In its first big move since shelling out almost $700 million in August to acquire the storage system business of Dot Hill Systems, [which is pocket change compared to rival Western Digital’s $19-billion October bid for flash chip vendor SanDisk] Seagate Technology has announced a new and improved AssuredSAN (hardware) RealStor (software) family of hybrid and all-flash storage arrays. There are a number of enhancements, but the one that stands out is the 40% reduction in cost per IOPS and cost per VM.
“If you’re an OEM… i.e. HP… Teradata… Quantum… you need to bring into your portfolio a solid, intelligent, fast array from a vendor you can rely on,” said Jim Jonez, Marketing Director, who came to Seagate in October when the Dot Hill acquisition closed. These arrays have features that are absolutely unique, that you need as a storage provider to provide to your customers, he told IT Trends & Analysis.
“The addition of Dot Hill’s arrays to Seagate’s portfolio is a significant ‘win’ for OEMs and their customers,” said Mark Peters, practice director and senior analyst of Enterprise Strategy Group, in a prepared statement. “Not only are OEM sales efforts now bolstered by a more comprehensive selection of field-proven storage solutions, but also these new RealStor enhancements address critical enterprise needs while maintaining the products’ hallmark competitive pricing. The result is that OEMs – regardless of customer needs or budget – will be able to offer very compelling solutions through their relationship with Seagate.”
Blogging about the Dot Hill acquisition in August, ESG analyst Scott Sinclair noted that the deal made sense on a number of levels. ‘With Dot Hill’s comprehensive product set of storage systems and software, Seagate should be better equipped to capture a larger piece of that cloud infrastructure pie [a storage infrastructure market that could easily surpass $10 billion currently]. The bottom line is that as the battle for cloud dominance heats up, so does the battle to supply the infrastructure to the cloud. And Seagate is strengthening its position.’
Seagate appears to have a lot of strengthening to do. For its most recent quarter (first quarter of fiscal year 2016 ended October 2, 2015) the company reported lower-than-expected revenues (approximately $2.9 billion) and gross margin (23.6%), with net income of $34 million. “While lower than planned nearline enterprise demand temporarily impacted our financial results, we are pleased with the momentum we have across our products, which will be further supported by the newly acquired assets of Dot Hill and our ability to now completely integrate the Samsung hard drive business,” said Steve Luczo, Seagate’s chairman and CEO.
Selling to the cloud/hyperscale markets appears to be the direction to go. Global second-quarter storage revenue rose 2.1% (to $8.8 billion) over that of last year’s same quarter, but the fastest-rising part of the storage industry (25.8% YoY, to $1 billion) is the ODM direct business, which IDC defined as storage sold directly to hyperscale data center customers. Only Hewlett-Packard saw its sales rise year over year, while rivals EMC, NetApp, Dell, IBM and Hitachi, all saw their YoY sales fall.
For the most recent quarter, total worldwide enterprise storage systems factory revenue grew 2.8% year over year to $9.1 billion during the third quarter of 2015 (3Q15). Revenue growth was strongest within the group of ODMs that sell directly to hyperscale datacenters. This portion of the market was up 23.4% year over year to $1.3 billion. External storage systems remained the largest market segment, but the $5.8 billion in sales represented a decline of -3.1% YoY.
Flash is also significantly outpacing disk in the enterprise. The total All Flash Array (AFA) market generated $626.2 million in revenue during the quarter, up 60.8% YoY. The Hybrid Flash Array (HFA) segment of the market continues to be a significant part of the overall market with $2.4 billion in revenue and 26.5% market share.
“If you look at hard disk drives, I think the world has shown that growth has peaked,” said Jonez, but there are segments that are still attractive. “In my opinion this is the best time we’ve ever seen to be in the storage industry. While the overall market is growing at single digit rates, there are pockets of growth.”
Seagate’s strategy for growing its system business is still a work in progress. “We haven’t worked out a vision of where the Dot Hill fits in… certainly Seagate is interested in moving into higher value”.
As for the disk-is-dead-long-live-flash pundits, Jonez agrees that there is a need for smarter intelligent storage systems. “In terms of economics, I would point to the hybrid array… as partially solving the performance issues.”
We’re making our storage systems more intelligent, automatic, “it just works out of the box.”
A small amount of flash goes a long way towards performance, he said. Flash is more expensive than disk on a capacity basis, but hard drives are 10x more expensive than flash on an IOPs basis.
Jonez said what we deliver in a hybrid array is the best of both worlds. “That’s a powerful thought and goes a long way to addressing the challenges the IT manager is facing.”
The Fiddly Bits
Available now to Seagate OEM customers, the major enhancements to the AssuredSAN RealStorfamily of hybrid and all-flash storage arrays included:
-Greater Data Center Performance: New set of value-endurance SSDs delivers all flash-like performance with HDD-like capacity, marked by a 40 percent reduction in cost per IOPS and cost per VM.
-Increased Data Center Versatility: Features simplified storage-array management. A new OpenStack Cinder Driver further reduces complexity and cost, while enabling organizations to take advantage of cloud storage.
-Powerful, Easy Disaster Recovery: Includes new RealSpan asynchronous replication, as well as automated snapshots. Setup of RealSpan takes less than 15 minutes and delivers reliable replication to another array, whether 1 meter or 10,000 kilometers away. Additional storage snapshots can be scheduled and performed with zero performance degradation.
-New updates and features to the RealStor 6004 include: RealStor Operating System: This next-generation, real-time storage operating system enables autonomic tiering and other intelligent storage features for the enterprise-class 6004 array; Increased Performance: Delivers double the transaction performance of the RealStor 400; and, New Interfaces: Offers fibre channel and iSCSI host support to enable broad data center connectivity for OEM customers.