Marvin Gaye’s plaintive protest song, “What’s Going On?” could perhaps be made the theme song for the storage and cloud space of late. Mergers and acquisitions galore are being showered upon us.
Here is a recent sampling: Avago acquired LSI, Seagate acquired Xyratex, Western Digital bought Vrident and Velobit, Cisco snapped up Whiptail, EMC scooped up ScaleIO, Lenovo bought the IBM xSeries business and part of Motorola, and VMware grabbed AirWatch.
So what is going on? It all depends on who you talk to.
Gil Hecht, Founder and CEO of Continuity Software, thinks that commoditization of storage is a factor.https://o1.qnsr.com/log/p.gif?;n=203;c=204660765;s=10655;x=7936;f=201812281308090;u=j;z=TIMESTAMP;a=20400368;e=i
"As existing storage, compute and management software architectures become a commodity and new storage, compute and management software architectures enable an order of magnitude improvement in price/performance, the existing major vendors have no choice but to catch up or drop from the race," said Hecht.
The theme of the old playing catch up with the new is echoed by Greg Goelz, CEO of CloudByte. He believes that user expectations for flexibility and ease of use of cloud IT is dramatically quite different from earlier expectations in legacy enterprise environments.
“With the adoption of flash devices (SSD, PCIe, etc.) we began to eliminate the performance bottlenecks and fostered innovation within storage architectures to enable flash and hybrid solutions to meet today’s expectation for higher performance,” said Goelz.
“With this increase in performance, we could pack more applications and users into a single, shared storage environment with virtualization changing the workloads dynamically. Thus new start-ups and new approaches are moving storage solutions forward to keep up with the demands of cloud service providers.”
Another factor in this sudden spurt of activity is finance. Greg Schulz, an analyst with StorageIO Group, noted that all these mergers and acquisitions, IPOs and successful funding rounds are being fueled by money hungry to be invested rather than sit in an account earning very little interest. The reluctance to loan of recent times appears to be over. New technology opportunities appear to finally have overcome market jitters. At the same time, startups in cloud and flash have matured enough to become attractive targets to the bigger fish as they strive to remain current.
“There are buying opportunities for companies looking to expand their portfolios or move into new areas,” said Schulz. Flash remains popular along with cloud, virtual and software defined storage activity, hence the focus is on these areas.”
Flash advocates are quick to reinforce this message. Jeff Aaron, VP of Marketing at PernixData, calls flash the future of storage and believes we have only scratched the surface of its potential. He pointed to server-side flash as the area of hottest innovation at the moment, in order to take the highest performance to where the applications reside. This is leading to the idea of a flash hypervisor to virtualize all server side flash into a clustered tier that accelerates reads and writes to primary storage. Schulz concurs. “Watch for more startups coming out of stealth mode pertaining to software-defined flash for cloud and virtual environments,” he said.
As well as Violin and Nimble, he anticipates more IPOs from storage startups and flash providers, and of course, no slowdown in M&A activity. “More existing players will be acquired or go public, and some public and private players will disappear or end up on the ‘where are they now list’,” said Schulz. He cautioned, though, that that we may soon see the peak of the hype cycle and the end of the flash frenzy that has been going on for many years.
That will be good news for some, and bad for others as the market and media attention gradually shifts elsewhere. “There is still plenty of life in the flash market, but we could be moving into more of a long-term growth and customer deployment adoption cycle which for some vendors means they can now get money from customers that they can keep, instead of attracting millions from investors that they need to pay back,” said Schulz. And don’t ever write off the heavyweight champs like EMC and their rivals NetApp. They each are gaining steadily in flash and may have a few surprises up their sleeves. “I’m interested to see how EMC articulates where, when, why and how to use ScaleIO versus XtremIO versus other products in its portfolio,” said Schulz.