Data Efficiency in the News

Why NetApp’s Stock Is Worth $28


NetApp (NTAP) has seen weak demand for storage hardware over the last few years, corresponding to weak IT spend across the globe. NetApp’s storage product revenues have consistently fallen over the last four years, a trend observed by many large IT hardware, telecom hardware and storage hardware vendors. Competing storage systems manufacturers EMC (NYSE:EMC), Hewlett-Packard Enterprise (HPE), Hitachi Data Systems and IBM (IBM) have also witnessed low demand for storage hardware . As a result, storage systems manufacturers are shifting their focus to fast-growing market domains such as flash-based storage arrays or converged systems (which include servers, storage and networking equipment in one box) or software-defined storage to stay relevant. Moreover, it has become imperative for hardware vendors to enhance their focus on software solutions and post-sales hardware maintenance & services given that they are higher-margin businesses and have had high customer demand over the years.

Below we take a look at key growth drivers for the company that justify our $28 price estimate for NetApp , which is around 15-20% lower than the current market price. NetApp’s stock price is up by over 30% since the beginning of the year.

Storage vendors are increasingly facing competition from so-called White Box storage vendors. Over the last few years, customers are shifting preference to low-cost original design manufacturer (ODM) storage boxes, which is cutting into the addressable market for large vendors. As a result, NetApp’s share in the external storage systems market has fallen from over 13% in 2013 to 11.1% in 2015. This trend could continue in the coming years with smaller vendors gaining share from large manufacturers

Low product sales have led to discounted selling prices, which ultimately drove down product margins significantly. The adjusted gross margin for the product division has fallen from under 55.6% in 2011 to around 50.3% in 2015. This could further fall to around 47.3% in 2016.

In addition to driving the top line, the hardware maintenance and services division has also contributed positively to improving the company’s profitability. The product division’s gross margins fell by over 5 percentage points from 2011 through 2015 due to pricing pressure from smaller vendors. On the other hand, the services division’s gross margin improved by over 5 percentage points. In the long run, the services division could continue to become more profitable for the company as a large aggregate client base could lead to a higher refresh rate for maintenance contract renewals.

However, the sustained weakness in NetApp’s core product division and over-dependence on one revenue stream could be a risk going forward. As a result, we maintain our $28 price estimate for NetApp’s stock. You can modify the interactive charts in the article above to see how much the change in individual drivers such as gross margins or market share impacts the price estimate for NetApp’s stock.

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Avnet to Sell Technology Solutions Business Unit to Tech Data for $2.6 Billion


Avnet, Inc., a global technology distributor,  entered into an agreement to sell its Technology Solutions operating group to Tech Data Corporation in a stock and cash transaction valued at approximately $2.6 billion.

Under the terms of the agreement, Avnet will receive $2.4 billion in cash and 2.8 million shares of Tech Data common stock, currently valued at approximately $200 million.

The sale of this business provides both Avnet and Tech Data with opportunities to focus on core strategies and scale their respective businesses, ultimately delivering greater profitability to their shareholders.

We believe the acquisition of Technology Solutions by Tech Data is the best decision for our employees, customers, suppliers and shareholders. This transaction presents us with the best strategic path for Avnet’s future success and profitability, and puts Technology Solutions in position to achieve breakthrough business results with Tech Data,” said William Amelio, CEO, Avnet. “Moving forward, Avnet will focus its resources and investments on becoming a leader in design chain and supply chain services not only for our current customers and suppliers, but also for new markets. We will drive targeted investments in embedded solutions, Internet of Things (IOT) and critical digital platforms. By investing in these high growth areas, we can expand the breadth of our portfolio and attract new customers worldwide who depend on us to deliver world-class solutions.”

Avnet’s Technology Solutions operating group is an IT solutions distributor serving customers and suppliers in more than 80 countries. It provides next generation solutions, marketing, training, resources and services that span the cloud to the data center and encompass the entire IT lifecycle. They work with value-added resellers to make it easier and more affordable to enter and excel in high-growth technology and vertical markets locally and around the world.

This transformative transaction will position us as a premier global IT distributor with the most diverse end-to-end solutions from the data center to the living room,” said Bob Dutkowsky, CEO, Tech Data. “Tech Data has competed with and admired Avnet Technology Solutions for many years. We’re thrilled to start this journey together and are confident that our customers, vendor partners, employees, and shareholders will appreciate and benefit from the value that we will bring to the market. We look forward to welcoming the Technology Solutions team to Tech Data and are excited for the opportunities that this combination creates.”

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IBM Power Systems and Red Hat Extend Collaboration for Next-Generation Cloud Platforms

| IBM - United States

IBM (NYSE: IBM) and Red Hat, Inc. (NYSE: RHT), a leading provider of open source solutions, today announced enhancements and growth in their long-standing alliance to better help clients embrace hybrid cloud. Through joint engineering and deeper product collaboration, the two companies plan to deliver solutions built on key components of Red Hat’s portfolio of open source products, including Red Hat Enterprise Linux, Red Hat Virtualization, and Red Hat Enterprise Linux High Availability offerings. This move will help position IBM Power Systems as a featured component of Red Hat’s hybrid cloud strategy spanning platform infrastructure located both on and off premises

IBM and Red Hat have a long tradition of innovation to advance product offerings across IBM platforms. Through expanded collaboration both in upstream technologies and product development, the companies aim to enable greater compatibility between their respective platforms, bringing Red Hat’s offerings to clients who previously worked in distributed environments. Specifically, IBM and Red Hat are working together to build functionality and jointly engineer solutions across IBM Power Systems and productized in the Red Hat portfolio by:

  • Enabling Red Hat solutions on IBM’s next-generation Power Systems;
  • Introducing new high performance computing (HPC) capabilities for leading edge research deployments;
  • Developing high availability capabilities for Power Systems.

“Red Hat believes that the next generation of applications and hybrid cloud services will be powered by modern, hyperscale hardware and software that span both public clouds, like IBM Cloud, and on-premise platforms,” said Jim Totton, vice president and general manager, Platforms Business Unit, Red Hat. “Red Hat and IBM are expanding their long-standing alliance to address this opportunity. Through joint engineering and deeper product collaboration, we are excited to deliver world-class solutions built on Red Hat’s portfolio of enterprise open source solutions and IBM’s Power Systems platform.”

“Clients choose open source capabilities to achieve new levels of agility and flexibility in their hybrid cloud environments, but they need access to optimal support,” said Scott Crowder, CTO, IBM Systems. “Clients have long turned to Red Hat and IBM to support their enterprise computing needs. Now, we are expanding that relationship with Red Hat to provide new systems designed for enterprise-grade open source solutions that go far beyond what commodity infrastructure has offered.”

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Permabit Collaborates with Red Hat to enable customers to optimize their Hybrid Cloud Storage

| PR Newswire

Permabit, a Red Hat Technology Partner and expert in data reduction for the cloud, is collaborating with Red Hat, the world’s leading provider of open source solutions, to deliver advanced data reduction for Red Hat Storage. Permabit has tested and certified its VDO data reduction for Linux® with Red Hat Ceph Storage and Red Hat Gluster Storage software to help data center IT organizations to reduce their storage footprint.

Permabit Technology Corporation recently announced the latest release of its Virtual Data Optimizer (VDO) software, VDO 6 – the only modular data reduction solution available for the Linux block storage stack. VDO delivers Permabit-patented deduplication, HIOPS Compression™ and thin provisioning in a commercial Linux software package for enterprise hybrid cloud data centers and cloud service providers. Organizations struggling to keep up with demand for cloud storage are suddenly confronting the need for huge data center expansion which can run up to $3000/square foot. (1)

Combining Permabit VDO with open source private cloud storage maximizes data center density, reducing the need for expansion while also lowering operational costs of power and cooling. Permabit Labs testing of VDO with unstructured data repositories on Red Hat Storage saw data reduction rate of 2:1. Permabit Labs Testing in Virtual Disk Image environments saw VDO compression and deduplication deliver up to 6:1 data reduction rates with Red Hat Storage.

Red Hat Ceph Storage is a massively scalable, open source, software-defined storage system that supports unified storage for cloud environments. With object and block storage in one platform, Red Hat Ceph Storage can more efficiently and automatically manage the petabytes of data needed to run businesses facing large data growth. Red Hat Gluster Storage is an open, software-defined file storage platform that combines with standard X86 server platforms to enable a cost-effective alternative to traditional NAS appliances for unstructured and semi-structured data.

“Red Hat is excited to be working with Permabit to enable its data reduction technology on top of Red Hat Ceph Storage and Red Hat Gluster Storage for customers considering dedupe and compression as a solution for increasing storage density in expanding data centers,” said Ben Cherian, Director of Partnerships, Alliances, and Channel for Red Hat Storage. “Partners such as Permabit play an important role in supporting Red Hat enterprise customers as they move toward hybrid cloud architectures using open, software-defined storage.”

“Data reduction has become a requisite component of today’s Linux hybrid cloud solutions, enabling businesses to optimize their storage consumption and costs and minimize the need for expensive data center expansion,” said Tom Cook, Permabit CEO. “We are pleased to be working with Red Hat to make VDO available to its customers who want to increase their effective storage capacity and lower data center costs.”

To learn more about Permabit VDO Data Reduction software visit:

About Permabit:

Permabit pioneers the development of data reduction software that provides data deduplication, compression, and thin provisioning. Our innovative products enable customers to get to market quickly with solutions that cut effective cost, accelerate performance, and gain a competitive advantage. Just as server virtualization revolutionized the economics of compute, Permabit software is transforming the economics of storage today.

Permabit is headquartered in Cambridge, Massachusetts with operations in California, Korea and Japan. For more information, visit

Red Hat, Ceph, and Gluster are trademarks or registered trademarks of Red Hat, Inc. or its subsidiaries in the U.S. and other countries. Linux® is the registered trademark of Linus Torvalds in the U.S. and other countries.


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Gartner Report on Software-Defined Storage


Software-defined storage (SDS) offers potential benefits to I&O leaders looking to increase storage solution flexibility and reduce costs. We highlight common SDS use cases and provide an overview of its benefits, limitations and vendor landscape.

Key Findings

  • I&O leaders are looking for SDS products that offer the potential for better TCO, efficiency and scalability to address exponential-data-growth needs, and to benefit from innovations from hardware and software players independently.
  • The SDS market remains fragmented, with no clear market leaders.
  • Despite programmability and automation benefits of SDS, it is viewed as trailing compute and networking in overall maturity.


  • Identify which SDS use case or cases described in this research align with your business objectives and current challenges, and build a plan to evaluate products that address these use cases. Investigate each software-defined storage product for its capabilities, and choose it for the appropriate use case, while understanding any current limitations.
  • Implement SDS solutions that enable you to decouple software from hardware, reduce TCO and enable greater data mobility.

Design an SDS architecture to enable storage to be a part of software-defined data center automation and orchestration framework, not a siloed platform.

SDS promises to deliver modern storage and data services as software-based capabilities that can leverage existing infrastructure or introduce commodity platforms to improve storage economics, as well as to provide data mobility, including cloud integration.

Gartner has observed significant SDS interest via client inquiries, discussions at our events and searches. According to the results of the December 2015 Gartner Data Center Conference storage survey, 48% of storage leaders are actively investigating or piloting SDS solutions (see the Appendix).

Gartner views SDS as offering these capabilities:

  • It abstracts storage capabilities dynamically derived from physical or virtual devices and/or services – independent of location or class of storage – to offer greater agility and to deliver QoS, while optimizing costs.
  • It is available for use or licensing in the form of software, and does not require an appliance or proprietary hardware to be purchased from the same vendor. Some vendors may package SDS as a preintegrated hardware solution for faster delivery.
  • It has one, or several, of the following key attributes: abstraction, instrumentation, programmability, automation, mobility, policy management and orchestration.

Infrastructure SDS Use Cases

Use Case 1: Storage Platform TCO Reductions Through On-Demand Scalability and Exploitation of Commodity Hardware Resources


  • Example 1: Large IT business units looking to lower storage capex.
  • Example 2: Storage solutions for unstructured data with rapid growth patterns.
  • Example 3: DevOps scenarios where common data services and data mobility are desired, in addition to the elimination of proprietary hardware.
  • Example 4: I&O leaders that foster IT as a core expertise and a business differentiator, as they are willing to invest in the new skills, training and potential change in delivery model.


  • Cost: Infrastructure SDS eliminates the need for high-priced proprietary storage hardware. I&O leaders will deploy storage software on industry-standard server hardware and will lower opex of storage upgrades and maintenance costs.
  • Innovation: Industry-standard hardware will quickly be able to take advantage of the latest innovations of server hardware, such as new CPU chips, SSD and HDD technology.
  • Availability: Some SDS solutions offer a distributed scale-out approach, where redundancy is enforced in the software layer.
  • Performance: SDS provides the ability to add on and scale performance and/or capacity by adding nodes, or by upgrading existing server hardware in an on-demand basis, versus the need to prepurchase in a monolithic design.
  • Flexibility: The hardware platform has less vendor lock-in, better interoperability, and is easily scalable and upgradable by the IT team.
  • Agility: Storage provisioning and management can be more easily integrated into the standard data center automation and management tools.


  • Integration: SDS integration with commodity servers needs to be embraced as a new discipline, and addressed with OEM/ODM providers to ensure interoperability.
  • Performance: SDS performance will be based on hardware optimization, and rightsizing of software and hardware resources, and needs to be routinely monitored, measured and optimized.
  • Cost: SDS cost needs to be carefully examined to ensure that the overall solution offers not only lower acquisition costs, but overall lower TCO due to increased IT responsibilities.

Adoption Rate and Interest in SDS Technology

The following figures are based on polling results from the 2014 and 2015 Gartner Data Center, Infrastructure & Operations Management Summits.

Figure 2. Adoption Stages of SDS
Gartner,Software-Defined Storage,datacore f2n = 105
(Source: Gartner, April 2016)

Figure 4. Gartner Client SDS Inquiries Throughout 2015

Gartner,Software-Defined Storage,datacore f4(Source: Gartner, April 2016)


Great Piece on SDS look at source article and Gartner Report for more detail.  Click READ MORE button below;

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Worldwide Enterprise Storage Market Holds Steady in Second Quarter


Total worldwide enterprise storage systems factory revenue remained flat year over year, posting 0.0% growth and $8.8 billion during the second quarter of 2016 (2Q16), according to the International Data Corporation (IDC) Worldwide Quarterly Enterprise Storage Systems Tracker. Total capacity shipments were up 12.9% year over year to 34.7 exabytes during the quarter. Revenue growth declined within the group of original design manufacturers (ODMs) that sell directly to hyperscale datacenters. This portion of the market was down 21.5% year over year to $794.7 million. Sales of server-based storage were up 9.8% during the quarter and accounted for almost $2.4 billion in revenue. External storage systems remained the largest market segment, but the $5.7 billion in sales represented flat 0.0% year-over-year growth.

“After a slow start to the year, the enterprise storage system market remained steady during the second quarter,” said Liz Conner, research manager, Storage Systems. “Spending on all flash deployments continues to grow and help drive the market. The decreasing cost of flash media, coupled with increasing use cases, high density deployments, and availability of flash-based storage products, have resulted in rapid adoption throughout the market.”

2Q16 Total Enterprise Storage Systems Market Results

EMC and HPE remained in a statistical tie* for the top position within the total worldwide enterprise storage systems market, accounting for 18.1% and 17.6% of spending respectively. HPE’s year-over-year growth rate as reported by IDC was impacted by the start of the H3C partnership in China that began in May of 2016; as a result, a portion of HPE-designed storage systems were rebranded for the China market and do not count in HPE’s market data from that point forward. Dell held the next position with a 11.5% share of revenue during the quarter. IBM and NetApp accounted for 6.8% and 6.7% of global spending respectively. As a single group, storage systems sales by original design manufacturers (ODMs) selling directly to hyperscale data center customers accounted for 9.0% of global spending during the quarter.

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Gartner Says Worldwide Public Cloud Services Market to Grow 17 Percent in 2016

| Technology Research

The worldwide public cloud services market is projected to grow 17.2 percent in 2016 to total $208.6 billion, up from $178 billion in 2015, according to Gartner, Inc. The highest growth will come from cloud system infrastructure services (infrastructure as a service [IaaS]), which is projected to grow 42.8 percent in 2016. Cloud application services (software as a service [SaaS]), one of the largest segments in the global cloud services market, is expected to grow 21.7 percent in 2016 to reach $38.9 billion.

“Growth of public cloud is supported by the fact that organizations are saving 14 percent of their budgets as an outcome of public cloud adoption, according to Gartner’s 2015 cloud adoption survey,” said Sid Nag, research director at Gartner. “However, the aspiration for using cloud services outpaces actual adoption. There’s no question there is great appetite within organizations to use cloud services, but there are still challenges for organizations as they make the move to the cloud. Even with the high rate of predicted growth, a large number of organizations still have no current plans to use cloud services.”

Most organizations are already using a combination of cloud services from different cloud providers. While public cloud usage will continue to increase, the use of private cloud and hosted private cloud services is also expected to increase at least through 2017. The increased use of multiple public cloud providers, plus growth in various types of private cloud services, will create a multicloud environment in most enterprises and a need to coordinate cloud usage using hybrid scenarios.

Although hybrid cloud scenarios will dominate, there are many challenges that inhibit working hybrid cloud implementations. Organizations that are not planning to use hybrid cloud indicated a number of concerns, including: integration challenges, application incompatibilities, a lack of management tools, a lack of common APIs and a lack of vendor support.

“Of course in the case of hybrid cloud, these top concerns also highlight some of the top opportunities for providers,” said Mr. Anderson. “We know that public cloud services will continue to grow. We also know that private cloud services (of various types) will become more widely used. Therefore, providers must focus on the top hybrid cloud challenges to be successful in meeting the growing demand for hybrid cloud solutions.”

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Cloud Computing: Big Companies To Step Up Migration To The Cloud

| International Business Times

Though security remains a concern, a silicon valley analyst group predicts a major shift to cloud computing among major enterprises in the next three years.

McKinsey & Co.’s IT-as-a-Service Cloud and Enterprise Cloud Infrastructure survey indicates the transition to a hybrid cloud infrastructure is being prompted by cost concerns.

Cloud computing involves a network of remote servers hosted on the internet to store, manage and process data rather than working locally off a computer’s hard drive — in some respects a throwback to the old days of dumb terminals that lacked local storage and connected to a mainframe.

Cloud computing generated $100 billion in 2012. That is expected to grow to $127 billion next year and to $500 billion by 2020.

“Enterprises plan to reduce the number of workloads housed in on-premise traditional and virtualized environments, while dedicated private cloud, virtual private cloud, and public infrastructure as a service are expected to see substantially higher rates of adoption. Interestingly, on-premise private cloud environments, which have been adopted by nearly half of enterprises, are likely to stay nearly flat,” the survey found.

Since medium-size enterprises already have been making the shift, the addition of large companies is going to have a severe impact on companies that provide on-premises IT services. Currently, less than 20 percent of work has migrated to the cloud. The survey found large enterprises plan to double their adoption of private cloud services by 2018, reducing shipments of on-site servers by as much as 5 percent.

The survey found the most likely beneficiaries of this cloud migration are Amazon, Google and Microsoft, which have the largest capacity. Nearly half of those surveyed said they already have handed off some work to such “hyperscale” providers. A like percentage said they plan to use smaller providers like Rackspace as well.

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Enterprise IT pros see most workloads in cloud by 2018

| Computerworld

Within two years, a majority of enterprises expect to be running their workloads in the cloud.

After getting past considerable concerns about privacy and security, companies are increasingly placing their faith — and their information and services — in the cloud.

The level of enterprise workloads in the cloud is expected to go from 41% today to 60% by mid-2018, according to technology research firm 451 Research, which surveyed more than 1,200 IT professionals worldwide in May and June. 451 then combined that information with separate interviews done with senior IT buyers and IT executives.

The study also showed that 38% of enterprises said they have a cloud-first policy, which means they at least consider, if not prioritize, the cloud for all deployments.

Company mergers, acquisitions and divestitures, along with moves like hardware buys and software upgrades, are pushing companies toward the cloud.

Ezra Gottheil, an analyst with Technology Business Research, said he’s not surprised that enterprise IT professionals expect so much growth in the cloud.

Part of the reason for the growth is that business executives are moving beyond initial fears about security and privacy in the cloud. With more experience under their belts, cloud confidence has grown dramatically.

While it’s easy enough to move new services, apps and data to the cloud, transferring services and information already run in-house is a different matter.

“I’m never surprised that it takes time to change how you do things,” Gottheil said. “When things are working, there’s little incentive to change, even if things will be better after the change.”

According to 451 Research, strong cloud growth is expected particularly in critical enterprise workload categories, like data analytics and business applications.

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Permabit Deduplication and Compression now for Ubuntu Server

| PR Newswire

Permabit Technology Corporation, the data reduction expert, today announced availability of its Albireo Virtual Data Optimizer (VDO) for Canonical’s Ubuntu Server.

Permabit certified VDO with Ubuntu Server 14.04 LTS and has been qualified for use in OpenStack environments. In addition, Permabit will deliver support for Ubuntu 16.04 LTS next quarter. VDO data reduction enables organizations to reduce their storage footprint, increasing data density, and avoiding costly data center expansions. Global 2000 customers in the telecom and financial sectors are using VDO to fit more data into their existing storage.  VDO is available through Permabit’s network of integration partners.

Ubuntu is at the forefront of large cloud infrastructure deployments, thanks to Canonical’s experience in building clouds for its customers and its involvement in the OpenStack project as a founding member. Ubuntu is also optimized and certified for the most popular public clouds — allowing organizations the opportunity to use Ubuntu wherever they choose to run their applications and services.

“We are pleased to partner with Permabit with their Linux data reduction offering VDO as they become part of Canonical’s Juju Charm ecosystem,” said Stefan Johansson, Global Software Alliances Director, Canonical. “Permabit recognizes the value of open storage standards, open source software, interoperability, and scale out infrastructure provided by Juju and Ubuntu OpenStack as key components of today’s enterprise and cloud service provider data centers.”

The leader in data reduction technology, Permabit Technology Corporation recently announced the latest release of its Virtual Data Optimizer (VDO) software, VDO 6 – the only modular data reduction solution available for the Linux block storage stack.  VDO delivers the company’s patented deduplication, HIOPS Compression™ and thin provisioning in a commercial software package for Linux for enterprise hybrid cloud data centers and cloud service providers.

“We are pleased to deliver the industry-leading Linux data reduction solution to Canonical service providers and community,” said Tom Cook, CEO and President. “Now, with VDO, Ubuntu users can achieve greater density and realize massive savings on data center investment.”

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