There has been a ton of press coverage on the Nirvanix and IBM OEM partnership including an extremely enthusiastic article from Forbes. They kind of imply that IBM's deal with Nirvanix has driven up their stock to a 52 week high. That is really powerful if that is the case. Each of the myriad of articles pretty much say the same thing: this is a BIG deal.
Here is what the IBM OEM with Nirvanix means in the real world:
- IBM Global Services is a powerhouse and is certainly able to drive some enormous opportunities. It will be interesting to see some big wins based on this relationship. IBM could potentially change the whole cloud storage game based on their execution and go-to-market.
- Perhaps more importantly this relationship validates Nirvanix to large corporations, organizations and government entities that might have otherwise have been interested in the solution but hesitant because of their size.
- Not only does this help to validate Nirvanix but Cloud storage as well! Let's not forget there is still a great deal of uncertainty out in the market. Again, IBM GSS lessens Cloud FUD a great deal.
- IBM Global Services, a well-respected and extremely successful business most likely did intensive due diligence and this should accelerate the decision-making process for other companies looking at Nirvanix.
- Additionally, it raises Nirvanix above the crowd and gives them visibility to new markets and customers that weren't paying attention to them before.
The next day after the IBM announcement there was another one with Cerner, the large healthcare services provider. Cerner will provide cloud storage for the healthcare industry. This is also a big deal focusing on a very strong vertical industry with a major player. It perhaps was overshadowed a bit but in many ways is just as important. The amount of unstructured content is massive in the healthcare industry and having a focused partner to drive this market is critical to being a leader.
You can argue all you want with me but Nirvanix really has no viable compeitition. And you really should pay attention to storage companies that provide unique value (e.g. Data Domain, Isilon). Yes, there are "ish" competitors - solutions that sort of appear as competitive products but really aren't. The cloud services by Amazon, Microsoft and Google are not competitive. Nirvanix is focused on the Enterprise and these other services are essentially focused on individuals and not companies. In other words, a techno-geek will use Amazon S3 for some project or service but an Enterprise-class IT department isn't going to use it for storing their unstructured data long term. In addition to whatever technology pros and cons with different cloud offerings there is an extremely valuable and essential issue of building relationships with their vendors that is important to the Enterprise. They want people they can work with, negotiate services and terms, that understand issues in the data center, provide personalized service and influence the direction and vision of the solution. You are not going to get that with Amazon, et al.
The large storage vendors for all intents and purposes are absent from this market. And I mean all of them - Dell, EMC, HDS, HP, IBM Storage, NetApp and Oracle have nothing really to speak of. Interestingly, one of the next big things in storage is going to be cloud and none of them have anything real and at best something that is some level of being cloud-ish.
Why This Matters
Cloud storage will not replace the data center. However, it is an essential part of the overall services that every IT professional should be considering and planning on going forward. Unstructured data is growing at a far more rapid rate than any other data type and it will continue to do so. And the majority of this data is dormant and is consuming endless amounts of Tier 1 and Tier 2 storage on premises or at some co-location facility. The impact on capital and operational expenditures is extreme and will only get worse over time. The is an unsustainable situation that requires a resolution. Additionally, cloud storage offers a great platform for replicated and backup data as well. Furthermore, there is an opportunity for new businesses to emerge using cloud storage as its basis - this is already happening but we are at the tip of the iceberg. And Nirvanix is the only cloud storage vendor that is building true momentum for this market.
Here is a list of all of the articles on the Nirvanix and IBM deal if you want to check them out:
One of the first things I thought of when I heard the news about HDS acquiring BlueArc was that it reminded me of a guy that has been dating the same woman for years and years and everyone always asks him - "when are you going to propose to her"? And for years he would always answer - "what's the rush?" Interestingly, it sometimes takes another guy to come around and show interest before the first guy realizes that he is about to lose a really good thing. Rumor has it that IBM made the first offer on BlueArc and that drove HDS to finally "propose". And the rest of us are shaking our head saying "it is about time".
You have to understand that file storage is growing far greater than block and there are only a finite number of players that have any credible solutions . NetApp is the king. EMC just become a lot more interesting with Isilon. And if NetApp is the king then Microsoft is the pope. And everybody else kind of sucks in terms of revenue and footprint.
BlueArc has a great file system and competitive NAS solution but their biggest challenge is having the resources to scale their business. HDS provides additional resources to make this happen. Additionally, HDS has been focusing on SAN storage primarily and adding the BlueArc folks gives them the best independent team in the NAS world.
So think about what I said earlier. File storage growth is eclipsing all other storage types. And there are fundamentally only three players. HDS just made a move that could make them the fourth player. BlueArc is an Enterprise-class NAS solution and that is who HDS sells to. What does IBM do now? HP? Oracle? Dell? They have no real answer to fastest growing segment in storage. HP, IBM and Dell all have file system solutions but none of them can address Tier 1 NAS.
Interestingly, from a bevy of vendors and startups only three NAS players have really been successful including NetApp, Isilon and BlueArc. And arguably only NetApp has been able to do it all on their own. Compare this to the massive number of SAN-based storage system vendors that have achieved amazing success. And yet, file storage is experiencing massive growth and will continue to do so for the foreseeable future.
This is the biggest acquisition by HDS and they have yet to prove they know how to leverage their resources including sales, marketing, operations and engineering to create a meaningful accelerated trajectory for BlueArc especially when compared to Dell with EqualLogic, EMC with Data Domain (and others) or even HP with LeftHand. And since HDS has OEMed BlueArc for several years, will owning the company change the dynamics in any substantive way? Hopefully HDS has an integration plan that will make this a home run for them. I think this is a smart and overdue move for HDS but you know what I'm saying.
I think Mike Gustafson did a great job and the purported $600 million acquisition price is a big win. BlueArc has a great file system and their solution is arguably the only Enterprise-class NAS, based on its scalability and performance. They really were the last man standing in the NAS marketplace and HDS did the right thing by finally becoming betrothed.
I have been pounding the drum on dedupe in primary storage for a very long time and I am surprised that the market hasn’t acted more quickly. This capability is even easier to quantify than snapshots and thin provisioning and yet it’s adoption has been slow.
The reasons for implementing primary dedupe is as clear as day. Data growth is ridiculous and never ending. The math is simple to grasp:
• Primary storage is growing at a CAGR of 60%.
• If you have 10 TB of data today that means you will have 16 TB next year at this time.
• In five years this will turn into 104 TB.
• If you have 100 TB of data today you will have 1.04 PB in five years.
• And since most storage systems have about 40% capacity utilization then you are talking about 250 TB of capacity to store 100 TB of data and 2.5 PB of capacity to store 1 PB of actual data.
Let us do the dedupe math:
• If you just get a 4-to-1 ratio then 10 TB of data is reduced to 2.5 TB of data.
• Based on a 60% CAGR in one year you will have 4 TB and in five years it will be about 26 TB. Compare that to 104 TB in five years!
• If you get a 10-to-1 ratio then you will only have about 10 TB in five years versus 104 TB! That is a magnitude in the difference of actual data being stored. And those dedupe ratios are achievable in virtualized environments.
I know it sounds too good to be true but even with a modest dedupe ratio the economics are simple to quantify and justify.
The strange thing is that we really don’t have wide adoption of primary dedupe. It is a no-brainer technology that very few storage vendors have actually implemented. NetApp has a distinct advantage over other storage vendors and is actually winning business because of their dedupe technology. To be candid, NetApp dedupe does have a number of limitations and yet none of their major competitors have stepped up to answer the call.
There are signs that other storage vendors are stepping up. Dell acquired Ocarina and IBM bought StorWize. Additionally, Permabit is a vendor that has primary dedupe technology and there are a number of vendors they are working with. I predict they will be acquired shortly and that will leave every other storage vendor out in the cold. However, none of these technologies have made their way into the market yet. A startup called Nimble Storage is growing like crazy and while they don’t actually have dedupe they do have in-line data compression and even with that they have measurable cost per GB advantage over their competition. Data compression is good. Dedupe is better. And data compression combined with dedupe is the best.
I could be cynical and conclude that storage vendors don’t want to implement primary dedupe because it would cost them money. But I doubt that is the case because it is inevitable and it already is costing them money since they are losing business over it every day. I think it the reason is primary dedupe is really hard to implement. Therefore the vendor that does it best will have a clear advantage over all of the others.
NetApp gained leadership for many years in great part because of their snapshot technology. 3PAR was acquired for an unprecedented price in great part because of their thin provisioning technology. The jury is still out on which storage vendor will be the primary dedupe leader but whoever it is will inevitably experience great success. And it will change the industry for the better.
Nirvanix - the Enterprise Cloud Storage company has a new management team led by CEO, Scott Genereux. Interestingly, Scott spent much of his career selling storage systems to Enterprise customers. I think that is an important distinction since Nirvanix refers to itself as Enterprise Cloud Storage. It requires someone who understands the challenges of the Enterprise versus someone that is an expert at selling web services. Steve Zivanic is the new VP of Marketing and he worked shoulder-to-shoulder with Scott when they were at Hitachi Data Systems together. This team knows how to sell and market even when they are up against a powerhouse like EMC.
True to form, Steve Zivanic has been on a passionate campaign to get the word out about Nivanix. There are a wave of articles and blogs about how great they are doing all over the web. You can go to the Nirvanix website (www.Nirvanix.com) to see they have 700 customers – some of which are big, big companies storing lots and lots of data. That is all good stuff but you have a number of sources to read about that information. Here is my take on what are some of the coolest and most valuable things about Nirvanix:
1. They have end-to-end solution that makes it extremely easy for companies and organizations to use Cloud Storage. Nirvanix provides an easy to manage complete solution with front-end usability, security, reliability, performance, multi-tenancy and global access combined with back-end controls, reporting, management and analytics. It isn’t just a storage system that scales and supports HTTP – which so many other vendors tout as their Cloud Platform. Rather, Nirvanix provides a holistic solution designed specifically for businesses to utilize without being cloud experts. This unique and what I believe the market really needs to deploy Cloud Storage for the Enterprise.
2. You can utilize the Nirvanix public cloud storage or you can take their software and actually implement your own private cloud storage service. There are a number of large companies and organizations that want to enable their own private clouds and this meets that need. Nirvanix is also a great solution for managed service providers and this could be a whole new channel for them. The world will be divided in three ways - private cloud storage usage; a hybrid of public and private cloud storage usage; and pure public storage cloud usage. Nirvanix supports all three models.
3. What is also very powerful is Nirvanix can be integrated with heterogeneous file systems. Essentially it can work with third-party storage systems – which is great for users that want to use existing storage. It is also great for storage vendors – they can partner with Nirvanix and still use their own storage systems. Nirvanix does have its own storage technology but their real value is in the Cloud Storage application – the web services that live above the storage.
4. Nirvanix is field proven. They have been in the market for a number of years and those 700 plus customers are evidence that it works. This minimizes the risk that every IT professional needs to consider when making a decision to go forward with emerging technologies like Cloud Storage.
Another trend in Cloud Storage for the Enterprise is using open source file systems to build your own. The more technology minded IT professionals working for large organizations are considering Hadoop and Gluster and other extensible, scalable file systems. These companies could leverage Nirvanix instead of building the services, tools and overall applications needed to implement Cloud Storage.
Cloud Storage is a next generation IT infrastructure that is already changing the landscape. This will continue to happen in obvious and non-obvious ways. The obvious ways include using cloud storage for backup, DR and archiving. The non-obvious ways include new business models and applications being developed specifically for the cloud.
Nirvanix is on the curve up and will only get stronger over time. They have new leadership in place and a board and investors that are charged up and passionate.
Since there is a climate of acquisition one can only assume that Nirvanix should be of real interest to a number of different major IT vendors. Anyone that is going against EMC should consider partnering with Nirvanix since it can take on Atmos both from a public and private cloud perspective. What should be of concern to the various “big guys” is when Nirvanix gets bought out it will be a two horse race in a market that is inevitable and massive.