Business · CIO · Cloud · Data

Is HPE headed toward extinction?

The first question might be, why does a CIO care if any one vendor comes or goes? It matters if you are invested in that company’s products or services. The vast majority of enterprises have invested in a number of enterprise companies…including HP Enterprise (HPE). Many are asking where HPE is headed and how long customers can rely on that relationship and investment?

In order to answer that question, one has to break down the problem a bit. In the beginning, we had one Hewlett Packard.

hp-split-one-hp

 

HP SPLITS IN TWO

On October 6, 2014, HP (NYSE: HPQ) announced that it would split into two new publicly traded Fortune 50 companies. The two companies would split down the lines of consumer products and enterprise solutions. The former being called HP Inc. and the latter being called HP Enterprise. A year later, on November 1, 2015, the split officially took effect.

My take is that the split is a good thing for both HP/ HPE and customers. It allows each of the two companies to focus on their respective strengths and markets. The consumer market is much different from the enterprise market.

hp-splits-in-two

HPE CONTINUES TO REDUCE PORTFOLIO

Since the split in 2015, HPE has been busy reducing the size of their portfolio. There were four core pieces to HPE’s business: Cloud, Services, Software and Infrastructure.

One of the first things to go was HPE’s Helion Cloud business. The mystery here is that cloud is one of the largest opportunities for any of the legacy IT vendors, including HPE. As customers make the move from traditional corporate data center infrastructure to cloud-based solutions, existing providers need to consider this loss of revenue. Cloud presents one of the largest opportunities for customers and HPE could have leveraged their large based of existing customers. So, why would HPE move away from building up this business as part of its future strategy?

Unfortunately, While HPE’s foray with a cloud offering had the opportunity to carry HPE into the future, they struggled to find their footing with customers. In the end, the twists and turns for HPE offering a cloud offering were futile and they shuttered the Helion offering.

There is still a component of HPE’s cloud business that is hanging on called Cloud System. However, it is part of infrastructure and requires a Technical Services engagement as part of the purchase. In sum, this is a rather small part of HPE’s business and the requirement

The second step was spinning off HPE’s Services business to CSC May 2016. While HPE & CSC called the transaction a merger, it was widely seen in the industry as a spinout from HPE to CSC. The move aligned HPE’s Services business with an existing large services vendor.

The third step was spinning off HPE’s Software business to Micro Focus in September 2016. Again, the transaction was billed as a “merger”, however, it is also seen as a spinout from HPE to Micro Focus. The interesting thing about this transaction was that it included one of the gems in HPE’s business. It included their big data and analytics business.

hp-split

Taking away HPE’s Cloud, Services and Software businesses, the only thing that is left is their core infrastructure business. Aside from their continued innovation in servers and storage, their Synergy platform potentially provided HPE a longer term future in the infrastructure business.

Enterprise customers are moving away from owning traditional corporate data center assets in droves. This includes traditional server and storage infrastructure. Out with the old and in with the new. HPE’s Synergy platform potentially provides HPE an interesting bridge for those enterprise customers looking to leverage infrastructure investments as they leverage new architectures and development routines on their way to cloud.

I say potentially because HPE’s infrastructure business is hindered by a number of factors. First, enterprises are moving away from traditional infrastructure toward cloud. And future state solutions including cloud and big data are now gone from the HPE portfolio. In addition, HPE continues to struggle with the traditional way of thinking. And this traditional thinking is not going to resonate with customers looking to change things up demonstrably. There is still potential for HPE’s infrastructure business, but only if they make significant shifts in thinking, strategy and leadership. That being said, the window of opportunity for HPE infrastructure is limited.

IS THE LONG TERM STRATEGY FOR HPE EXTINCTION?

Here’s the kicker: By closing down their Cloud business and selling their big data and analytics business, HPE essentially removed their long term future. On the surface that would be suspect until you think about the end-game.

Looking at the path HPE has taken over the past two years and what is left, there is a glaring conclusion that HPE’s strategy all along was focused on breaking up the company and selling off the assets. Many of us suspected this was the case right out of the gate. With the activities just in the past six short months, it is clear that HPE’s destiny is extinction.

The irony in all of this? Once the end-state for HPE infrastructure is determined, there will be only one “HP” left: HP Inc.

Business · CIO

HP’s composable story addresses the evolving enterprise

Last week, HP Enterprise (HPE) pulled together a number of influencers from around North America for a unique event. Unlike most events that talk about specific products or announcements, this event was quite different. This event dug into HPE’s direction around ‘composable’ infrastructure and how it addresses the needs of the evolving enterprise organization.

WHAT IS COMPOSABLE

We have heard about composable concepts for some time. HPE’s approach is to apply the composable concept to that of infrastructure by assembling compute, storage and networking resources for the benefit of a given set of applications. An application, via HPE’s Application Program Interface (API) is able to pull together resources as needed. When they are no longer required, the resources go back into the ‘resource pools’.

Now some may scoff at the notion and suggest this is nothing new. They would be right except for one little twist that makes a big difference. HPE’s approach addresses the broader needs of the enterprise and disparate applications…using a single infrastructure solution.

SOMETHING FOR EVERYONE

HPE’s Project Synergy was announced at HP Discover in Las Vegas in June and the approach is fairly straightforward. A single infrastructure stack that addresses the needs for all types of applications. That does not mean a separate stack for legacy applications from the stack that supports newer applications. It means that there is a single infrastructure stack that supports all types of applications…on the same stack.

The resources (compute, storage, network) sit in resource pools within the stack. As an application spins up, it addresses the API at which point the resources are composed for that application. When the resources are no longer needed, they return to their respective resource pools ready for the next application. As an example, resources might be used for a legacy application one minute, return to the pool and then recomposed for a new style of application only to return to the pool and be used for yet another application.

WHAT THIS MEANS FOR THE ENTERPRISE

By using a single infrastructure stack for all types of applications, customers are no longer worried about stranded resources as applications move from legacy to newer architectures. Resources are immediately available for repurpose via the resource pools.

Historically, enterprises faced a myriad of infrastructure stacks to support the varied application styles. As we see applications leverage new styles of architectures, the number of potential stacks under the traditional approach leads to increased complexity. By sharing resources through application pools and composability, it allows enterprises to focus less on infrastructure and focus further up in the application stack which is closer to the true business engagement.

Business · Data

HP Discover Executive Storage Discussion

HP kicked off their coffee talk series with executives from the HP Storage group. Manish Goel is the new SVP & GM of HP Storage replacing David Scott. While Manish has only been with HP two months, he has a firm grasp on where the HP Storage group is headed. Manish was formerly with NetApp and understands the shifts in the storage marketplace today.

One of the core premises from the HP Storage group is to drive the cost of storage down; specifically in the flash category. HP is still sticking with both 3PAR and StoreVirtual strategies. Both solutions are squarely geared toward the enterprise market with a myriad of models to suit the varied requirements.

In addition, HP’s approach is to address the storage framework with three tiers:

  1. Infrastructure and Hardware: These are the core building blocks.
  2. Infrastructure Technology: Backup and other core storage services.
  3. Storage Management: This is where HP OneView comes in to provide a single pane of glass view across storage.

Flash is a hot topic in the storage communities. HP’s objective is to lower the cost of all-flash arrays. One statistic supporting this move is: 1 out of every 3 arrays that HP ships are all-flash arrays. But will flash continue the march down the cost path and eventually replace tape? Doubtful in the near-term. Many of the cost comparisons take place between flash storage and conventional spindles.

When asked about HP’s strategy to provide storage solutions to the service provider market, the conversation changes a bit. It’s clear that HP is focused on the on-premises enterprise market. Storage support for the service provider market will come via the HP Helion Cloud solutions.

On the subject of data services, the storage team is fully engaged with OpenStack, REST APIs and data integration. This is one area to watch as HP Storage moves forward strategically.

CIO

There comes a point when it is not just about storage space

Is the difference between cloud storage provides about free space? In a word, no. I wrote about the cloud storage wars and potential bubble here:

The cloud storage wars heat up

https://avoa.com/2014/04/29/the-cloud-storage-wars-heat-up/

4 reasons cloud storage is not a bubble about to pop

https://avoa.com/2014/03/24/4-reasons-cloud-storage-is-not-a-bubble-about-to-pop/

Each of the providers is doing their part to drive value into their respective solutions. To some, value includes the amount of ‘free’ disk space included. Just today, Microsoft upped the ante by offering unlimited free space for their OneDrive and OneDrive for Business solutions.

Is there value in the amount of free space? Maybe, but only to a point. Once they offer an amount above the normal needs (or unlimited), the value becomes a null. I do not have statistics, but would hazard a venture that ‘unlimited’ is more marketing leverage where most users only consume less than 50GB each.

Looking beyond free space

Once a provider offers unlimited storage, one needs to look at the feature/ functionality of the solution. Not all solutions are built the same nor offer similar levels. Enterprise features, integration, ease of use and mobile access are just a few of the differentiators. Even with unlimited storage, if the solution does not offer the feature you need, storage value is greatly diminished.

The big picture

For most, cloud storage is about replacing a current solution. On the surface the amount of free storage is a quick pickup. However, the real issue is in the compatibility and value beyond just the amount of free storage. Does the solution integrate with existing solutions? How broad is their ecosystem? What about Single Sign On (SSO) support? How much work will it take to implement and train users? These are just a few of the factors that must be considered.

 

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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.

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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/

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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.