HDS grew disk storage revenue by 11% year-over-year during the first quarter of 2012, according to IDC. That’s a bit slower than EMC (14.4%) and NetApp (11.1%), but much faster than IBM, Hewlett-Packard and Dell. HDS made great progress with NAS and enterprise SAN sales – two categories with slow or no growth. IDC said industry-wide NAS sales declined 1.9% during the first quarter, but HDS claims it increased NAS sales by more than 50%. And HDS high-end SAN sales grew more than 30% despite flat growth industry-wide for storage systems costing $250,000 or more.

HDS remains fifth in overall storage disk sales, but is gaining on No. 3 IBM and No. 4 HP.

Asim Zaheer, SVP of marketing for HDS, attributes the NAS spike to Hitachi’s acquisition of its long-time OEM partner BlueArc last September. HDS sold BlueArc NAS systems since 2006, but Zaheer said sales jumped after the $600 million acquisition. He said customers were looking for that commitment from HDS, especially after BlueArc indicated it might become a public company.

“Our belief is there was pent-up demand out there with potential new accounts relative to our long-term commitment to the technology,” he said. “They were waiting for a signal from us. BlueArc was discussing an IPO, but we took that concern off the table.”

The Virtual Storage Platform (VSP) enterprise SAN is Hitachi’s flagship product, and HDS picked up market share from EMC and IBM in that category. HDS likely benefitted from EMC’s transition to a new Symmetrix VMAX, but Zaheer said the VSP’s storage virtualization features also helped. “There’s quite an increase in customers virtualizing third-party arrays because of concern about budgets,” he said.

Zaheer said the hard drive shortage didn’t hurt HDS much. While it raised prices just as all its major competitors did, Zaheer said HDS shipped all of its orders in the first quarter. “We felt it, but we did not have to stop or delay shipment on anything,” he said. “I don’t know if we’re out of the woods yet, but our supply appears to be back to almost normal levels.”

HDS is less bullish on flash than its competitors, particularly EMC. So far, HDS’ flash offerings consist of the option to add solid-state drives (SSDs) to arrays. “The market is there, but it’s not exploding to the levels that EMC and others have predicted,” Zaheer said. “You have to have the right use cases and the economics have to make sense. If customers feel they need SSDs in their arrays, we can do that. It’s growing, but not like the hockey stick that everyone thought.”

Still, Zaheer said HDS is planning other flash products, such as all-SSD arrays and server-side flash, in anticipation that demand will grow. “You’ll see some announcements soon,” he said.

Not surprisingly, EMC claims its virtualization features go beyond those of Hitachi’s, and HDS claims EMC is off base with those claims.

Brian Gallagher, EMC president of enterprise storage, made the case for EMC’s virtualization Monday during the opening of EMC World.

“We’ve extended Symmetrix’s data integrity to non-EMC devices. Hitachi does not do that,” Gallagher said. “Also, our technology is free of charge. You can virtualize any amount of non-EMC storage behind Symmetrix. Hitachi gives you a certain amount of terabytes for free, and then they charge when you go beyond that. Hitachi will also tell you not to use virtualization for databases, we don’t say that. We also extend FAST to other arrays. They [Hitachi] don’t extend auto tiering [to VSP].”

Claus Mikkelsen, chief scientist at HDS, disputed EMC’s points in an e-mail to Storage Soup. He said the HDS VSP supports “full inheritance” on externally virtualized storage devices from HDS or other vendors.

As for EMC’s free claim, Mikkelsen said “EMC states that software license enablement of FTS is a no-charge feature to customers, but fails to mention the future impact on software maintenance costs for the FTS license and any other EMC software license that charges maintenance based on installed capacity. With the Switch It On program from HDS, virtualization is free and third-party capacity is deeply discounted.”

Mikkelsen said HDS offers “prudent” advice on using virtualization with databases.

“We state that that Hitachi Dynamic Tiering on VSP will intelligently place data pages based on an application’s I/O access pattern,” he said. “Additionally, we recommend that customers do not immediately place OLTP database environments with high I/O transaction rates and low average response time requirements as externally virtualized storage. This is prudent advice that any intelligent storage vendor would recommend.”

Finally, Mikkelson said HDS’ technology does extend its Dynamic Tiering to third-party virtualized arrays.

EMC’s FTS will require time for users to kick the tires before it can be accurately judged, but the virtualization features are welcome additions.

“This is at least a step down the path to VSP-style virtualization,” said Ray Lucchesi, president of Silverton Consulting.

You can expect more steps – and more spats with HDS – before EMC’s array virtualization story is finished.

Hitachi Nondisruptive Migration moves data from HDS’ older Universal Storage Platform (USP) to the VSP. The target array spoofs the host operating system so it thinks it’s talking to the original system even as data is moved to the target. That allows applications to continue running during migration.

Patrick Allaire, an HDS senior product marketing manager, said this capability is based on three components:  a new persistent virtual Logical Device Identity (LDEV ID) that is used to manage multiple hosts, a logical identity takeover function, and Hitachi’s Universal Volume Manager (UVM).

The virtual LDEV ID is embedded in the SCSI layer of the Fibre Channel protocol. A virtual LDEV ID  is created and mapped from the source to the target, then the takeover function spoofs the operating system.  Finally, the Hitachi UVM copies or migrates the volume from the source to the VSP target.

Typically, a physical LDEV ID is used for this process but it makes it more manually intensive. “If you don’t have a virtual persistent ID, it forces you to do a shutdown of the application when changing the data path from the old storage system to the new one,” Allaire said.

With the new virtual LDEV ID and takeover function, Hitachi claims to maintain the quality of service levels for applications. Hitachi now supports host clustering configurations by synchronizing persistent group reserves on source volumes and keeping the host cluster operational. It also supports parallel migration of up to eight source systems to one Hitachi VSP.

Hitachi Data Systems is putting technology from its BlueArc and Parascale acquisitions to work in its private storage cloud and Big Data plans.

HDS today upgraded its Cloud Service for Private File Tiering, and rolled out its Cloud Service for File Serving and Cloud Service for Microsoft SharePoint Archiving as part of its infrastructure cloud strategy.

HDS also outlined its vision for its infrastructure, content and information clouds. BlueArc’s NAS products will provide file storage capabilities in the infrastructure and content clouds while Parascale Cloud Storage (PCS) fits into the content and information clouds.

HDS acquired Parascale for an undisclosed price in August 2010 and bought its long-time NAS OEM partner BlueArc for $600 million last month.

HDS’ strategy is to make its content cloud a single platform for data indexing, search and discovery.

HDS rolled out its Private File Tiering service in June 2010 for tiering data from a NetApp filer to the Hitachi Content Platform (HCP). Now it adds HCP support for EMC NAS. The file service and SharePoint cloud services let users share files and SharePoint from different geographic locations over a LAN, WAN or MAN. These services require a Hitachi Data Ingestor (HDI) caching device in remote sites or branches to tier data to a central location that houses the HCP.

Tanya Loughlin, HDS’ manager of cloud product marketing, said these services already exist but now HDS is packaging them as a cloud that it will manage for customers. The cloud services include a management portal to access billing, payment and chargeback information.

“It’s a private cloud service,” Loughlin said “Customers don’t have to pay for hardware. They pay on a per-gigabyte basis. This is a way to augment staff and push some of the less-used data to us. We’ll manage it.”

Pricing is not available yet. “We are finalizing that now,” she said. “The products that fit into these services are already priced, so this is a bundling exercise now.”

HDS plans to tackle Big Data through its information cloud strategy by integrating analytics tools and processes into PCS. PCS aggregates Linux servers into one virtual storage appliance for structured and unstructured data. Loughlin said HDS will also use Parascale, BlueArc NAS and the HDS Virtual Storage Platform (VSP) SAN array to connect data sets and identify patterns for business intelligence in the health, life sciences and energy research fields.

HDS chief strategist for file and content services Miki Sandorfi announced the acquisition in his Thursday blog about Hitachi’s cloud strategy. Sandorfi wrote that HDS acquired Parscale’s IP and hired the core engineering team.

“By complementing our existing product set and leveraging the distinct capabilities of this acquisition, we will continue to bring to market additional Hitachi Cloud Services that leverage best-of-breed technology and are deployed in ‘cloudy’ ways,” Sandorfi wrote.

Parascale already had two generations of its ParaScale Cloud Storage (PCS) clustered NAS product in the market, but it’s unclear if HDS is more interested in Parascale’s existing product or its engineering experties. HDS already has a Private File Tiering cloud service aimed at customers with their own NAS systems who want to archive data off primary storage, and now you can expect them to add clustered NAS to its cloud services in some capaicty.

HDS doesn’t spend much on acquisitions, but the money it has laid out has ended up in the cloud. HDS acquired Archivas in 2007, turning the Archivas object-based storage technology into the Hitachi Content Platform that its cloud services are built on.