EMC’s Stealth Approach to Utility Computing

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In the wake of its bid to acquire virtualization software maker VMWare, EMC is insisting that the move is not an attempt to insert itself into the race for utility computing market share against rivals such as IBM and Hewlett-Packard .

Some analysts, while praising EMC’s strategy, find this claim hard to believe.

After all, the Palo Alto, Calif.-based VMware provides server virtualization software for Intel-based servers, which allows operating systems such as Microsoft Windows, open source Linux, and Novell’s NetWare to run simultaneously and independently on the same Intel-based server or workstation, all while shuttling live applications across systems with no business disruption.

These are functional characteristics of utility, or on-demand, computing systems that deploy at the touch of a button and self-regulate.

VMware enjoys partnerships with IBM and HP, both of which make Intel-based servers. Many analysts have said it would make sense for IBM or HP to acquire VMware to help automate and facilitate their own utility computing strategies.

Sageza Research Director Charles King says it seems EMC and both HP and IBM are charting two distinct courses for utility computing.

“It seems to me over the last year to 18 months, IBM, HP, and Sun have been trying to frame the argument that heterogeneous IT management works best as
a systems vendor play and that you need to have someone’s fingerprints from the front of the data center to the back-end,” King told internetnews.com.

“Frankly, that argument has been resonating in the market, putting pressure on EMC, EDS, and even Dell to an extent because they don’t have the breadth or depth to explain why best-of-breed systems are relevant in an increasingly componetized world,” King continued. “The question surrounding EMC became, ‘What do you need a storage specialist for?'”

Chris Gahagan, senior vice president of storage infrastructure software at EMC, says acquiring VMware is the culmination of a stealth project the companies began working on a year ago. Gahagan oversaw the effort, called Project FX. The goal of the technical effort was to tie the virtualization of any server or storage device without the need for reconfiguration.

Ideally, this would provide end-to-end “virtual information infrastructure,” Gahagan told internetnews.com. This means a customer can have an idealized environment for their applications and operating system that is completely divorced from underlying hardware. There would be no interruption to applications or downtime around planned upgrades or maintenance. Customers would be able to provision new OS systems and applications in seconds instead of hours and would get much higher utilization and automation, Gahagan explained.

During a recent conference call, EMC president and CEO Joe Tucci emphasized that VMware’s relationships with IBM, HP, and others would not change should the acquisition bid succeed. Gahagan echoed those sentiments, adding that VMware would enable EMC to complement the utility computing offerings of IBM and HP.

“We believe there are ways for vendors who do not sell servers to offer grid-based computing ,” Gahagan said. In the meantime, Gahagan said VMware is working to develop programming interfaces to ensure that no companies interested in using its technology will get shut out. This is in line with the company’s open software initiative to support other vendors “as well as we support ourselves.”

Analysts Differ on EMC’s Designs for On-Demand

Neither IBM nor HP would comment for this article, but some analysts beg to differ on the notion that EMC will not be competing openly with IBM and HP.

Nancy Marrone-Hurley, senior analyst with Enterprise Storage Group, contends operating system virtualization plays a major role in IBM’s and HP’s respective on-demand and adaptive enterprise strategies. This means that EMC will clearly tread in the utility computing domain.

“EMC sees that if they can virtualize the operating system and combine computer powers, they will be protecting the space for software applications,” Marrone-Hurley told internetnews.com.

“They’re not going to let IBM and HP own the space with their file systems. EMC will now have a placeholder for the virtualization of a whole infrastructure. This has definitely put EMC in a more competitive state, which can target the utility computing market with their partners, such as Dell. By gaining the ability to put their software in any environment, EMC is making sure it will not be shut out by other companies.”

John Madden, an analyst covering utility computing for research firm Summit Strategies, said he thought that either HP or IBM would have picked up VMWare long ago and sees the current prospective deal between VMWare and EMC as both complementary and competitive to server vendors who sell Intel-based systems.

“I think the play is both offensive and defensive for EMC,” Madden says. “Offensive because it makes EMC relevant in terms of virtualizing compute resources, and therefore makes the vendor an important player going forward in dynamic utility computing, and defensive because it prevents HP and IBM from picking up VMware themselves.”

“Of course, whatever EMC develops,” Madden continues, “they’re still going to have to rely on the policy-based management platforms being developed by HP and Tivoli to make dynamic utility computing a reality — even though EMC has some impressive management software in their own right.”

VMware Third New Piece in EMC’s ILM Puzzle

One thing that many agree on is that securing VMware is the third major software acquisition target by EMC to shore up its information lifecycle management strategy (ILM), the company’s pervasive play to manage information from its creation to its disposal. EMC earlier acquired data archiving outfit Legato and is close to wrapping up its on content management concern Documentum, both crucial pieces of the company’s ILM plan.

Gahagan believes VMware would provide the underlying infrastructure to help ILM work for EMC and its customers. In fact, he says, ILM provides proof that
EMC is not trying to eclipse IBM or HP in the utility computing space.

“We see IBM’s and HP’s approach as an attempt to manage the data center efficiently,” maintains Gahagan. “We are trying to manage the information in the
data center through ILM. So, what you have are technologies in both camps to solve a different problem.

Still, Sageza’s King thinks the competitive nature is clear: “The whole idea of enterprise IT is managing information and the endpoint is in storage, so
what better place to launch ILM from storage rather than from front-to-back management?”

I think it’s pretty audacious,” King continues. “For the last two years, EMC has been on an acquisition spree after consistently getting rapped by the competition for not having a strategy. They clearly have one with ILM.”

Madden, Marrone-Hurley, and King all see systems vendors as experiencing some angst over EMC’s bid for VMware.

“If it was indeed a stealth project between EMC and VMware, which is news to me, then HP and IBM can’t be too happy,” Madden says.

Both Marrone-Hurley and King believe that of all the systems vendors, IBM may be experiencing the most discomfort from EMC’s wandering into its utility
computing garden.

“IBM may view this as more of a threat competitively,” Marrone-Hurley says. “HP has all these solutions, but they don’t integrate until they reach the
customer. At IBM, the storage and server folks are more closely aligned. They are used to EMC being competitive on the storage side, but not in servers. EMC is getting into virtual OS, and that is what IBM wants to do.”

“There has to be some discomfort at IBM,” contends King, with EMC potentially controlling VMware. “From a partnering standpoint, EMC needs to demonstrate
that they can manage these partnerships. If they can pull it off and let VMware, Documentum, and Legato do what they do well while keeping customers happy, they will blunt any effort from IBM or HP to get customers off of those products.”

“If they can make this happen,” King continues, “EMC will have an early market advantage as a single vendor that offers central management of IT.”

Analysis courtesy of Internet News.

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Clint Boulton
Clint Boulton
Clint Boulton is an Enterprise Storage Forum contributor and a senior writer for CIO.com covering IT leadership, the CIO role, and digital transformation.

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