Transitioning From The Enterprise To The Cloud

By Juergen Urbanski

Our Summer poll among enterprise storage customers suggests that appetite for experimentation with innovative technologies is low in the current environment.

Key themes emerging from our in-depth survey of 60 enterprises include:

• Cutting cost today: Customers are concentrating storage spend on a smaller number of leading OEMs (e.g., EMC, IBM, HP, DELL, NetApp, SUN), who may not always be the lowest cost providers, presumably in the hope of wringing volume discounts out of their established vendors and avoiding the complexity and management overhead that can come with more heterogeneous environments. In a notable departure from past practice, they push storage vendors to quote software separately from hardware. Many consider price per GB a top criterion for new purchases, a slightly short-sighted view perhaps that neglects lifetime TCO per GB. Customers are rolling out storage efficiency technologies as fast as they can. The motivation for this move though is to push back additional capex as long as possible, rather than keep more data around for longer. (more…)

By Juergen Urbanski

This post originally appeared on GigaOm here.

Data Domain today finally agreed to be acquired by EMC for $33.50 per share, triggering payment of a $57 million break-up fee to NetApp. For EMC the buy is very much about “keeping your friends close but your enemies closer.”

Storage efficiency (notably de-duplication) is the enemy of a business model predicated on pushing more disk capacity out the door year after year (GigaOM Pro note, sub required), which is why customers we spoke to would have preferred to see such a disruptive technology remain in the hands of an independent vendor. And where, exactly, does this leave NetApp?

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By Juergen Urbanski

The storage industry is at the cusp of the biggest structural change since networked storage began to eat into direct-attached storage a decade ago. Several major technology shifts will radically re-define the profit pools in the industry, leading to slimmer margins for all but the most innovative, software-driven players. The big picture idea is analogous to the transition from mainframes to client/server in the world of computing.

The economics of private and public cloud computing will break some of the barriers between servers, storage and networking. Server vendors, notably DELL and HP via their recent acquisitions, are chasing after the higher margin pools available in the storage market. Meanwhile, storage vendors have to embrace storage efficiency and virtualization to survive, yet their underlying product architectures are – in most cases – not well suited to a virtual environment, creating an opportunities for a host of startups built around the idea of smart storage software that is detached from but leverages abundant pools of cheap storage hardware. That software may or may not be provided by the storage array vendor, and will very likely work on storage arrays from different vendors. The current recession provides the ultimate ‘why now’ for CIOs to embrace new ways of thinking about how storage fits into the virtualized data center.

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By George Gilbert

Our most recent report illustrates how server virtualization will disrupt the storage, database, and middleware markets while creating large new opportunities in business continuity and cloud computing which VMWare is well positioned to exploit.

Based on feedback by 200 IT customers on vendors VMWare, Citrix, Microsoft, Oracle, IBM, Symantec, CA, BMC, NetApp, EMC, DELL, and HP, the report concludes:

Private cloud computing is the largest new profit pool in the virtualized data center.

Virtualization will transform IT investment from a fixed capital expenditure to a variable operating expense, delivering 10x greater IT staff productivity in the process. Cloud technologies in the enterprise, growing out of virtualization and service-oriented management, transform disparate applications and infrastructure into services that are delivered on-demand. VMWare will face greater than expected competition from Microsoft and is turning towards systems management vendors such as BMC and CA for partnerships.

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By George Gilbert

This is our first set of hypotheses about how virtualization is impacting each of the layers of the IT stack. We will elaborate and refine them as we continue to collect insights from vendors and our upcoming survey of IT decision makers.

The Ultimate Objective

· It’s more than just the savings from server consolidation and more than just greater flexibility in managing planned (VMotion) and unplanned downtime (disaster recovery, high availability)

· Ultimately, it’s about automating the data center in order to make it easier for companies to deliver online business and consumer services. The iconic example of an online service that complemented a traditional business was the Sabre travel reservation system born in the ‘60s. It was based on purpose-built infrastructure that required intense collaboration between the customer, American Airlines, and the vendor, IBM. More recent examples include Fedex package tracking or the familiar dot.com services from Amazon, eBay, and Google. In order to make it easier for businesses to build or assemble end to end services from existing assets, technology vendors have to convert “assets” into “pools of services” using virtualization at every layer of the IT stack.

Looking at the IT Stack Layer by Layer

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