First Impressions of EMC World

EMC World, EMC’s core annual conference is this week in Las Vegas and there are a number of very core things to watch out for. EMC’s presence in the enterprise space is legendary. However the enterprise space is gaining momentum in the enterprise IT evolution. The question is: Is EMC in a position to support these changes and continue to provide the leadership they’re known for. Bottom line: Companies are moving to the cloud. On the surface, this could present disaster for EMC. Key will be EMC’s ability to shift and help customers embrace the cloud.

Importance of Storage

Storage has grown up. No longer are the days where storage is just a place to store data and files. Storage is now key to the success of any given application. EMC clearly understands this and needs to evolve to this change. This is new! But it provides a radical shift in opportunity for companies like EMC. Look for EMC to make the connection between applications and storage.

Partnerships & Ecosystem Development

EMC provides leadership to enables IT to provide greater business value. The key is to evolve quickly and provide solutions that are needed both today and moving forward.

One could argue that no one company can (or should) be everything to everyone. Even very large enterprise providers such as EMC, need to embrace this shift. One example of EMC’s recent shift is their partnership with SAP. Frankly, this is a great sign of maturity on the part of EMC. Similarly, HP recently started providing their ‘Shark’ solutions for SAP’s HANA. Look for EMC to embrace this relationship and look to other key relationships between EMC and key enterprise players.

Open Source Software Integration

It is clear that open source software (like OpenStack) is changing the way enterprise solutions are built and consumed within a completely new economic model. The more mature enterprise-class providers will acknowledge this shift and embrace it. Look for EMC to provide greater integration with open source solutions.

Enterprise to Service Provider Shifts

Historically, enterprise-class providers create solutions specifically for enterprises…not service providers. Service provider requirements are quite different from that of their enterprise counterparts. At the same time, the shift in demand from enterprise to service provider happens over time, not all at once. Look for EMC to acknowledge this shift in terms of integration between solutions and changes in their management tools. The impact of general-purpose storage solutions also changes the paradigm for EMC. EMC needs to demonstrate value beyond the underlying physical hardware.

The VMware and Pivotal Impact

A constant question for EMC is how VMware and Pivotal play a role in EMC’s future. Both companies provide solutions that support the evolving changes within the enterprise. But potentially create a loggerhead for openness. Can EMC embrace the changes and innovation from both VMware and Pivotal, but still maintain flexibility in their open approach to alternative solutions? Look for indications of this through their partnerships and reference architectures.

Timing is Everything

EMC provides core storage solutions for key enterprise applications. In many ways, these are the very applications that are both sensitive to enterprises and harder to move. In both cases, this translates to risk. Enterprise customers have been hesitant to make the shift from traditional storage solutions to alternative approaches. That attitude is changing. Change is no longer an option it is a requirement. How is EMC taking a leadership role to help existing enterprise customers make this shift? Look for EMC to provide examples of flexibility beyond the traditional enterprise constraints.

In Summary

This year, more than any in the past, is a watershed year for EMC. This year, the stars are aligning where customers are open for change, looking for help and ready to get started. The traditional enterprise sacred cows are up for grab. Now is the time for EMC to demonstrate how they can make this shift and continue to provide leadership to the enterprise customer.

The Cloud Storage Wars Heat Up

While the cloud storage wars have simmered between Box and Dropbox for sometime, someone just poured gas on the fire. And that someone is Microsoft. With today’s announcement, Microsoft has just put Box and Dropbox in their crosshairs.

The competition becomes particularly interesting as Box and Dropbox are both planning a public offering. At the same time, potential investors are questioning the sustainability of a standalone cloud storage business.

Today’s announcement increases Microsoft’s cloud storage offering (OneDrive) from 25GB per user to 1TB per user. This brings it on par with the business offerings of Box and Dropbox. At 25GB per user, the amount of storage available was interesting, but could lead to challenges for the largest consumers of storage in an average enterprise.

Comparison of Cloud Storage for Business

Company Storage Price
Microsoft 1TB $5/user/month*
Box 1TB $15/user/month
Dropbox Unlimited $15/user/month

* Microsoft OneDrive for Business is also included in Office 365 plans as low as $5-8/user/month

Data as of 4/29/2014

 

The Enterprise Effect

As more business customers move to cloud-based services, email becomes an early target. Exchange and Windows are still the standard for most companies today. This installed base has a huge effect on the potential outcome. Switching to alternative platforms can present a challenge on top of all other challenges an IT organization faces.

The Holistic Approach

While Microsoft’s solution is fairly closed and Microsoft-centric, this is not much different from what enterprises have faced for some time. In some ways, if an enterprise could ‘forklift’ their entire operation to a holistic solution for fundamental services (ie: Email, Storage, etc), that could present an attractive solution.

But that’s not the entire story. Companies today are looking to break the reigns of constrictive, closed ecosystems. That’s where Box and Dropbox excel beyond that of Microsoft. In any case, both Box and Dropbox will need to respond appropriately. The real opportunity for these companies is well beyond that of file storage.

For customers, the question of which solution to use comes down to your individual situation and which approach makes more sense both short-term and long-term.

Further Reading:

Microsoft Targets Box, Dropbox

http://blogs.wsj.com/digits/2014/04/28/microsoft-targets-box-dropbox/

Microsoft Blog: Thinking outside the box

http://blogs.office.com/2014/04/28/thinking-outside-the-box/

Box Blog: An Open Microsoft

http://blog.box.com/2014/04/an-open-microsoft/

4 Reasons Cloud Storage is Not a Bubble About to Pop

With the recent S-1 filing by Box for their Initial Public Offering (IPO) the question of a Cloud Storage Bubble is raised once again. But is it really a bubble? And should enterprise customers take note and run for the hills? There is more at stake than what appears on the surface.

Box Files Form S-1 IPO

By Box filing their S-1, their financials are put on display for all to scrutinize. Within those figures, we learn that their 34k+ paying customers contribute $124m in revenue that offsets operational costs to the tune of a $169m loss last fiscal year. Over the past four years of reporting, Box reported an increase in the loss trend. But is this enough to consider impending doom?

Cloud Storage Startup Landscape

In 2013, Nirvanix (another cloud storage startup) closed up shop and sent their customers scrambling. Dropbox is another of the closest competitors to Box and announced their intent to IPO as well. Could Box and Dropbox be following in Nirvanix’ footsteps? Enterprise storage is expensive. Yes, there are economies of scale and tricks you can play to maximize the efficiency, but storage infrastructure is expensive.

So, let’s take a look at some potential hypothesis on what may be occurring:

Hypothesis One: There is a minimum amount of capital required to achieve profitability.

Nirvanix only took on $70m while Box and Dropbox took on $414m and $607m respectively. Consider that enterprises need stability in their cloud storage provider, a substantial number of enterprise features (ie: auth, security) and a solid ecosystem for integration. It is probable that $70m is not enough to reach ‘escape velocity’ in this space. It is possible that $400-600m may not be enough either. It is also likely that scale plays a significant role too. It will be interesting to see Dropbox’ figures when they file their S-1.

Hypothesis Two: The real value for cloud storage is not in unstructured file storage.

Sure, the ability to store, share and collaborate on files online is valuable. However, is there greater value in the meta-data that comes from understanding the behaviors of those files? Plus, similar to the problem email systems and enterprise storage vendors addressed years ago with data de-duplication, there is value to managing files at scale. Not to mention that the meta-data around that data could be repurposed for other functions.

Hypothesis Three: Unstructured file storage is simply a loss leader.

There are many directions a company like Box or Dropbox could take based on their current service offerings. Of course there are many directions this could take, but that is for a future discussion.

Hypothesis Four: The shifting enterprise storage paradigm will not allow cloud storage failure.

It is simple enough to treat all storage the same, but in reality it is not that easy. Traditional methods for storing files on internal storage sub-systems is cumbersome at best when we move into a SMAC (social, mobile, analytics, cloud) based world. Enterprises are already shifting toward cloud-based storage to alleviate the pressure and shift their paradigm. The thought of having to move back to traditional methods would break many apps and services. In the end, enterprises really need to move forward and are not able to go back.

Consider the Options

On the surface, it may appear that Box (and ostensibly Dropbox) may be losing money today, there is much more at stake. Enterprises know they need to make a shift to a SMAC based world too. The cards appear to point favorably in the direction of additional options beyond the currently cloud storage portfolio offering. I would look more toward the future opportunities of the space through one of the four hypotheses and less on the impending implosion.

Storage Failure in the Cloud

Is storage in the cloud a failure? I’ll answer that further down…read on.

It started with a story in the Boston Globe on March 21, 2009:

http://www.boston.com/business/technology/articles/2009/03/21/data_backup_firm_sues_2_hardware_suppliers/

That spawned a series of threads on the failure of Cloud Storage. Carbonite’s CEO, Dave Friend posted a note to their blog:

http://www.carbonite.com/blog/default.aspx

But isn’t the real issue here how cloud storage is strategically used? Those that have managed storage in data centers know that disk drives are mechanical devices. They fail. Terms like MTBF (mean time between failure) become metrics of interest. But in the end, there are still drive failures.

Knowing that, processes are put in place to mitigate the risks. Logical and/or physical redundancy is a common means of mitigation. Storage vendors have built technologies around this very issue. When building systems in data centers, designs take these risks into account.

When evaluating storage providers (cloud or otherwise), why not ask questions about their systems? What class of services does it provide? Can you use the ‘trust buy verify’ model to validate their claims? If there is concern about their ability to provide the robust service you’re looking for, why not duplicate the data?

In addition to logical redundancy (ie: RAID, etc), physical diversity (ie: geo-diversity) can also play a role. It is possible for the storage vendor to provide geo-diversity. But that locks you into one vendor’s service. What happens if they have a failure? The question should be no different than if you’re talking about your own internal data center’s storage sub-system.

Why is Carbonite taking all the heat? Maybe they did make some poor decisions. I can’t validate that. But as a customer, I’d be asking other questions before I placed all of my eggs into any vendors basket.

So, that gets me to the root issue: Is the right strategy being used when considering cloud storage? I don’t think so. Which then answers the next question: Is storage in the cloud a failure? No. But there is much to consider before proceeding.