Sleeping well and making storage better
On July 9 2010, John Lechleiter, CEO of Eli Lilly and Company wrote an editorial for the Wall Street Journal, entitled America’s Growing Innovation Gap in which he cited a study (completed by the Information and Technology and Innovation Foundation) which concludes the US had slipped to sixth place among the top 40 nations for innovative competitiveness and was dead last for ‘rate of change of innovations capacity’ over the last 10 years.
That shocked me. So I turned off the Sox game, sacrificed a couple hours of sleep and dug into the ultra comprehensive, Gartner External Controller-Based Disk Storage, Worldwide, 2006-2009 report to see how we are doing in the storage business (another wild night at the Cook household). The report shows the top five US based storage companies (EMC, IBM, HP, Dell and NetApp) maintained worldwide market share between 67-68.9 percent during the period and companies such as 3PAR, DataDirect, DataDomain, Xiotech, Compellent, Pillar, BlueArc, Isilon, LeftHand and EqualLogic (all grown in the US) achieved noteworthy market share during the period. Not one non-US based company entered the top 25 storage companies during the period according to Gartner.
My (slightly) unscientific analysis is:
the US storage industry is competing well and doing a great job at innovation. It is interesting to think about how it is being done. The storage industry is innovating the old fashioned way: with internal development, OEM licensing and strategic acquisitions. By the way, I’m not saying innovation is unique to the US, XIV is a great example of a company with origins outside the US (Israel) that was acquired by IBM.
Think about recent announcements in data optimization. During EMC World in June, the company announced data compression and on June 14, IBM’s potential acquisition of Storewize was reported. On June 7, we announced Albireo OEM deduplication to the market and during HP’s Tech World the announcement of StoreOnce end-to-end dedupe was made followed by an EMC announcement of dedupe skunk works, Viper. So, in the course of just one month, we’ve seen internal development , OEM deals and strategic acquisitions all employed by leading companies to make their storage more efficient. The market works. Innovation is fueling rapid adoption of data optimization.
Here’s why. Data optimization will put late adopters at a pricing disadvantage. By lowering the effective cost of storage by 60-80%, data optimization is a must have technology or a vendor will face margin pressure and market share decline as competitive adoption takes hold.
When we invented Albireo, we noted a lot of great companies were building outstanding primary storage solutions. We concluded the last thing the world needed was another storage solution. Albireo was designed to make their primary storage solutions better (NAS, SAN and Unified) – massively more efficient without performance impact, feature loss or data safety compromise. OEMs told us, ‘stay out of the read path and use my storage stack’ and we did. Albireo leverages the vendors’ data management IP and is never in the read path so their customers can sleep at night. And it accelerates time to market so they can weigh the build vs. OEM decision and sleep at night. As Steve Duplessie said, ‘ This stuff is so far ahead in its capabilities and performance I can’t see why you would want to do it yourself, unless you already have it baked.‘
From what I see, healthy competition is driving aggressive innovation and adoption of data optimization technology by primary storage vendors. Market forces are working and there is no ‘crisis of innovation’ in this market. What do you think?