wrote that Dell acquired AppAssure to “help Dell customers modernize their data protection strategies …”
AppAssure’s Backup and Replication is application-aware with continuous data protection (CDP) technology that facilitates quick recovery of a file or an application. Thomas wrote that Dell will sell AppAssure as standalone software and eventually expand its IP into Dell storage products.
The software could help link Dell’s EqualLogic and Compellent SANs. Thomas pointed out that customers can use it to back up an EqualLogic array to a Compellent system and recover it from anywhere. We expect further connection between the platforms as Dell completes its integration of Exanet’s file system, Ocarina’s deduplication and compression, and AppAssure data protection with its storage arrays.
There had been a lot of speculation that Dell’s storage acquisition strategy would lead it to buy a backup vendor. CommVault, a close Dell partner, was often mentioned as a possible target. But CommVault would cost billions of dollars. Dell is attacking backup in a different way, integrating AppAssure’s technology with its hardware and using Ocarina software in a recently launched DR4000 disk backup appliance.
We’ll be watching to see how the acquisition affects Dell’s relationships with CommVault and Symantec. Dell resells both vendors’ backup software in bundles with its hardware. As a standalone company, AppAssure wasn’t considered much of a threat to Symantec or CommVault. But that could change now that AppAssure is part of Dell. AppAssure gives Dell its own data protection IP to go with its new dedupe backup appliance. Dell ended its long-time OEM relationship with EMC so it could make more money selling its own storage arrays. It looks like Dell will move in the same direction with backup.]]>
EMC president Pat Gelsinger said EMC had already moved on by the time Dell officially ended their storage partnership last week after a 10-year relationship.
Gelsinger said it was no secret that EMC’s partnership with Dell had to drastically change or end after Dell expanded its storage presence by acquiring EMC competitors EqualLogic and Compellent.
“It got to a natural point where the relationship had to be restructured or it had to come to an end. Unfortunately, it came to an end,” Gelsinger told a group of reporters last Thursday at EMC Forum 2011, held at Gillette Stadium in Foxborough, Mass.
Dell sold EMC’s Clariion, Celerra, Data Domain and VNX systems through OEM and reseller deals, with the bulk of the revenue generated from Clariion midrange SAN sales. Dell will also no longer manufacture EMC’s low-end Clariion.
Dell’s revenue sales for EMC’s channel have been sliding downward since last year, Gelsinger said. EMC reported Dell-generated revenue of $55 million in the fourth quarter of 2010, and that fell to under $40 million in the first quarter of this year. EMC has not given a figure for Dell revenue since then, but its executives said its non-Dell channel sales for the mid-tier increased 44% year-over-year in the third quarter of this year.
EMC has built up its channel this year, making the SMB VNXe product a channel-only offering that directly competes with Dell products. Earlier this month, EMC launched a channel-only Data Domain DD160 SMB system.
EMC has also continued to upgrade its VNX midrange platform. Last week it launched an all-flash model (VNX5500-F) as well as a high-bandwidth VNX5500 option with four extra 6 Gbps SAS ports, and support for 3 TB SAS drives throughout the VNX family.
“Now that we are no longer continuing forward [with Dell], we have to do it ourselves,” Gelsinger said. “It’s a clear, simple focus on our part.”
Dell began selling EMC storage in 2001, and in late 2008 the vendors said they were extending their OEM agreement through 2013. Dell also widened the deal in March 2010 by adding EMC Celerra NAS and Data Domain deduplication backup appliances to their OEM arrangement. However, the relationship had already started to deteriorate by then, going back to when Dell acquired EqualLogic in early 2008.
The rift became irreparable last year when Dell followed an unsuccessful bid for 3PAR by completing an $820 million acquisition of Compellent in December.]]>
The DX6000G SCN is an appliance based on the Dell PowerEdge R410 server that connects to its DX6000 object storage nodes. Dell director of DX product marketing Brandon Canaday said the compression appliance can reduce data by 90%, depending on file types. Although Ocarina technology can dedupe or compress files, the object storage appliance will only use compression. It has two modes — Fast Compression mode is optimized for performance and Best Compression mode is optimized for capacity reduction. Customers can choose one or both modes.
Canady said customers can set policies to use fast compression when data is first brought onto the storage system and then switch to the best compression after a pre-configured time period. The appliance uses different compression algorithms depending on file type.
“It’s like applying tiered intelligent compression,” Canady said. “Because we maintain metadata with the file inside of the storage device, we can employ algorithmic policies as part of the lifecycle management of content.”
List price for the DX6000G SCN will begin at about $25,000, depending on the amount of data ingested. The appliance will become generally available next week.
Dell plans to incorporate Ocarina’s compression and deduplication across its storage systems, with more reduction products expected early next year. Canady said the performance and compression modes will likely show up in all of the data reduction appliances.
“Each implementation is likely to be slightly different, but we see value in having a performance approach and a capacity approach,” he said.]]>
Financial analysts have speculated and even prodded Dell to acquire Brocade as it tries to move up into an enterprise class vendor instead of a PC and server specialist. There have been whispers for at least a year that Dell was considering Brocade, but it instead followed Hewlett-Packard’s lead in going just for Ethernet switching. HP also looked at Brocade before buying 3Comm in 2009.
Apparently, system/storage vendors prefer to own their Ethernet technology while getting FC connectivity from Brocade and Cisco. The move to Ethernet for Dell and HP is motivated at least in part by Ethernet switch market leader Cisco’s getting into the server business with its Unified Computing System (UCS).
Price may also have been a factor for Dell. It did not disclose how much it will pay for Force10, but it is believed to be around $600 million to $800 million while Brocade would command billions of dollars.
Passing on Brocade doesn’t mean Dell won’t buy another storage company, though. It has picked up EqualLogic, Exanet, Ocarina and Compellent since 2008, and Dell executives including Michael Dell see storage as a major part of the company’s future.]]>
Canacord Genuity financial analyst Paul Mansky raised the issue again today when he put out a report suggesting that Dell may be ready to drop as much as $5.5 billion on Brocade. Mansky wrote the acquisitions of EqualLogic, Compellent and Perot Systems gave Dell storage, servers and services but left it without the networking piece of the IT stack. Outside of some low-end Ethernet switches it develops, Dell gets most of its networking devices through OEM deals with Brocade and Juniper Networks.
Dell is looking to move from a PC-centric company to an enterprise player. “ … given [that] networking will most likely be among the most critical sources of intelligence helping to re-shape the horizontal/physical layers into a virtual/vertical stack, not owning this [networking] technology puts Dell at risk of simply hopping from one commoditized business into another,” Mansky wrote.
Mansky maintains Brocade is the right target for Dell because Juniper is mostly a service provider and that is not Dell’s business, while other alternatives such as Extreme Networks and Force 10 don’t have enough market share to be worthwhile. Brocade is also the only vendor among those to have a foothold in storage. “Brocade owns Fibre Channel (70% share), exceptionally tight support for which is a must (our view) in a converged world,” Mansky wrote. “Net, Fibre Channel is high ROI, legacy Ethernet is low investment and converged products (recently introduced) are the growth engine.”
Mansky believes Dell should act now as the PC market is expected to decline at a faster rate and Dell has $7 billion in cash. He said a price of $10 per share is possible for Brocade, bringing the deal to $5.5 billion.
There is a risk for any storage vendor that buys Brocade. Such a deal could prompt competitors to push sales of Cisco FC switches, taking away much of Brocade’s revenue. A year ago, that risk was less for Dell because its partner EMC could be counted on to continue to support Brocade as well as Cisco. But the EMC-Dell storage partnership has fallen apart and EMC is a close ally of Cisco. However, as Mansky pointed out, Cisco has angered IBM and Hewlett-Packard (as well as Dell) by getting into the server business. That makes those vendors more likely to stick with Brocade for its storage products, which make up most of its revenue.]]>
The $820 million Compellent acquisition gives Dell a second SAN product to go with its 2008 EqualLogic iSCSI SAN buy. Dell executives say the smaller 2010 acquisitions of Exanet and Ocarina will complement those SAN purchases.
Dell is close to completing the integration of Exanet’s clustered NAS file system with EqualLogic and entry level PowerVault storage. Those products will launch in mid-year, probably at the inaugural Dell Storage Forum conference in June. Later this year, they expect to add Ocarina’s content-aware compression and data deduplication into the Exanet file system.
Longer range plans – probably in 2012 — include integrating the Exanet file system with Compellent storage, developing dedupe for block storage, and coming up with a common management application for EqualLogic, Compellent and Exanet.
“Exanet and Ocarina will become ubiquitous technologies across the two platforms,” said Travis Vigil, Dell’s executive director of product marketing for enterprise storage. “We’ll have a file system that will provide unified storage for EqualLogic, PowerVault and Compellent. Once you get that common file system, we can take things that EqualLogic and Compellent have done with automated tiering and load balancing within the array and do that across the storage environment.”
Vigil admitted there is overlap between EqualLogic – which plays in the low to middle of the midrange – and Compellent, which sells into the middle and higher end of the midrange. The plan is to extend Compellent higher into the enterprise to fill some of the gap left when Hewlett-Packard outbid Dell for 3PAR last year. “If you don’t have overlap, you have a gap,” Vigil said.
Vigil said Dell will not sell the Ocarina Storage Optimizer dedupe appliances that Ocarina sold before the acquisition, but will support customers who bought the products.
Dell also will continue to OEM EMC Clariion SAN, Celerra NAS and the smaller Data Domain backup devices for the current lifecycle of those products, but Vigil said the “our focus is on Dell IP and the fluid data architecture.” Dell will resell but not OEM the EMC VNX unified storage systems that will eventually replace the Clariion and Celerra families.]]>
Dell first said it wanted to buy Compellent last December. Before that, it made two smaller 2010 acquisitions that could enhance its overall storage product line. It bought the IP of scale-out NAS vendor Exanet and acquired data reduction startup Ocarina Networks. Dell also tried to buy 3PAR but was outbid by Hewlett-Packard several months before it grabbed Compellent instead. In another storage move, Dell launched a DX object-based storage platform in 2010.
A Dell spokesman said the vendor will have more details about its overall storage strategy next month, but it appears that Compellent will bring Dell into its post-EMC era. Or as Dell executives like to say, its storage business has gone from being mostly a reseller of storage to becoming a full provider of storage technology.
Dell lists the Compellent Series 40 as its multiprotocol storage system for enterprise applications with EqualLogic as its scalable Ethernet storage and PowerVault as the entry level DAS and iSCSI SAN choice. Of course, EMC Clariion has filled the multiprotocol SAN role for Dell for close to a decade. Dell will not OEM and may not even resell the EMC VNX that will replace the Clariion, and definitely will not sell the EMC VNXe SMB system that competes with EqualLogic and PowerVault.
A slide attached to Dell executive Rob Williams’ blog posted yesterday lists Compellent as Dell’s high end block storage offering with EMC’s CX4 and the EqualLogic PS Series as midrange SAN products, and PowerVault as the entry level system. That’s odd positioning because Compellent has always been characterized as a midrange system – actually, more towards the lower end of the midrange.
Williams did shed some light on Dell’s storage strategy in his blog:
“Together with Dell EqualLogic, PowerVault and Compellent, our block and file storage offerings now span every layer from low- to mid-range offerings for SMBs and Public institutions to higher-end enterprise ready offerings for large corporations and organizations.
Last year, we also acquired two more storage assets that bring with them important IP. Exanet provides Dell with scale-out file storage capabilities, and moves us for the first time beyond the arena of mid-range block storage and into the playing field of mid-range file storage. We hope to launch our first Exanet NAS product early this summer. The second is Ocarina, which gives us content-aware file deduplication capabilities that we plan to add across our entire storage portfolio over time.”
There may be more to come. When they first spoke about buying Compellent in December, Dell executives said they may look to add data management features though an acquisition. All of this makes Dell worth watching through 2011.