You have been told by someone or determined on your own that it is time for a new server, however what to get?
A blade server, rack mount, floor model, physical or virtual perhaps cloud?
How about one that is fully configured and accessorized to meet your specific environments needs?
There are several considerations involving what type of server or computer is needed to meet your specific needs or application requirements. Options include price, packaging, vendor preferences, blade center, freestanding, 1U rack mount, virtual and cloud support, with or without storage and networking, performance as well as power and cooling among other considerations.
Here is a link (PDF version here, may require registration) to an article that I put together to help determine your needs as well as consider various options for your next server.
With networking, care should be taken to understand if a given speed or performance capacity is being specified in bits or bytes as well as in base 2 (binary) or base 10 (decimal).
Another consideration and potential point of confusion are line rates (GBaud) and link speed which can vary based on encoding and low level frame or packet size. For example 1GbE along with 1, 2, 4 and 8Gb Fibre Channel along with Serial Attached SCSI (SAS) use an 8b/10b encoding scheme. This means that at the lowest physical layer 8bits of data are placed into 10bits for transmission with 2 bits being for data integrity.
With an 8Gb link using 8b/10b encoding, 2 out of every 10 bits are overhead. To determine the actual data throughput for bandwidth, or, number of IOPS, frames or packets per second is a function of the link speed, encoding and baud rate. For example, 1Gb FC has a 1.0625 Gb per second speed which is multiple by the current generation so 8Gb FC or 8GFC would be 8 x 1.0625 = 8.5Gb per second.
Remember to factor in that encoding overhead (e.g. 8 of 10 bits are for data with 8b/10b) and usable bandwidth on the 8GFC link is about 6.8Gb per second or about 850Mbytes (6.8Gb / 8 bits) per second. 10GbE uses 64b/66b encoding which means that for every 64 bits of data, only 2 bits are used for data integrity checks thus less overhead.
Quite a bit when you consider what we have talked about the need to support more information processing, moving as well as storing in a denser footprint.
In order to support higher densities faster servers, storage and networks are not enough and require various approaches to reducing the data footprint impact.
What this means is for fast networks to be effective they also have to have lower overhead to avoid moving more extra data in the same amount of time instead using that capacity for productive work and data.
PCIe leverages multiple serial unidirectional point to point links, known as lanes, compared to traditional PCI that used a parallel bus based design. With traditional PCI, the bus width varied from 32 to 64 bits while with PCIe, the number of lanes combined with PCIe version and signaling rate determines performance. PCIe interfaces can have one, two, four, eight, sixteen or thirty two lanes for data movement depending on card or adapter format and form factor. For example, PCI and PCIx performance can be up to 528 MByte per second with 64 bit 66 MHz signaling rate.
PCIe Gen 1
PCIe Gen 2
PCIe Gen 3
Giga transfers per second
2.5
5
8
Encoding scheme
8b/10b
8b/10b
128b/130b
Data rate per lane per second
250MB
500MB
1GB
x32 lanes
8GB
16GBs
32GB
Table 1: PCIe generation comparisons
Table 1 shows performance characteristics of PCIe various generations. With PCIe Gen 3, the effective performance essentially doubles however the actual underlying transfer speed does not double as it has in the past. Instead the improved performance is a combination of about 60 percent link speed and 40 percent efficiency improvements by switching from an 8b/10b to 128b/130b encoding scheme among other optimizations.
Serial interface
Encoding
PCIe Gen 1
8b/10b
PCIe Gen 2
8b/10b
PCIe Gen 3
128b/120b
Ethernet 1Gb
8b/10b
Ethernet 10Gb
64b/66b
Fibre Channel 1/2/4/8 Gb
8b/10b
SAS 6Gb
8b/10b
Table 2: Common encoding
Bringing this all together is that in order to support cloud and virtual computing environments, data networks need to become faster as well as more efficient otherwise you will be paying for more overhead per second vs. productive work being done. For example, with 64b/66b encoding on a 10GbE or FCoE link, 96.96% of the overall bandwidth or about 9.7Gb per second are available for useful work.
By comparison if an 8b/10b encoding were used, the result would be only 80% of available bandwidth for useful data movement. For environments or applications this means better throughput or bandwidth while for applications that require lower response time or latency it means more IOPS, frames or packets per second.
The above is an example of where a small change such as the encoding scheme can have large benefit when applied to high volume or large environments.
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
Welcome to the Winter 2011 edition of the Server and StorageIO Group (StorageIO) newsletter. This follows the Fall 2011 edition.
You can access this news letter via various social media venues (some are shown below) in addition to StorageIO web sites and subscriptions. Click on the following links to view the Winter 2011 edition as an HTML or PDF or, to go to the newsletter page to view previous editions.
Welcome to the tape summit resources and tape summit resources micro site with links for those who are interested in magnetic tape for backup, archive, BC, DR, big and little data
For being a declared dead or zombie technology (here, here or here) tape remains very much alive however its role is changing. There is no disputing that hard disk drives (HDDs) are continuing to expand their role for data protection including backup/restore, BC and DR where tape has been used for decades.
What is also occurring is that tapes role is changing from day to day backup to that of longer term data preservation including archiving with more data stored on tape today than in past history at a lower cost. In fact the continued reduced cost per tape and improved capacity as well as utilization has worked against tape from a marketing competitive standpoint. For example if you look at a chart showing tape (media and drive) revenues you see a decline, similar to what was seen a couple of years ago for HDDs.
What is not shown on some charts are how many units (drives or media) shipped with more capacity for a given price (again what was reported for HDDs a few years ago) when net capacity had increased. Vendors of tape technology have also had a rather low profile particular for those with other technologies that have received more marketing resources (people, time, money). After all, if a product is on a plateau of productivity and profitability why spend time or effort on extensive marketing or promotion vs. directing resources to get new items into the market.
As a result, for those looking to make a case that tape is on the decline based on revenues to convince customers to move away from that technology should have a marketing freebie. Recently Oracle announced a new large capacity tape drive and media following on previous announcements of enhanced LTO roadmap and future 35TByte tape capabilities announced January 2010 by Fujifilm and IBM.
For those who are interested following are some links to various topics including how SSD, HDD and tape can coexist complementing each other for different roles or functions. As to those who do not like tape, feel free to read if you like as there is also material on SSD, HDD, dedupe, cloud, data protection and other topics.
Something tells me we will be hearing, reading or watching more about tape being alive in the months to come.
Nuff said for now
Cheers gs
Thanks for visiting tape summit resources and tape summit resources micro site with links for those who are interested in magnetic tape for backup, archive, BC, DR, big and little data
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
Based on the trusted computing group (TCG) DriveTrust and OPAL disk drive security models, SEDs offload encryption to the disk drive while complimenting other encryption security solutions to protect against theft or lost storage devices. There is another benefit however for SEDs which is simplifying the process of decommissioning a storage device safely and quickly.
If you are not familiar with them, SEDs perform encryption within the hard disk drive (HDD) itself using the onboard processor and resident firmware. Since SEDs only protect data at rest, other forms of encryption should be combined to protect data in flight or on the move.
There is also another benefit of SEDs in that for those of you concerned about how to digital destroy, shred or erase large capacity disks in the future, you may have a new option. While intended for protecting data, a byproduct is that when a SED is removed from the system or server or controller that it has established an affinity with, its contents are effectively useless until reattached. If the encryption key for a SED is changed, then the data is instantly rendered useless, or at least for most environments.
Learn more about SEDs here and via the following links:
Self-Encrypting Drives for IBM System x
Trusted Computing Group OPAL Summary
Storage Performance Council (SPC) SED and Non SED benchmarks
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
What do VARs and Clouds as well as MSPs have in common?
Several things it turns out:
Some Value Added Resellers (VARS) (links to VAR related content and comments here, here and here) sell cloud services or solutions
Some VARs are also cloud or managed solutions providers (MSPs) themselves, thus some cloud or MSPs are VARs
Some VARs, cloud and MSPs compete on lowest or cheapest price
Some VARs, cloud and MSPs have diverse product offering portfolios
Some VARs, cloud and MSPs compete on value (e.g. not price)
Some VARs, cloud and MSPs value is in the trust, security and peace of mind that they provide to their client
For some, the value of a given VAR, cloud or MSP is the ability to shop around for a resource to get the lowest price.
For others, the value of a given VAR, cloud or MSP is the ability to get the best value which may not be the lowest price rather the most effective overall cost per services with trust, security, experience and peace of mind provided.
Value to often is confused with being cheap or lowest cost.
Value can also mean a higher price that includes more thus providing a better effective option (e.g. super size it).
On the other hand, higher priced should not be confused with always being a better product, service or solution.
You may find that the initial low cost requires other add on fees or activation charges, surcharges for use or activity along with optional services to make the solution useful all resulting in an overall higher amount to be paid.
Lowest cost may result in a bargain now and then if that fits your needs.
Value can also mean a better option providing an improved return on investment if a solution or service meets and exceeds your needs and expectations.
As an example, I recently switched from a cloud backup MSP (Mozy) not due to cost (costs would have gone down with their recent service plan announcement) rather I needed more value and functionality. With my new cloud backup MSP I get more functionality and capability that I can continue to grow into even though the price per GByte is higher than with my previous provider. What made the change of positive is what I get in the higher fee per GByte that in the end, actually makes it more affordable, not cheaper, just better value and return on investment.
For some low cost is value while for others, value is more than lowest cost including what you get for a given fee including trust, security, service and experience among other items. Different people will have different requirements or needs for what is or is not value.
If you do not like the term value, then try price performer.
Bottom line for now, with VARs, MSPs and Cloud (Public or private) dont be scared, however look before you leap!
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
Doing research in several different areas as well as working with clients on various project activities, many of which that are NDA.
Getting some recently finished content ready to appear on the main web site as well as in the blog and other venues.
Attending vendor events and briefing sessions on solutions some of which are yet to be announced.
Enjoying the cold and snowy winter as best as can be (see some videos here) while trying to avoid cold and flue season.
In addition to the above, I have been trying to stay very focused on is getting my new book which is titled Cloud and Virtual Data Storage Networking (CRC) wrapped up for a summer 2011 release. This is my third solo book project that is in addition to co writing or contributing to several other book projects.
Im doing the project the old fashioned way which means writing it myself as opposed to using ghost writers along with a traditional publishing house (CRC, same as my last book) all of which takes a bit more time. For anyone who has done a project like this you know what is involved. For those who have not it includes research, writing, editing, working with editors and copyeditors, subject matter experts doing initial reviews, illustrations and page layouts, markups, more edits and proofs. Then there are the general project management activities along with marketing and rollout plans, companion presentation material working with the publisher and others.
Anyway, hope you are all doing well, look forward to sharing more with you soon, now it is time to get back to work…
There are no hidden charges or fees, you will not be obligated to pay a fee or subscribe to a service, or be called or contacted via a sales or account manager person to buy something. Nor will you be required to sign up for a annual or short term retainer, make a donation, honorarium, endowment, contribution, subsidy, renumerate or sponsor in any other manner directly or via indirect means including second, third, fourth or by way of other virtual means or physical means. This also means via other organizations, venues, institutes, associations, communities, events or causes. (Btw, that is some industry humor some will get however to others that feel it is poking fun of their lively hoods, too bad!)
Your contact information will not be sold, bartered, traded, borrowed or abused being kept confidential nor will you be called or bothered (contact me if somebody does reach out to you). However you may get an occasional Server and StorageIO newsletter sent to you via email (privacy and disclosure statement can be found here).
There is however one small caveat and that is no spamming and direct submissions on yours or your companies behalf. If you are a public relations firm feel free to submit on behalf of your own organization, however have your clients submit on their own (or use their identity when doing so on their own behalf).
Why do I make this links page and list available for free to those who read it, as well as to those who are on it?
Simple, I use it myself to keep a list of companies, firms or organizations that are involved with data infrastructures (servers, storage, I/O and networking, hardware, software, services) that I have come across and worth keeping track of that I also feel worth sharing with others.
Still interested, all you need to do is the following:
No SPAM submission please
Please do not submit via web or blog page unless you want your contact information known to others.
Send an email to links at storageio dot com that includes the following:
1. Your company name 2. Your company URL 3. Your company contact person (you or someone else) including: Name Title or position Phone or Skype Email Optional twitter
4. Brief 40 character or less description of what you do, or solution categories (tip, avoid superlatives, see links page for ideas)
5. Optionally indicate to DND (Do Not Disturb) you with email newsletters, coverage or mentions.
Again, please, No Spam!
Its that simple.
Now its up to you to decide if you want to be included or not.
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
The other day NetApp announced that it was planning on doing another acquisition following on their recent purchase of Bycast (policy based storage and management software).
This time, NetApp is doing yet another software acquisition of Infrastructure Resource Management (IRM) as well as End to End (E2E) cross technology domain management and Storage or Systems Resource Analysis (SRA) startup Akorri which also builds on its past acquisition of SRA solution Onaro.
Is this a good move by NetApp?
Assuming they got a good price, yes, this has very potential for NetApp assuming they can assimilate the solution as well as articulate where it fits complimenting its other management tools including SANscreen (aka Onaro).
Is Akorii a good product?
Yes, most of the customers and var partners of Akorri that I talk to have great things to say and having looked into the technology, it has lots of good potential for NetApp. However, there is a common theme around Akorri that has been its high price, something that was also heard from Onaro customers before NetApp did that acquisition. If NetApp can leverage its direct as well as partner touch to reduce the cost of sale for Akorri as well as rationalize the pricing or at least better articulate the value proposition to make it a must have vs nice to have, they can do well.
The importance of E2E awareness of IT resources across different technology domains (or focus areas) is that you can not effectively manage what you do not have timely access or visibility into. Hence the theme of session being You cannot effectively manage what you do not know about in a timely manner. I recently did a couple of Industry Trends and Perspectives webcast events around the topic and themes of End to End (E2E) awareness and cross domain (or technology) management insight for cloud, virtual and other abstracted as well as physical IT environments.
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
What records will EMC break in NYC January 18, 2011?
In case you have not seen or heard, EMC is doing an event next week in New York City (NYC) at the AXA Equitable Center winter weather snow storm clouds permitting (and adequate tools or technologies to deal with the snow removal), that has a theme around breaking records. If you have yet to see any of the advertisements, blogs, tweets, facebook, friendfeed, twitter, yourtube or other mediums messages, here (and here and here) are a few links to learn more as well as register to view the event.
Click on the above image to see more
There is already speculation along with IT industry wiki leaks of what will be announced or talked about next week that you can google or find at some different venues.
The theme of the event is breaking records.
What might we hear?
In addition to the advisor, author, blogger and consultant hats that I wear, Im also in the EMCs analysts relations program and as such under NDA, consequently, what the actual announcement will be next week, no comment for now. BTW, I also wear other hats including one from Boeing even though I often fly on Airbus products as well.
Other hats I wear
However, how about some fun as to what might be covered at next weeks event with getting into a wiki leak situation?
A no brainier would be product (hardware, software, services) related as it is mid January and if you have been in the industry for more than a year or two, you might recall that EMC tends to a mid winter launch around this time of year along with sometimes an early summer refresh. Guess what time of the year it is.
Im guessing lots of superlatives, perhaps at a record breaking pace (e.g. revolutionary first, explosive growth, exponential explosive growth, perfect storm among others that could be candidates for the Storagebrain wall of fame or shame)
Maybe we will even hear that EMC has set a new record of number of members in Chads army aka the vspecialists focused on vSphere related topics along with a growing (quietly) number of Microsoft HyperV specialist.
That EMC has a record number of twitter tweeps engaged in conversations (or debates) with different audiences, collectives, communities, competitors, customers, individuals, organizations, partners or venues among others.
Possibly that their involvement in the CDP (Carbon Disclosure Project) has resulted in enough savings to offset the impact of hosting the event making it carbon and environment neutral. After all, we already know that EMC has been in the CDP as in Continual or Constant Data Protection as well as Complete or Comprehensive Data Protection along with Cloud Data Protection not to mention Common Sense Data Protection (CSDP) for sometime now.
Perhaps something around the number of acquisitions, patents, products, platforms, products and partners they have amassed recently.
For investors, wishful thinking that they will be moving their stock into record territories.
Im also guessing we will hear or see a record number of tweets, posts, videos and stories.
To be fair and balanced, Im also expecting a record number of counter tweets, counter posts, counter videos and counter stories coming out of the event.
Some records I would like to see EMC break however Im not going to hold my breath at least for next week include:
Announcement of upping the game in performance benchmarking battles with record setting or breaking various SPC benchmark results submitted on their own (instead of via a competitor or here) in different categories of block storage devices along with entries for SSD based, clustered and virtualized. Of course we would expect to hear how those benchmarks and workload simulations really do not matter which would be fine, at least they would have broken some records.
Announcement of having shipped more hard disk drives (HDD) than anyone else in conjunction with shipping more storage than anyone else. Despite being continually declared dead (its not) and SSD gaining traction, EMC would have a record breaking leg to stand on if the qualify amount of storage shipped as external or shared or networked (SAN or NAS) as opposed to collective (e.g. HP with servers and storage among others).
Announcement that they are buying Cisco, or Cisco is buying them, or that they and Cisco are buying Microsoft and Oracle.
Announcement of being proud of the record setting season of the Patriots, devastated to losing a close and questionable game to the NY Jets, wishing them well in the 2010 NFL Playoffs (Im just sayin…).
Announcement of being the first vendor and solution provider to establish SaaS, PaaS, IaaS, DaaS and many other XaaS offerings via their out of this world new moon base (plans underway for Mars as part of a federated offering).
Announcement that Fenway park will be rebranded as the house that EMC built (or rebuilt).
Disclosure: I will be in NYC on Tuesday the 18th as one of EMCs many guests that they have picked up airfare and lodging, thanks to Len Devanna and the EMC social media crew for reaching out and extending the invitation.
Other guests of the event will include analysts, advisors, authors, bloggers, beat writers, consultants, columnist, customers, editors, media, paparazzi, partners, press, protesters (hopefully polite ones), publishers, pundits, twitter tweepps and writers among others.
I wonder if there will also be a record number of disclosures made by others attending the event as guests of EMC?
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
I recently did a couple of Industry Trends and Perspectives webcast events around the topic and themes of End to End (E2E) awareness and cross domain (or technology) management insight for cloud, virtual and other abstracted as well as physical IT environments.
The importance of E2E awareness of IT resources across different technology domains (or focus areas) is that you can not effectively manage what you do not have timely access or visibility into. Hence the theme of session being You cannot effectively manage what you do not know about in a timely manner.
Here is the abstract for the webcast:
Virtualization, clouds and other forms of abstraction help IT organizations enable flexible and scalable services delivery. While abstraction of underlying resources simplifies services delivery from an IT customers perspective, additional layers of technology along with interdependencies still need to be tracked as well as managed. A key enabler for IT organizations is having end to end (E2E) situational awareness of available resources and how they are being used. By having timely situational awareness across various technology domains, IT organizations gain insight into how resources can be more effectively deployed in an efficient manner.
Join independent IT industry analyst, author and blogger Greg Schulz as he looks at common challenges as well as opportunities for leveraging E2E situational awareness to remove blind spots from efficient effective IT services delivery. Greg will look several scenarios including among others cost reduction, maximize resource usage, shrink migration and data consolidation times for cloud, virtual and traditional IT environments while maintaining or enhancing IT services delivery.
If you are interested in IT Infrastructure Resource Management (IRM) of servers, storage, IO networking, virtualization, cloud, backup or restore, optimization as well as cloud or legacy environments and metrics, I invite you to view the following web cast.
Click on the above image to access the BrightTalk web cast from their recent Virtualization Summit series (may require registration)
If you are interested, here is a link to a previous post I did on E2E management, SRA (systems or storage resource analysis) and management insight along with a recent related white paper sponsored by SANpulse that you can access here.
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
Despite having been repeatedly declared dead at the hands of some new emerging technology over the past several decades, the Hard Disk Drive (HDD) continues to spin and evolve as it moves towards its 60th birthday.
More recently HDDs have been declared dead due to flash SSD that according to some predictions, should have caused the HDD to be extinct by now.
Meanwhile, having not yet died in addition to having qualified for its AARP membership a few years ago, the HDD continues to evolve in capacity, smaller form factor, performance, reliability, density along with cost improvements.
Back in 2006 I did an article titled Happy 50th, hard drive, but will you make it to 60?
IMHO it is safe to say that the HDD will be around for at least a few more years if not another decade (or more).
This is not to say that the HDD has outlived its usefulness or that there are not other tiered storage mediums to do specific jobs or tasks better (there are).
Instead, the HDD continues to evolve and is complimented by flash SSD in a way that HDDs are complimenting magnetic tape (another declared dead technology) each finding new roles to support more data being stored for longer periods of time.
What the importance of this is about technology tiering and resource alignment, matching the applicable technology to the task at hand.
Technology tiering (Servers, storage, networking, snow removal) is about aligning the applicable resource that is best suited to a particular need in a cost as well as productive manner. The HDD remains a viable tiered storage medium that continues to evolve while taking on new roles coexisting with SSD and tape along with cloud resources. These and other technologies have their place which ideally is finding or expanding into new markets instead of simply trying to cannibalize each other for market share.
Here is a link to a good story by Lucas Mearian on the history or evolution of the hard disk drive (HDD) including how a 1TB device that costs about $60 today would have cost about a trillion dollars back in the 1950s. FWIW, IMHO the 1 trillion dollars is low and should be more around 2 to 5 trillion for the one TByte if you apply common costs for management, people, care and feeding, power, cooling, backup, BC, DR and other functions.
IMHO, it is safe to say that the HDD is here to stay for at least a few more years (if not decades) or at least until someone decides to try a new creative marketing approach by declaring it dead (again).
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO. All Rights Reserved. StorageIO is a registered Trade Mark (TM) of Server StorageIO.
I recently did an interview with the folks over at Infortrend (a RAID storage company) discussing various industry trends and perspectives including RAID, data footprint reduction (DFR) as well as Green IT including how the Green Gap.
The Green Gap is the disconnect between common messaging around carbon and environment vs. IT and business productivity sustainment challenges that continues to result in confusion along with missed opportunities.
RAID is alive however it continues to evolve as well as leveraged in conjunction with other techniques
Here is the link to the first of a two part series where you can read my comments on how many organizations are missing out on economic as well as business sustainability benefits due to confusion and the Green Gap among other topics.
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
Over in Eden Prairie (Minneapolis Minnesota suburb) where data storage vendor Compellent (CML) is based, they must be singing in the hallways today that it is beginning to feel a lot like Christmas.
Sure we had another dusting of snow this morning here in the Minneapolis area and the temp is actually up in the balmy 20F temperature range (was around 0F yesterday) and holiday shopping is in full swing.
The other reason I think that the Compellent folks are thinking that it feels a lot like Christmas are the reports that Dell is in exclusive talks to buy them at about $29 per share or about $876 million USD.
Dell is no stranger to holiday or shopping sprees, check these posts out as examples:
Now some Compellent fans are not going to be happy with only about $29 a share or about $876 million USD price given the recent stock run up into the $30 plus range. Likewise, some of the Compellent fans may be hoping for or expecting a bidding war to drive the stock back up into the $30 range however keep in mind that it was earlier this year when the stock adjusted itself down into the mid teens.
In the case of 3PAR and the HP Dell budding war, that was a different product and company focused in a different space than where Compellent has a good fit.
Sure both 3PAR and Compellent do Fibre Channel (FC) where Dells EqualLogic only does iSCSI, however a valuation based just on FC would be like saying Dell has all the storage capabilities they need with their MD3000 series that can do SAS, iSCSI and FC.
In other words, there are different storage products for different markets or price bands and customer application needs. Kind of like winter here in Minnesota, sure one type of shovel will work for moving snow or you can leverage different technologies and techniques (tiering) to get the job done effectively the same holds for storage solutions.
Compellent has a good Cadillac product that is a good fit for some SMB environments. However the SMB space is also where Dell has several storage products some of which they own (e.g. EqualLogic), some they OEM (MD3000 series and NX) as well as resell (e.g. EMC CLARiiON).
Can the Compellent product replace the lowered CLARiiON business that Dell has itself been shifting more to their flagship EqualLogic product?
Sure however at the risk of revenue cannibalization or worse, introduction of revenue prevention teams.
Can the Compellent product then be positioned lower down under the EqualLogic product?
Sure, however why hold it back not to mention force a higher priced product down into that market segment.
Can the Compellent product be taken up market to compete above the EqualLogic head to head with the larger CLARiiON systems from EMC or comparable solutions from other vendors?
Sure, however I can hear choruses of its sounding a lot like Christmas from New England, the bay area and Tucson among others.
Does this mean that Dell is being overly generous and that this is not a good deal?
No, not at all.
Sure it is the holiday season and Dell has several billion dollars of cash laying around however that in itself does not guarantee a large handout or government sized bailout (excuse me, infusion). At $30 or more, that would be overly generous simply based on where the technology fits as well as aligns to the market realities. Consequently, at $29, this is a great deal for Compellent and also for Dell.
Why is it a good deal for Dell?
I think that it is as much about Dell getting a good deal (ok, paying a premium) to acquire a competitor that they can use to fill some product gaps where they have common VARs. However I also think that this is very much about the channel and the VAR as much if not more than it is just about a storage product. Servers are part of the game here which in turn supports storage, networking, management tools, backup/recovery, archiving and services.
Sure Dell can maybe take some cost out of the Compellent solution by replacing the Supermicro PCs that are the hardware platform for their storage controllers with Dell servers. However the bigger play is around further developing its channel and VAR ecosystems, some of whom were with EqualLogic before Dell bought them. This can also be seen as a means of Dell getting that partner ecosystem to sell overall, more dell products and solutions instead of those from Apple, EMC, Futjisu, HP, IBM, Oracle and many others.
Likewise, I doubt that Mr. Dell is paying a premium simply to make the Compellent shareholders and fans happy to create monetary velocity to stimulate holiday shopping and economic stimulus. However, for the fans, sure, while drowning your sorrows in egg nogg of holiday cheer that you are not getting $30 or higher, instead buy a round for your mates and toast Dell for your holiday gift.
The real reason I think this is a good reason for Dell is that from a business and financial perspective, assuming they stick to the $29 range, it is a good bargain for both parties. Dell gets a company who has been competing with their EqualLogic product in some cases with the same VARs or resellers. Sure it gets a Fibre Channel based product however Dell already has that with the MD3000 series which I realize is less function laden then Compellent or EqualLogic; however it is also more affordable for a different market.
If Dell can close on the deal sticking to its offer which they have the upper hand on, execute including rolling out a strategy as well as product positioning plan. Then educate their own teams as well as VARs and customers of what products fit where and when in such a manner that does not cause revenue prevention (e.g. one product or team blocking the other) or cannibalization instead expanding markets, they can do well.
While Compellent gets a huge price multiple based on their revenue (about $125M USD), if Dell can get the product revenue up from the $125 to $150 million plateau to around $250 to $300 million without cannibalizing other Dell products, the deal pays for itself in many ways.
Keep in mind that a large pile of cash sitting in the bank these days is not exactly yielding the best returns on investment.
For the Compellent fans and shareholders, congratulations!
You have gotten or perhaps are about to get a good holiday gift so knock of the complaining that you should be getting more. The option is that instead of $28 per share, you could be getting 28 lumps of coal in your Christmas stocking.
For the Dell folks, assuming the deal is done on their terms and that they can quickly rationalize the product overlap, convey and then execute on a strategy while keeping the revenue prevention teams on the sidelines you too have a holiday gift to work with (some assembly will be required however). This also is good for Dell outside of storage which may turn out to be one of the gems of the deal in keeping or expanding VARs selling Dell based servers and associated technologies.
For EMC who was slapped in the face earlier this year when Dell took a run at 3PAR, sure there will be more erosion on the lower end CLARiiOn as has been occurring with the EqualLogic. However Dell still needs a solution to effectively compete with EMC and others at the higher end of the SMB or lower end of the enterprise market.
Sure the EqualLogic or Compellent products could be deployed into such scenarios; however those solutions are then playing on a different field and out of their market sweet spots.
Lets see what happens shall we.
In the meantime, what say you?
Is this a good deal for Dell, who is the deal good for assuming it goes through and at the terms mentioned, what is your take?
Who benefits from this proposed deal?
Note that in the holiday gift giving spirit, Chicago style voting or polling will be enabled.
All Comments, (C) and (TM) belong to their owners/posters, Other content (C) Copyright 2006-2024 Server StorageIO and UnlimitedIO LLC All Rights Reserved
