There’s Got To Be a Better Way...to do storage

The days that an IBM rep could walk into a large enterprise and sell hundreds of thousands of dollars of proprietary mainframe equipment (because that was the only choice) are largely over. Most Wintel based hardware and software today is commoditized and prices have accordingly reflected the wide range of choices and interoperability of systems. So whether you buy an x64 server from IBM, HP, Dell or even Sun is largely irrelevant.

This is not to say that companies like SAP, CA, HP and the usual crew still come in with “solutions” rather than products, and try to sell you their “vision” that has a seven figure price tag. One vendor solutions usually turn the customer into what is in gambling parlance known as a whale. And even though there are benefits to sourcing from a single vendor, like stronger accountability and ostensibly lower prices, usually this kind of relationship is to the detriment of the customer. And consequently it is almost always advantageous to acquire “best of breed” systems for non-commodity IT hardware and services rather than be locked into an all encompassing Jack-of-all-trades solution from one vendor.

Yet there is one area in IT where this “solution” mentality still has an iron strong grip: enterprise storage. With discounts of 60-90% being the expected norm on Greenfield installs one can only try to imagine how preposterously high the profit margins on these systems are when bought at standard price down the line. With costs reaching over $50,000 per TB for the most sophisticated SAN systems it’s not uncommon for medium and large enterprises to spend a significant chunk of their capital budget purely on storage and related services. Yet because the data on this storage is so critical, handing over POs for half a million or more to the top tier vendors is the only choice CIOs have today. The problem comes when an end user (or CFO for that matter) questions why your recovery rate is $1000 a month per TB and yet BestBuy is selling 1 TB disk drives for under $500.

Relatively new companies in the storage space like Pillar, LeftHand and Equallogic were all started up on the premise that they would peel back the curtain on this technology space and provide enterprise storage in a more transparent way. Pillar and Equallogic have taken the route of including all (or most) software options with their hardware. Instead of buying $40k of disk, then $40k for snapshot licensing and then being surprised with another bill for $40k for NAS connectivity (and another $40k to license AIX hosts and so on) you get everything in one bundle for one price. LeftHand, on the other hand, has tried to commoditize the hardware by allowing you to choose your hardware vendor and just buy the appropriate software licensing for SAN connectivity. Each approach has made inroads and brought some refreshing change in the industry.

However, until there is standardization on technologies like LUN level replication and disk interoperability, IT shops will be forced to buy monolithic solutions from one vendor or be forced to rip everything out in order to switch. The gilded age for EMC, Hitachi, and NetApp, will only be over when C-level execs stop being addicted to “business solutions” and start doing the hard work of figuring out what vendors are providing value where.

"They just don't get it"

The release of the Xbox 360 and PlayStation 3 has brought about the rumblings of another format war: Blu-ray vs. HD-DVD. One of these two formats is supposed to triumph as the storage medium for next generation, high-definition content that can’t be accommodated on CDs or DVDs. Just like the much discussed VHS vs. Betamax battle, two industry giants are pitted against each other in a battle to convince consumers to buy their disc formats, media players and content.

However, this time the battle is very different. With dual-format players already available it is more likely that multi-format platform will emerge akin to current DVD devices that can accommodate multiple formats. More interestingly though, the idea of buying and renting content on physical media is becoming incredibly passé. In the not to distant future, buying a game or movie on DVD will be akin to buying software on floppies or listening to music on tape.

iTunes is the prime example of where things are heading – ubiquitously available online content integrated with appliances and a killer user interface. The release of Apple TV didn’t really make huge headlines but essentially Apple is validating their past business success and hoping the stalwart media providers are caught sleeping when all of a sudden millions of consumers start purchasing movies and custom digital content online. The current digital and PPV offerings from traditional cable providers are amateurish at best – and in reality indicated that they don’t get what is required for this new way of content distribution to succeed. Companies like Blockbuster and NetFlix, in their current iterations, are walking anachronisms.

This is also why the Xbox 360 is most likely going to win the next generation console wars as well – the online aspect of each game is not a bolted-add on but an essential part of the experience. By distributing their appliance to millions of households and providing a superior online experience, Microsoft is laying the infrastructure for a battle with iTunes and Apple TV. However, it’s not clear that Microsoft has learned the lesson from their disastrous attempt at creating a media player for neither Windows nor the mobile market. Sony on the other hand is still focused on proprietary hardware technologies like memory sticks and Blu-ray – a sign that they are still living in a past mindset.

The company or consortium that can deliver a vertically integrated solution including appliances at the home level, wide range of affordable content and a user interface that is useable by the digital proletariat will destroy they way we currently consume entertainment.

AMD’s Apotheosis

In mid-2003 AMD did what was up until then unthinkable in the commodity microprocessor market: it challenged the monopoly CPU maker Intel by providing a starkly different CPU roadmap while holding only a fraction of CPU market. Intel up to that point tried to transition the market from a 32bit to 64 bit computing by introducing a new architecture, dubbed Itanium. Alas, this new brand spanking new CPU architecture was incompatible with the old x86 instruction set and would essentially require a rewrite of all software to run optimally. Itanium’s high price tag, lackluster overall performance and Intel’s arrogant assumption that customers would blindly follow their technology roadmap eventually opened up a window for AMD.

AMD responded to customer’s thirst for the next generation chip by introducing the Opteron processor that included 64 bit extensions – the AMD64 instruction set. Among other things, the processor was fully backward compatible with the old x86 instruction set. However, the chip was architected with enterprise class features like an onboard memory controller and hyper transport bus that allowed high-speed multiple CPU interconnects. With a team that included many from the vaunted Alpha chip team, the Opteron took AMD to the next level. By 2006, AMD owned a quarter of the CPU market and an even higher fraction of the server microprocessor sub-market. In benchmarks, Opteron ascended to the throne and was king for over 3 years. Eventually, even the most technically ignorant manager could not justify the purchase of Intel’s dead-end products.

Intel’s strategy was clumsy precisely because it bifurcated the processor market into two camps: consumer CPUs would utilize the x86 instruction set while the enterprise sector was to adopt the Itanium instruction set IA64. To this day, Intel stubbornly clings onto the Itanium chip – although it is de facto a dead architecture. However, someone at Intel finally woke up and realized that chasing gigahertz via the discredited NetBurst architecture would end in failure as heat issues and diminishing manufacturing yields were proving. Just in time came the Core architecture and a slew of new chips from the Israeli design center- normally designated to design chips slated for the lowly mobile market.

Essentially Pentium Pro on steroids, the Core microarchitecture is slated to replace the discredited NetBurst architecture throughout Intel’s product line. The Core 2 Duo has managed to unequivocally help regain the benchmark lead in the consumer sphere and the Woodcrest in the two-way server market. To win over the high-end enterprise market, Intel has to jettison the front-side bus with something akin to the common systems interface (CSI) present in the Itanium. Rumored to be introduced by 2008, the CSI may finally turn the Xeon into all-benchmark champion and bona fide enterprise level chip.

AMD has to respond to the awakened giant by mid-2007 by answering the fundamental benchmark challenge and the ever increasing multi-core requirements. Already behind by six months with its quad core processor, AMD is also behind in manufacturing capabilities (it still hasn’t transitioned to a 65nm process from the current 90nm). While AMD’s improved K8L architecture, to be introduced this summer, will provide some relief with true quad-core processors, the real battle is yet to come…