I Promise Not To Quote That Old Annoying Dell PC Slogan

I’ve been buying Dell computers for decades, but not really because I loved them. Sure, my XPS laptop was awesome, but it burned out its motherboard and I never really touched the RMA replacement, having bought a MacBook Pro in the meantime. Enterprise buyers seem to have the same ambivalence about Dell. They buy it, but I’m not sure they really “buy” the company as an IT partner.

I’m sure you’ve heard the same comments as me: “Dell just assembles off-the-shelf components and sells them in volume” or “Dell’s a follower, not an innovator.” There seems to be a great deal of respect for Dell’s ability to produce competitive products and sell them at reasonable cost. Truly, most of their competitors would love to have this kind of reputation. But most of their competitors also have a reputation for partnership, innovation, and solution selling.

Dell Is Making An Effort

It seems clear that Dell would like to change this attitude, and they are investing serious resources to make it happen. While acquisitions like Compellent and Force10 raised eyebrows in storage and networking, it is the activity I see behind the scenes that paints the clearest picture. Dell isn’t just buying into new markets, they’re investing to change the company.

When Dell acquired EqualLogic in 2008, many assumed it was a tactical investment to increase margins over the (resold) EMC storage equipment the company was then pushing. Pundits were similarly dismissive of the acquisition of Perot Systems in 2009, calling it a “me too” effort after HP acquired rival EDS. Regardless of the motivations, however, Dell was becoming more of a serious challenger to HP and IBM every day.

After failing to acquire 3PAR in 2010, then picking up Compllent shortly after, accusations that Dell was “mini me” to HP were rampant. But HP stumbled mightily in 2011, and many in IT quickly lost confidence in that company’s management. All the while, Dell moved forward, increasing in-house IP and expanding enterprise offerings.

What Is The Result?

Today, one sees a very different landscape than just last year. Dell’s acquisitions focused on some of the ripest spots in storage and networking, and no one would disagree that the company has the ability strongly to push these products. Compellent and Force10 went from interesting startups to serious contenders overnight.

Dell really pulled out all the stops to tell us they are "Fluid by Design"

More importantly, Dell has retained much of the innovation these companies offered, from employees to support programs. Last week, I attended the Dell Storage Forum in London, an event initiated by Compellent prior to the acquisition. At the event, I talked to many Dell employees who came to the company through acquisition but had now been given power to challenge the status quo in their respective areas.

If Dell really intended only to push product, why retain marketing personnel? Why invest in the Dell Storage Forum? Why continue Compellent’s beloved Co-Pilot support program?

Then there are the products. Dell leveraged its investment in Ocarina Networks to create a deduplicating backup appliance, the new DR4000. They salvaged file system startup ExaNet and are beginning to bring scale out technology to market. The latest revision of the Compellent software finally brings it to parity in terms of VMware support. And Dell is really working to sell their DX Object Store.

This is the sort of activity one would expect from a contender, not a “box pusher”.

Stephen’s Stance

In the words of Malcolm Reynolds, my days of not taking Dell seriously are certainly coming to a middle. Dell is investing in product IP, innovative marketing and PR events, customer support, and personnel. This does not mean that Dell is instantly a player in the enterprise storage and networking markets, or that all this work will pay off. But I don’t laugh when I hear Dell boast that they intend to be a “top three” enterprise storage company in a few years. It could happen.

Disclaimer: Dell sponsored two Tech Field Day events in 2011, paid me as a speaker at two DX events, and paid for my trip to Dell Storage Forum in London. But no one can buy a post on this site, and I did similar business with IBM, HP, Cisco, and many other companies. This is my opinion.

© sfoskett for Stephen Foskett, Pack Rat, 2012. |
Why Should Anyone Take Dell Seriously in Enterprise Storage?


This post was categorized as Computer History, Enterprise storage, Gestalt IT, Virtual Storage. Each of my categories has its own feed if you’d like to filter out or focus on posts like this.

© Stephen Foskett for Gestalt IT, 2012. | Why Should Anyone Take Dell Seriously in Enterprise Storage?
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A Compelling Product

At its core, Compellent is a storage software company. Their Storage Center software creates a “virtual storage array” from standard building blocks. The resulting storage product is one of the most flexible and (excuse the pun) compelling midrange storage systems on the market. Consider the following roundtable discussion from our recent Tech Field Day event in Seattle, which includes a discussion of Compellent’s products and technologies by independent voices in the industry:

Podcast: Play in new window | Download (Duration: 8:59 — 102.7MB)

Compellent’s Storage Center scales up, adding additional storage capacity to existing arrays without disruption and integrating this added bandwidth and capacity seamlessly. Compellent also has an impressive tiered storage and thin provisioning story, since data blocks are virtualized and can be moved between tiers dynamically. Full-featured integrated snapshot technology completes the picture, adding data protection credentials.

Compellent’s scale-out story is impressive as well, but is more about replication and virtualization than the clustering technology used by others, including Dell’s EqualLogic. Compellent’s newly-introduced Live Volume can be thought of as a volume manager for virtual servers, allowing their storage to exist simultaneously on two different storage arrays. Supporting VMware vSphere, Microsoft Hyper-V, and Citrix XenServer, Compellent claims that Live Volume enables a “grid of Compellent arrays”, but it’s not the sort of scale-out grid one would get from EMC’s recently purchased Isilon, HP’s LeftHand, Dell’s Compellent, or NAS specialist Panasas. It’s more of an active-active mirror of storage than a true cluster. Learn more about Live Volume in the following video by Rodos:

Let’s also take a moment to consider the hardware Compellent currently uses: They deploy and sell this software on SuperMicro servers with Xyratex disk enclosures, and Seagate hard disk drives, and connect everything with QLogic, Emulex, and Brocade storage networking gear. This is all pretty much standard-issue for storage vendors: Most no longer produce their own controllers or disk enclosures, and the standard components Compellent uses can be swapped from other sources if needed.

Compellent’s Mid-Market Strategy

Compellent has not traditionally competed in the stratosphere of enterprise storage dominated by EMC’s Symmetrix V-Max, the HDS/HP USP/VSP, and (to a lesser extend) the HP 3PAR InServ. Instead, the Minneapolis-based company has been happy to sell into the fat middle of the market, and has gained a loyal following in smaller-but-still-impressive enterprises. Nowhere is this more evident than at Compellent’s annual “C-Drive” customer conference: It’s amazing, really, for a smallish storage company to have such a devoted user base!

Although they offer two NAS front-ends, Compellent is a block storage player through and through. Their “Storage Center with NAS” offering is decidedly low-end, employing Windows Storage Server 2008 on a 1U server for SMB and NFS connectivity. The newer and more-impressive zNAS is based on the OpenSolaris operating system, including ZFS a friendly interface “co-developed” with Nexenta. Neither product is an in-house Compellent design, nor are they competitive in the high-end “big data” market touted by NAS leaders EMC, NetApp, and BlueArc.

Compellent’s Fit Within Dell

Assuming the acquisition goes through, attention will turn to the fit for Compellent’s Storage Center technology and marketing within Dell. What will Dell get for three quarters of a billion dollars? What will it mean to the enterprise storage market as a whole?

Dell’s EqualLogic acquisition, though expensive, is now widely seen as a success. The Round Rock management team allowed EqualLogic the freedom to develop and compete, while bolstering their hardware and manufacturing story with commodity components. The combination has become a dominant plater in the mid-market iSCSI storage space, and Dell is likely to attempt a repeat of that strategy here. It was widely rumored that 3PAR management preferred Dell’s to HP’s offering based on a promise of similar autonomy.

We assume Dell would replace the EMC-sourced CLARiiON with Compellent in their midrange storage arsenal, replacing the SuperMicro servers. Although Compellent would likely be allowed to develop and grow within the Dell umbrella, there is substantial overlap with the existing EqualLogic line. One would expect Compellent to focus more on Fibre Channel and FCoE (which they recently delivered), though iSCSI support is unlikely to be dropped. A longer-term strategy would see EqualLogic and Compellent combining their midrange storage IP and management team within Dell.

Considering their success selling CLARiiON block storage, Dell’s acquisition would strap a rocket to Compellent’s sales. Once the Dell hardware is grafted in, profits will grow substantially as well. This is a major win for Dell, which needs the kind of margins that only in-house IP can drive. The price is right, the market is ready, and the fit is solid.

What Comes Next

Some are suggesting that this is the end of the storage acquisition parade, but many holes remain. Dell still lacks enterprise NAS, data deduplication, and cloud storage success, and companies like Oracle have only just begun to bulk up their storage strategies. Dell’s acquisitions of Ocarina and Exanet have yet to pay dividends, likely driven by the immaturity of those products. One would not be at all surprised if they continued shopping in the storage space: Panasas, BlueArc, Sepaton, FalconStor, and Overland all look ripe for purchase. Although Compellent is a win for Dell, it is not likely to be their last acquisition.

Disclosure: Compellent sponsored and presented at Gestalt IT’s Tech Field Day 3.

© Stephen Foskett for Gestalt IT, 2010. | Thoughts On A Dell Acquisition Of Compellent
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Who will power the enterprise? The smart money is betting on a few superpowers taking over.

After years spent focusing on personal technology, businesses are increasingly turning back to the enterprise. There are many reasons for this, but the biggest one is the poor economy. Individuals simply have less free cash to spend on gadgets and software, and the meagre profits are increasingly going into the pockets of a single company: Apple.

The corporate IT market is much more dynamic and competitive, with a few very large “superpower” companies discovering their power to drive purchasing decisions. If a supplier can create an integrated “stack” of hardware and software, they can push product purchases that might otherwise be overlooked or postponed. This is the main reason that enterprise IT acquisitions work so well: Where a small company must fight to sell their product, a large one can hitch it to a much more strategic sale and have it pulled along.

The old IBM model is the prototype, with that company once selling everything from office equipment to datacenter gear as well as the consulting and integration services to make it all work.

HP has spent almost two decades bulking up to become the new IBM, buying their way into open systems laptops, desktops, and servers (Compaq), networking (3Com), services (EDS), and storage (Compaq, LeftHand, Ibrix, and perhaps 3Par). HP has been remarkably proficient at executing on this enterprise plan: In talking to enterprise IT folks, I often hear IBM-esque sentiments regarding the new HP. They tell me they’re willing to give HP the benefit of the doubt when it comes to new technologies and products, buying on basis of the company’s reputation and ability to make everything work. This bodes well for the company’s post-Hurd future, and HP has the most-complete “enterprise stack” in the business.

But HP has a target on its back, pinned there by Dell. The folks from Round Rock believe they can be more efficient (and thus profitable) than HP in the same markets, and have been making moves to fortify their enterprise offerings. Dell was always more of a manufacturing than R&D business, but they have shown a desire to broaden their focus. Intrigued by the high-margin mid-enterprise storage business built from their EqualLogic acquisition and their success selling EMC storage, Dell is moving into the enterprise. They matched HP/EDS by purchasing Perot and have made smaller buys in storage (Ocarina, Exanet) as well as the big move for 3Par.

The next big emerging stack player is Oracle. The acquisition of Sun gave Oracle a strong hardware base to complement their command of enterprise software, and many expect further acquisitions. But Oracle is playing a different game than HP and Dell, focusing on the high-margin enterprise space and ignoring more competitive outlying areas. Many suspect the company might make a play in the network space (Brocade, Juniper, and F5 have been mentioned) but storage is possible as well. CEO Larry Ellison is a major investor in Pillar Data Systems, so many expect a spin-in here. But Oracle has the appetite for something much bigger, even EMC or NetApp.

Then there is Cisco, who have attempted to parlay their data center networking strength into a broader position. But Cisco’s halting moves into storage (Fibre Channel switching and SAN extension) did not displace the market leaders, and their server products (UCS) have not made much of a dent on HP, IBM, and Dell either. A solid partnership with EMC has delayed further forays into the enterprise storage market, and Cisco seems puzzlingly interested in low-margin access businesses (Linksys, Flip) and their Cius tablet.

There are other players in the enterprise space as well. EMC has diversified under CEO Joe Tucci, taking a dominant position in server virtualization (VMware) and making a strong enterprise security acquisition (RSA). But the many faces of enterprise storage remains EMC’s strength, and they seem content to partner with Cisco for a stack sale. Hitachi, NEC, and Fujitsu also offer varying enterprise hardware and software stacks, but their comparatively small sales presence in the US market limits their ability to execute. In the final analysis, only IBM, HP, Dell, and perhaps Oracle can claim to be enterprise IT superpowers at this point.

Image credit: Steam Engine by Stuck in Customs

© Stephen Foskett for Gestalt IT, 2010. | Meet the Enterprise IT Superpowers
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The storage industry got a lot more competitive this morning, as Dell announced plans to buy 3Par. This is the latest round in a well-established race for the enterprise storage dollar, challenging superpower (and Dell partner) EMC in the high-end SAN space. What does this acquisition say about the industry as a whole? Where are we headed?

I’ve long wished for a new enterprise storage superpower. Competition is good for everyone, and the enterprise storage space has always been highly competitive. Traditional SAN storage powers (EMC, HDS, HP, and IBM) have been under continual attack from tech-heavy upstarts like EqualLogic, LeftHand, Compellent, Xiotech, and 3Par. The smaller (revenue-wise) NAS market has been more serial, with NetApp knocking off Auspex, then challenged by EMC. Yet innovators have been thick there as well, from Exanet to Ibrix, Isilon to Onstor.

Through it all, one thing has been clear: The major companies, though perhaps lagging in technology, were usually able to withstand the attack of the upstarts through sheer strength of salesforce. Storage is a strategic investment, and selection of a storage platform is much more far-reaching than many IT product decisions. The inertia of an installed storage environment makes it a real challenge to switch vendors, giving the established players massive leverage.

It became clear to me and many others that the best way for upstart companies (and, by extension, technologies) was to be part of an established vendor’s sales process. OEM relationships were a big part of this (witness the success of BlueArc and even NetApp and HDS) but acquisition was a much stronger proposition. If customers were warmer to OEM products than independent sales, they are much hotter when it comes to acquired technology. HP, Dell, IBM, and EMC have all demonstrated the power that comes when an established company buys a startup and puts the power of their sales force behind these new products.

This explains Dell’s fantastic success with EqualLogic. They took a product that was emerging as dominant in its niche (midrange iSCSI SAN) and blasted it into the market, while at the same time optimizing manufacturing and deployment. EMC did the same with Clariion and DataDomain, and HP is showing strong signs of health with LeftHand and Ibrix. Then there is IBM, who took XIV out of Israel and made it a source of irritation to the rest of the industry.

Many industry watchers have long wondered what would happen if the smaller guys got together, forming a new superpower of their own. Would 3Par, BlueArc, and Sepaton be a real challenger? What about Xiotech or Compellent and Isilon or FalconStor? Is mixing and matching some smaller companies a recipe for success? The answer was often a counter-question: What if someone like Dell, who knows how to manufacture and sell, picked them up instead? This seemed much more like a sure-thing, since the established management and financials stave off potential integration issues.

It appears that this is the future. Established players will pick up smaller companies, fortifying their offerings and accelerating sales in a way the little guys weren’t capable of. Dell’s billion-dollar acquisition of 3Par reportedly headed off a similar offer from HP, and will likely spark another acquisition. I imagine the management teams at Compellent and Xiotech just got a lot busier…

Clearly, Dell and HP are playing this game. IBM and EMC are in it, too. But what about Cisco and Oracle? Could they be planning storage acquisitions of their own, to the detriment of partners like EMC and Hitachi? What about the strong contingent from Japan, NEC and Hitachi? And who gets picked up next? We shall see!

© Stephen Foskett for Gestalt IT, 2010. | Dell + EqualLogic, Exanet, Ocarina, 3Par = What?
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For more thoughts on the startup growth process, see my related article, “The CEO Shuffle“

Scaling Out

Panasas, of Fremont, CA, is a provider of network-attached storage (NAS) systems and was founded in 1999 by the legendary Garth Gibson, known as the father of RAID. ParaScale, right down the road in Cupertino, sells a cloud storage software layer and was started five years later by Cameron Bahar of Scale8 and Teradata.

Both of these companies are in the scale-out business, enabling massive file storage systems for the largest applications. Panasas is more traditional, relying on NAS protocols and a clustered file system for conventional applications. ParaScale stepped into the cloud storage territory, combining Linux-based storage nodes into a file store with HTTP, NFS, FTP, and WebDAV accessibility.

The two companies have also seen key competitors scooped up in the last year: Panasas shared the scale-out NAS market with IBRIX (now HP), Exanet (now Dell), and ONStor (now LSI). Earlier this month, ParaScale watched Bycast go to NetApp.

Panasas Names Pairman

Panasas has named Faye Pairman, formerly of 3ware and AMCC, to replace Randy Strahan as CEO. Although Strahan held that position for years, the Register suggests he was a bench warmer brought in by investors, Mohr, Davidow Ventures. The Pairman press release supports this, calling Strahan “interim CEO,” though that term was not previously used by the company.

With IBRIX, Exanet, and ONStor gone, the scale-out NAS musical chairs game is winding down. IBM has its own scale-out NAS offering, SONAS, which is based on their GPFS technology. Symantec released FileStore, their own scale-out NAS product, in October of 2009. HP seems happier with IBRIX than they were with PolyServe, and Dell and LSI won’t likely need any more technology. NAS leader, NetApp, has finally integrated the scale-out technology they acquired way back in 2003 from Spinnaker, and EMC is busy integrating their Celerra NAS and Clariion SAN lines. Perhaps the new SGI or Oracle-nee-Sun are shopping?

But perhaps Panasas has an IPO in mind instead. They claim profitability, and that market is beginning to heat up! And the market is kinder now – witness this quarter’s success for public scale-out NAS vendor Isilon (NASDAQ:ISLN).

ParaScale Gets Fehrnstrom

ParaScale has made no official announcement as of yet regarding their CEO change, the company’s web site shows that Sajai Krishnan is no longer CEO. His replacement is Ken Fehrnstrom, who is said to have managed “business development activities inclusive of acquisitions, equity investments, divestiture of non-core business assets, and partnership programs” at Ascend Communications. Interestingly, the ParaScale bio omits that Fehrnstrom is also the former President and COO of managed storage provider StorageNetworks, a prototype for today’s cloud storage service providers.

Beth Winkowski, ParaScale’s PR contact, confirmed the change in leadership in an email message:

ParaScale has appointed a new CEO, Ken Fehrnstrom, for the next stage of its growth. As ParaScale gains market traction, Ken as a multi-time CEO, stands ready to rapidly scale the business.

Sajai cultivated industry-leading recognition for ParaScale in record time, delivered its first product to market and seen it through several significant new releases, and earned the confidence of many brand-name customers and partners.  He has served as CEO for nearly two years.  Sajai has assisted Ken in his transition before leaving the company.

Note: We initially overlooked the mention of Fehrnstrom’s StorageNetworks tenure in the ParaScale bio. It is, in fact, mentioned there.

© Stephen Foskett for Gestalt IT, 2010. | Panasas, Parascale Shuffle CEOs For Growth
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Like Ibrix, which was acquired by HP under better circumstances last year, and ONstor, similarly scooped up by LSI, Exanet was best known for clustered NAS software. Their ExaStore software, bundled with IBM and Xyratex hardware, put up impressive scalability and performance numbers. Dell will likely leverage this software with their own hardware as a NAS complement to their leading EqualLogic iSCSI line. Exanet’s Xyratex-sourced DX line of Fibre Channel storage devices is unlikely to be at all attractive to Dell.

Rumors of a white knight for Exanet were widespread last year. Fujitsu Siemens Computers was said to be the front-runner in May, and Exanet’s name came up mid-year as HP and LSI made their moves. Dell was apparently willing to put up some money to gain access to Exanet’s NAS technology later in the year but the company’s investors reportedly scuttled that deal. Plan B for the folks in Round Rock seems to have been to wait it out and secure the technology from the now-moribund company. If Dell keeps the doors open, Exanet’s R&D center will become their first such facility in Israel.

The acquisition gives Dell a retort when HP presents their invigorated Ibrix line to enterprise customers. It is likely that Dell will follow HP with a software/hardware NAS bundle possibly featuring their PowerEdge blades. Back-end storage could come from many sources: Dell’s own PowerVault MD line, their EqualLogic PS iSCSI gear, or the Dell/EMC CLARiiON AX and CX lines. Exanet is known as a higher-end scale-out offering (think Isilon or HP’s PolyServe) rather than a general-purpose NAS.

Two key questions arise from Dell-owned NAS software:

1. Would Dell reduce their reliance on Microsoft’s Windows Storage Server, as used in their PowerVault NX300 and NX3000 NAS devices? I suspect not, since Exanet is not a low-end product and Windows-powered NAS has typically sold into a separate market niche. Rival HP has certainly continued pushing Microsoft-powered gear since buying Ibrix.
2. What does this mean for Dell’s relationship with EMC? The company only started selling the EMC Celerra NX4 last year, and a homegrown Exanet/PowerVault solution is not a drop-in replacement. Dell’s relationship with EMC continues getting deeper, and a split is unlikely in the near term.

At this point, this looks like a vote for Exanet’s technology and a reaction to HP’s PolyServe and Ibrix moves, not a statement against EMC or Celerra. Indeed, considering that Dell was merely investigating an OEM relationship before this all fell out, it doesn’t look like a strategic move at all for the company. Exanet will likely become a new line item, but Dell’s storage roster will look largely the same.

© Stephen Foskett for Gestalt IT, 2010. | Dell Scoops Up Exanet After All
Read more posts categorized as Exclusive, Featured, Storage, Top Story