Business Tech

On the one hand, vendor analyst events are a good opportunity to spend focused time diving deep into individual products, roadmaps, and corporate initiatives. On the other, they're a useful forum for getting the feel of a company's overall zeitgeist in a way that narrower discussions don't. EMC's event, held last week in Franklin, Mass., was no exception.

(Credit: EMC)

Perhaps the single thing that struck me most about the event as a whole was the full integration of VMware into the discussion as a whole. I've been following both companies since before EMC acquired VMware in 2003. In the years since, although there were the obligatory nods to joint development work and "better together," VMware aggressively maintained a distance that was hardly limited to the 3,000 miles between VMware's Palo Alto, Calif., headquarters and EMC in Massachusetts. VMware's presence at EMC analyst events was largely relegated to a few off-hand mentions and perhaps a desultory breakout session given by a junior marketing person.

This year couldn't have been more different. VMware was very much woven into just about every discussion and one of VMware's senior technologists shared a panel with representatives from EMC and Cisco Systems. One thing that has changed, of course, is the ouster of VMware founder and CEO Diane Greene in 2008. It was Greene who most vocally kept EMC at arm's length. It's also the case that virtualization is increasingly at the center of everything that EMC does, so how could VMware not be an integral part?

This pervasive virtualization theme carried through to EMC VP Jon Peirce's discussion about EMC's internal IT infrastructure as well. EMC IT is using VMware to virtualize as much as possible. This includes doing database testing on a Cisco Unified Computing System (UCS) in advance of a planned migration off Sun E25000 UltraSPARC-based servers.

An initial Virtual Desktop Infrastructure (VDI) deployment also uses UCS in the form of a vBlock--a preconfigured package that combines products from Cisco, EMC, and VMware. EMC has about 200 users on VDI today and expects to roll out to several thousand next year starting in their Franklin facility. VDI and associated forms of desktop virtualization are a favorite technology of CEO Joe Tucci, who would like to move toward a platform-agnostic client strategy.

The ultimate goal is what sometimes goes by BYOPC (Bring Your Own PC), in which employees provide their own notebook computers, perhaps purchased with the help of a stipend. Even today, many of the EMC execs at the event were sporting Macs, even though IT doesn't officially support them.

Another hot topic at the event was multi-tier storage, in this case automatic storage tiering that intelligently moves data between Flash-based storage and conventional disk drives. EMC's technology here is called FAST and will roll out on Symmetrix V-Max arrays.

Flash drives can be much faster than SATA disks--or even high-performance Fibre Channel drives--but they're also much more expensive on a per-GB basis. The idea behind FAST is to automate the placement of data based on the way its accessed. For example, a database index that is frequently read and written to will migrate to high performance flash while older data that hasn't been touched for a while will move to slower, cheaper disks.

Disks being used to store rarely accessed archival data can even be deduped, compressed, and even spun down to reduce overall data center power consumption. Tape isn't part of this vision; Tucci opined that "Backup to and recovery from tape is dead."

The idea of storage tiering isn't new. Hierarchical storage management (HSM) has been around for well over a decade. However, in practice, it's mostly ended up being about moving old files to tape for archive purposes. (EMC itself has a product in this vein: Legato DiskXtended.) FAST is something more transparent and more dynamic.

There are analogs between FAST and the storage pooling that is part of Sun Microsystems' ZFS filesystem. EMC argues that the function belongs on the storage device rather than the server because the array is where data access from multiple systems and applications come together.

It's unsurprising that EMC wants storage to be at the center of things. This is a company, after all, whose tagline is "where information lives." It is, however, worth remembering that this is a different lens through which to view the world than system vendors tend to choose--and, for that matter, than VMware chose historically.

IBM on Monday is expected to unveil Blue Insight, a massive business analytics cloud that will hold more than a petabyte of data. This internal cloud computing environment will be the basis for future external services.

Internally, IBM's effort is dubbed Blue Insight, a business analytics cloud that will give 200,000 employees access to key corporate data around the world. Blue Insight will suck in data from 100 different data stores and warehouses. The data will then be dished out to salespeople and developers.

According to IBM, Blue Insight is a showcase of the "eat your own dog food" mantra. The system is built using Cognos, IBM's business intelligence software, and hardware systems such as System Z, the company's mainframe (right).

Going forward, IBM said it will add structured and unstructured data to Blue Insight. Some of this data will include revenue forecasts and sales quotas, product breakdowns, queries from real-time data and inventory levels and defects.

Read more of "IBM launches private business analytics cloud; Eyes 'easily consumable' BI for the masses" at ZDNet.

EMC Chief Executive Joe Tucci said Thursday that customers are "signaling more comfort spending their IT budgets." The company reported better-than-expected third-quarter results.

The storage giant reported earnings of $298.2 million, or 14 cents a share, down 24 percent from the same period a year ago. Revenue was $3.52 billion, down 5 percent from a year ago. Under a non-GAAP basis, EMC reported earnings of $480.3 million, or 23 cents a share, 2 cents better than Wall Street estimates.

Generally speaking, EMC has been well-positioned in the downturn because of a focus on storage, cloud computing, virtualization, and data centers--hot areas in enterprise IT.

Read more of "EMC: Customers have 'more comfort' about IT budgets" at ZDNet's Between the Lines.

There is a big disconnect between how long people think they should be storing data and how long they actual can. One group of vendors and academics is trying to change that.

Two years ago, the Storage Networking Industry Association's Data Management Forum reported the results of a landmark study that looked at the state of long-term storage, i.e. preserving a digital object for more than 10 years. Some disturbing results jumped out.

The study suggested that we live in a digital version of the Dark Ages. I'm talking about it now because I think the messages from the study are still very relevant to both IT administrators and consumers.

A whopping 80 percent of the 276 organizations included in the study reported a need to retain electronic records for more than 50 years, so let's start there. How many of you storage administrators out there actually think you can do 50 years of electronic records retention given current technology? Without data loss? OK, so you won't be doing the same job 50 years from now, so why care? Next question: How many of you think that you can do more than three migrations of archival data from one storage media to the next without data loss? According to the study, the answer was very few of you.

Here's one for consumers: How many of you using Internet photo services sites think that your digitized images will still be there 50 years from now? You haven't thought about that, right? You and your spouse take pictures of the newborn today, you store them online, and maybe you store them at home, too. Here's a suggestion: make sure to print them and preserve the prints for as long as you can because if the enterprise-level storage administrators who have been doing digital storage for decades have little confidence in their ability to do long-term digital preservation, you shouldn't have much confidence either.

So there's a big gap here. A group of concerned vendors and academic advisers have formed the 100 Year Archive Task Force under the auspices of the Storage Networking Industry Association's Data Management Forum wants to start filling the gap. You can follow their progress or become involved yourself here.

One more result from the study still has me puzzled. Slightly more than half of the 276 organizations surveyed reported the need for "permanent" storage. What might fall into the permanent category? I thought of the Founding Fathers writing the U.S. Constitution and wondered what that process would have been like if they were all using a collaborative work-flow tool like Microsoft SharePoint. For sure, they'd print out the final version for all to see--on parchment maybe? But what about all the draft versions and messaging back and forth--in short, all the supporting documentation that clue us in on their state of mind and tell us what they really intended? Would they have printed out all of that, too? I dare say that insight would be gone forever.

We rarely, if ever, think of saving our digitized thoughts for the sake of posterity. But for the sake of historians, lawmakers, sociologists, and scientists yet to be born, we should--or people centuries from now might look back on this as the digital version of the Dark Age centuries from now.

Hewlett-Packard announced Friday that it will acquire Ibrix, a maker of enterprise-scale file serving software.

Large companies running huge data-heavy applications often bump into bottlenecks with both storage and performance. HP says that Ibrix's software is designed to help such customers manage and store massive amounts of data, scaling to tens of petabytes. (A petabyte is 1,000 terabytes.)

HP wants Ibrix to help strengthen its share of the burgeoning market for high-performance enterprise data storage, cloud storage, and file archiving. HP says this segment is growing 20 percent a year, faster than the markets for network-attached storage (NAS) and external storage.

"Customers need highly scalable storage solutions that efficiently and cost-effectively manage massive amounts of information," said Jeff Hausman, vice president of Unified Storage in HP's StorageWorks division. "This acquisition expands our portfolio to better support the needs of this market segment."

Started in 2000, Ibrix is a privately held company in Massachusetts with 53 employees and more than 175 enterprise customers.

"Joining forces with HP is a natural fit for our customers, resulting in an enhanced storage solution that scales to meet their data growth," said Milan Shetti, chief executive officer of Ibrix. "The unique combination of Ibrix's file-serving solutions with HP's portfolio of products and services enables customers to lower the cost of scale-out architectures while easing the process of storing, accessing and moving critical data."

HP expects the deal to be completed in the next 30 days, after which Ibrix will become part of the StorageWorks division in HP's Technology Solutions Group.

The cost of the deal was not disclosed.

Much drama has ensued since NetApp announced the intended acquisition of Data Domain on May 20 for the whopping sum of $1.5 billion.

EMC countered with a $30-per-share offer valued at $1.8 billion. NetApp then raised its offer to $30 a share, valued at $1.9 billion. Data Domain essentially said, "Thank you, EMC, but we like the new NetApp offer more than yours." EMC then claimed that it had been unfairly shut out of the bidding process and appealed directly to Data Domain employees.

NetApp countered with a claim that EMC's potential acquisition of Data Domain would fail a federal regulatory review, a claim that EMC has rebutted as it considers shoveling more cash into the fire to make its proposal more attractive.

To its suitors, Data Domain is now reportedly worth $1.9 billion. To give you some perspective on that figure, Oracle recently agreed to acquire Sun Microsystems for $7.4 billion. A $1.9 billion acquisition would mean that Data Domain is now worth about 24 percent of that number, yet its 2008 revenues of $274 million are a tiny fraction of the $13 billion Sun took in sales revenue during 2008. Here's another relevant data point: EMC acquired VMware for a mere $635 million.

Deduplication is the storage world's new killer app. It's the great shrinking machine. Think of the old Steve Martin "let's get small" routine. It shrinks big data down to a small fraction of its original size--way more than is possible with the more common data compression routines. Why is that process now worth billions of dollars?

Most IT shops are moving away from using tape as their primary backup media in favor of disks. Deduping makes this migration economically viable by greatly reducing the backup data footprint on disk arrays by factor of 20 to 1, on average. You can't do that with tape. Nor can you get the input/output performance of disks from tape.

But that's not all that deduping does. It can be run against primary data storage streams to reduce the data footprint within expensive primary storage arrays. NetApp, among other vendors, supports this. Running it here may amount to the functional equivalent of buying another array, given the capacity that's saved as a result. When IT budgets are constrained, and storage is one of your top budget priorities, that's a big deal.

One can also dedupe archival storage, making the disk a repository for archival data that may need fast accessibility on a periodic basis--like when your corporate attorney needs to find exculpatory e-mails from three years ago and needs them yesterday.

So now everyone has to dedupe. Every major storage vendor, from EMC to Hewlett-Packard to IBM, now offers at least one dedupe option of the many that are now available, including the in-line and post-process variants. IBM, for example, offers four options.

In spite all its high-profile competition, Data Domain has been the acknowledged leader in integrating deduplication into the backup process. It offers disk-based deduplicated storage arrays for heterogeneous backup environments, and it leads all contenders in this space, in terms of market share, by a wide margin.

Does a leading position in a killer app justify a $1.9 billion valuation for a relatively unknown company mining a niche storage opportunity? Stay tuned. The executives at EMC and NetApp hate to lose, and EMC may yet win the heart of the fair maid named Data Domain.

The storage software industry has seen its first quarterly sales decline after more than five years of solid growth, according to a report from market researcher IDC.

First-quarter 2009 revenue for the industry sank 5.2 percent to $2.8 billion from the previous year. The slump has impacted several key vendors, including Hewlett-Packard, EMC, and IBM, all of which sell storage software to enterprise clients.

"The combination of the normally slow first quarter for most companies with the continued economic climate was displayed in this quarter's results," Michael Margossian, research analyst for storage software at IDC, said in a statement. "A majority of companies displayed either negative or very low year-over-year growth."

The software storage industry includes areas, or submarkets, such as data protection and recovery, archiving, data replication, and storage device management. Most of those segments were battered by the weak business climate.

"On a yearly basis, a majority of the sub-markets declined from the previous year's first quarter," Laura DuBois, IDC's research director for storage software, said in a statement. "Predominantly affected were the Device Management, Replication, and Infrastructure markets, all segments closely aligned with the storage systems themselves."

Among the top five players, HP was hit the worst with quarterly sales of $97 million, a 21.5 percent drop from $123 million the previous year. EMC watched its revenue fall 14.5 percent to $612 million, from $716 million a year earlier. Only Symantec eked out a small gain, with sales of $531 million, 2.5 percent higher than the year-ago quarter's $518 million.

The sales decline for the major companies has rippled through the entire software storage industry. But IDC expects the market to bounce back once the top five recuperate.

"The overall Storage Software market was pulled down by the underperforming large companies that make up a bulk of the submarkets," said DuBois. "Once they start to recover, they will bring the entire market up with them."

The software report follows IDC's accounting late last week on the first quarter's poor performance in the disk storage business.

NetApp said Wednesday that it will acquire Data Domain for $1.5 billion, or $25 a share.

Data Domain makes de-duplication storage systems designed to cut cost and make data management easier. NetApp said in a statement that its game plan is to take Data Domain's products and work it through NetApp's global sales channel. Data Domain's products will become a line in NetApp's operations.

Ultimately Data Domain and NetApp's VTL lineup is designed to move companies off tape backups. For 2008, Data Domain had revenue of $274 million, up from $123.6 million in 2007. Net income for 2008 was $21.6 million.

Here's where Data Domain fits into the enterprise:

Needless to say, Data Domain investors were jazzed about the deal in afterhours trading. The NetApp deal propelled Data Domain to the levels where it traded for much of 2008 before the meltdown.

Separately, NetApp reported fourth quarter earnings of $75 million, or 23 cents a share, on revenue of $880 million, which was down from $938 million a year ago. Excluding charges, NetApp reported earnings of $103 million, or 31 cents a share. Wall Street had been expecting earnings of 23 cents a share.

For fiscal 2009, NetApp reported net income of $87 million, or 26 cents a share, on revenue of $3.4 billion, up 3 percent from a year ago. Non-GAAP (generally accepted accounting principles) earnings were $364 million, or $1.09 a share.

NetApp refrained from providing first quarter revenue guidance due to the economy. It did project non-GAAP gross margins of 61 percent for fiscal 2010. In a statement, NetApp chief Dan Warmenhoven said the company has kept the lid on expenses and managed to raise operating margins for three quarters in a row.

NetApp, along with EMC, appear to be among the winners amid data center overhauls. By playing nice with various giants--Hewlett-Packard, IBM, Cisco, and Dell, to name a few--these independent storage vendors appear poised to tag along no matter what architecture ultimately wins.

AT&T is expanding its cloud-computing efforts with its new Synaptic Storage as a Service offering for enterprise customers, announced Monday. The service will let business users save and access their data via laptops, smartphones, and other Web-enabled devices.

With cloud-based storage, businesses can tap into their data as a service without having to set up their own equipment. They pay a monthly fee for storage as they use it. AT&T plans to offer the service on a limited basis starting this month, with its eye on a larger rollout to its U.S. Internet data centers by the third quarter. Eventually the company plans to offer the service at its data centers in other parts of the globe.

"The demand for data storage continues to grow at a staggering rate, driven by companies' need for 24x7 access to business critical data," Roman Pacewicz, senior vice president of strategy and application services, AT&T Business Solutions, said in a statement. "AT&T Synaptic Storage helps enterprises get a handle on these increasingly complex storage environments, while controlling costs and improving service levels."

Enterprise storage giant EMC will provide the technology for AT&T Synaptic Storage, though both companies have agreed to co-develop and market the service. EMC will employ its Atmos technology, which uses policy-based management to control the data. Offsite business users can connect to the cloud through virtual private networks for secure access.

The cloud service is part of AT&T's effort to dive into new growth markets. The company recently announced lower earnings and sales for the first quarter of 2009, though results were higher than expected thanks to strong performance in its wireless segment with booming business from Apple iPhone subscribers.