HDS Metamorphisis: From Storage 5th to IoT 1st
Sep21

HDS Metamorphisis: From Storage 5th to IoT 1st

LAS VEGAS: HDS is dead. Long live Hitachi Vantara. By combining its former storage/IT business unit (origins date back to 1979, but debuted as HDS in 1989) together with Pentaho (BI software acquired in 2015) and Hitachi Insight Group (IoT products and services, i.e. Vantara 1.0, formed in 2016: ), $81 billion Hitachi is repositioning HDS from a fifth-place finish in enterprise storage to first place in the operational technology (OT)/IT/IoT space. In addition to launching the reorganization at Hitachi NEXT 2017 in front of more than 2,000 attendees and more thousands online, the new and improved IoT business unit draped itself in most of IT’s — and business’ — hot buttons, including Big Data and analytics, cloud, containers, appliances and converged infrastructure. Although HDS was recently upgraded from Challenger to Leader in Gartner’s 2017 Magic Quadrant for Solid-State Arrays, the hottest segment in enterprise storage, and the unit was contributing around 20% of Hitachi’s revenues, it has been on a downward trend the last couple of years. The overall enterprise storage market grew only 2.9% last quarter (to $10.8 billion), and fifth-place HDS accounted for only $413 million, down 3.8%, and well behind first-place HPE and second-place Dell EMC. A year ago it had 5.7% of the enterprise storage market revenues, while two years ago it had a 7.8% share of worldwide external storage revenue during the quarter.   While storage is stuck in commodity hell and HDS appears to be falling behind, IoT is experiencing exponential growth. Back in February Gartner predicted 8.4 billion things will be connected in 2017, up 31% from a year ago. That’s almost $2 trillion on endpoints and services this year, and we’re looking at 20.4 billion connected things by 2020,  with hardware spending expected to reach almost $3 trillion. IDC is not as optimistic, putting the IoT market at just under $1.4 trillion by 2021. That may be less than half of Gartner’s forecast, but it still represents an incredible opportunity for Vantara, which is pushing a more holistic approach than most of its competitors. “The true value of IoT is being realized when the software and services come together to enable the capture, interpretation, and action on data produced by IoT endpoints,” said Carrie MacGillivray, vice president, Internet of Things and Mobility at IDC.” The tagline for NEXT was ‘Lead What’s Next’, that was reinforced by another, more enduring Hitachi theme, ‘Double Bottom Line’, marrying the drive for business success together with social responsibility. The launch of Ventara “marks a monumental change for Hitachi”, said Hitachi, Ltd. president and CEO Toshiaki Higashihara, in his keynote on Tuesday. The company was...

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Pure Gold: Flash Vendor Predicts 30%-Plus CAGR, $35-Billion TAM

SAN FRANCISCO: Pure Storage has made it to the big leagues, having outfought, out-thought and outlasted the hordes of competitors in the enterprise flash storage market, which is experiencing explosive growth in the rapidly emerging digital transformation/big data and analytics/Internet of Things world. No longer relegated to the ‘Others’ category, it is a top-five player that looks too big to buy (Dell EMC, like James Bond, proves you should Never Say Never Again, but an acquisition — or at least a suitable acquisitor — appears unlikely) and too small to thrive without some help, typically a significant barrier to entry like proprietary (and popular) intellectual property, large installed base or deep pockets. With both the $1-billion revenue plateau and its first quarterly profit within reach in calendar 2017, the Puritan elders — AKA its senior executives — are predicting even bigger things to come, like at least three more years of 30%-plus revenue growth, surpassing the $2-billion annual revenue mark by 2020. That prediction was just one of the items announced to more than 3,000 customers, partners and staff (with another 2,000 online, for a total increase of 300% over last year’s inaugural event), at this week’s Pure//Accelerate 2017. Unlike the overall enterprise storage market, which continues to see capacity shipment growth at the expense of revenue and margin growth, the flash market, especially all flash arrays (AFAs), is growing explosively — 48% in the first quarter. Sales were a little over $1.3 billion, with Pure Storage holding down fourth place with 12% market share, behind Dell EMC (29%), NetApp (21%), HPE (17%), and comfortably ahead of IBM (7%). “All-flash array is the only segment growing in the external storage market space,” said Jimmy Yu, Dell’Oro Group vice president, in a statement. “While the total market for external storage has contracted for the past two years, and will likely decline again this year, all flash storage system sales are reaching all new highs. We predict all-flash array revenue to grow approximately 40 percent in 2017 to reach nearly $7 billion while disk and hybrid storage system revenues decline about 14 percent.” AFA’s future is looking even brighter, according to both flash guru Jim Handy, GM of semiconductor research group, Objective Analysis, and Gartner. Handy expects a manufacturing breakthrough in high-capacity 3D NAND chips next year that will further lower AFA prices. Gartner is predicting that half of all data centers will only use AFA for primary storage by 2020, with the market growing to $9.67 billion. Pure believes the total addressable market for its faster solid-state storage arrays is $35 billion. Dave Vellante, chief analyst of Wikibon, agrees the...

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Pure Flash: Catching Up Or Racing Ahead?
Jun15

Pure Flash: Catching Up Or Racing Ahead?

SAN FRANCISCO: There were a number of product announcements, some fascinating market research, and insights into the future provided at, and leading up to, this week’s Pure//Accelerate 2017, the second annual customer/partner event from enterprise flash storage market light-heavyweight Pure Storage, Nearing the $1-billion revenue mark, the company is comfortably in the top five flash vendors and offers an interesting perspective on where the market is, and where it might be going. The company’s marketing slogan — or at least one of them — is software-driven, hardware-accelerated, so it’s appropriate that there were more than 25 software announcements, all delivered in evergreen, all seamless upgrades. “Our core DNA is software,” said Scott ‘Dietz’ Dietzen, CEO of Pure Storage. The announcements included: Pure1 META, it’s Artificial Intelligence (AI) platform for delivering on the vision of self-driving storage; its vision for the data platform for the cloud era; major updates to its flagship software, Purity, Purity for FlashArray 5.0, and Purity for FlashBlade 2.0; and Purity CloudSnap, which extends Purity’s Snapshots to FlashBlade, NFS, and the public cloud. In April Pure announced FlashArray//X, the first mainstream all-NVMe FlashArray,  a new protocol for communicating with flash that provides the ‘low-latency and parallelism that promises to take the potential of flash to new heights,’ blogged Max Kixmoeller, Pure’s VP, Products. A month later it launched the NVMe Now promotion, an extension to the company’s TB-for-TB trade-in program Evergreen Storage. Through October 31, 2017, organizations using VMAX and XtremIO can upgrade to FlashArray//X, providing customers a “total cost of ownership savings of close to 50 percent over six years.” When asked how Pure’s portfolio now compares to the competition, storage guru Mark Peters, ESG Practice Director and Senior Analyst (Storage), Enterprise Strategy Group, gave them a solid ‘B’ and said they are now comparable, with the following caveats. It depends on how your define their competition and how you define their portfolio, he explained. “Assuming you are comparing to other AFA folks and just on the product rather than all the consumption and support choices, then they are now (at last) at least on par… maybe even with some nice advanced differentiators. If you compare to a broader storage, HCI or IT provider, clearly they have a long way to go.” If you assume it’s by how you define their portfolio, he views it as an iceberg. “To date we are only seeing a small % above the water (hence the solid “B”….but their architecture and approach means that their portfolio has immense extensibility — we are just not exposed to it all yet (so maybe an A’).” At least one competitor appears concerned about...

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HPE: “Nowhere Left To Hide”
Jun08

HPE: “Nowhere Left To Hide”

Hewlett Packard Enterprise is in Sin City this week, holding its annual customer and partner event (HPE Discover 2017), accompanied with the usual flurry of product announcements and preceded by another troubling financial report. HPE’s Meg Whitman, President and Chief Executive Officer, believes the company is heading for an upswing, “accelerating out of the turnaround”, according to a recent interview. “I can feel it,” she said. “It is just smarter, easier, simpler. You cannot underestimate the accountability. There is nowhere left to hide at this company. I see a perfect place. There is nowhere left for partners to hide. There is no place for HPE employees to hide. It just makes things far easier and, frankly, more fun because you can get stuff done faster.” Faster, maybe, but better? HPE’s commodity hardware businesses and primary revenue generators — servers, storage, and to a lesser extent, networking — all took hits in the most recent quarter, with the to-be-expected impacts on revenues and margins. Second quarter FY17, announced on May 31, included a 13% year-over-year drop in GAAP net revenue ($7.4 billion vs $8.5 billion), and a more than 50% drop in GAAP operating margin (2.4% vs 2016’s 5.3%). While Whitman is predicting a speedy upturn, the current performance is not reassuring: -Enterprise Group revenue was $6.2 billion, down 13% year over year, down 7% when adjusted for divestitures and currency, with an 8.8% operating margin; -servers revenue was down 14%; -storage revenue was down 13%; and, -networking revenue was down 30%. Overall IT spending is expected to inch up 1.4% this year, to $3.5 trillion, with the datacenter segment pegged at a very anemic 0.3% growth. “We are seeing a shift in who is buying servers and who they are buying them from” said John-David Lovelock, research vice president at Gartner. “Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers which is impacting the overall data center system segment.” Vendor revenue for the global server market declined 4.6% to $11.8 billion in 1Q17, but HPE took a much bigger hit, with a 15.8% YoY decline in sales. Second-place Dell — 20.1% vs HPE’s 24.2% market share — grew its revenues 4.7%, while Cisco, IBM, and Lenovo were statistically tied for third place, and all saw revenue declines (3%, 34.7% and 16.5%, respectively). Storage was worse. 4Q16 enterprise factory revenue was down 6.7% YoY, to $11.1 billion, with Dell holding down top spot, courtesy of its EMC acquisition, and with HPE tied with...

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ITOM Drives Pending HPE/Micro-Focus Spin-Merge
May04

ITOM Drives Pending HPE/Micro-Focus Spin-Merge

The Hewlett Packard Enterprise IT Operations Management Summit, this week’s three-day event in Dallas, is over, but how the ITOM business will move forward when HPE’s spin-merge with Micro-Focus is completed remains to be seen. The $8.8 billion transaction, which will earn HPE a $2.5 billion cash payment and a 50.1% stake in the combined company, is expected to close August 31, at which time Chris Hsu, COO and Executive Vice President of HPE Software, will become the CEO of the new entity. Recent Securities and Exchange Commission filings included details about HPE’s software business: total revenue in the 12 months through Oct. 31, 2016 were $3.17 billion and ITOM comprised 61% of the revenue. The rest of the portfolio changing hands were: Enterprise Security Products (18% of revenue), Information Management and Governance (16%) and Big Data Analytics (5%). Revenue for all products broke down to: 28% license, 9% software-as-a-service (SaaS), 50% maintenance, and 13% professional services. While a pure-play software company offers ‘promise’, Gartner stated that adding HPE’s ITOM and ADM offerings to Micro Focus’ portfolio creates ‘significant, complex and uncertain overlaps’. Analyst Rob Enderle, who has been unimpressed with the performance of HPE and President and CEO Meg Whitman, called the software business the idea that ‘just hasn’t died a well-deserved death.’ Prior to the spin-merge Forrester Research analyst Glenn O’Donnell predicted that a software deal would play into the direction the company has taken since it separated from HP Inc. “Selling the software business fits in with the strategy of breaking into smaller pieces, which is the company’s plan now,” he said. “There’s a lot of merit in that position, as a lot of those software components are not necessarily at the core for them.” There are no recent number for the ITOM market, but as of last July one survey put it as the largest component of the IT operations and services management market, and it was predicted to grow 7.5% annually between 2016 and 2024. The global ITOSM market was valued at $17.40 billion in 2015 and it is expected to expand at a CAGR of 6.5% through 2024 to reach $30.96 billion. In addition to HPE, key vendors include: IBM, Oracle, Microsoft, BMC Software, ServiceNow, VMware, Compuware, and CA Technology. In March the company announced the release of Docker-certified ITOM monitoring solutions for Docker containers on the new Docker store, which was followed shortly after by the launch of four containerized versions of its ITOM offerings: Hybrid Cloud Management, Data Center Automation, Operations Bridge, and IT Service Management Automation. Incorporating built-in, open source container technology from Docker and Kubernetes, the four suites feature...

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