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Storage market trends of 2017: Flash, HCI and cloud gain steam
Disruption in the enterprise storage market appears unlikely to subside anytime soon. AI analytics, cloud, HCI, mergers and NVMe flash highlight key themes heading into 2018.
Obvious statement alert: Enterprise storage market trends point to challenging times ahead for vendors.
Rack-scale flash, hyper-converged infrastructure and hybrid cloud have emerged as legitimate alternatives to the traditional ways of buying, deploying and managing storage. Placed on a bell curve, the rise of these maturing storage options would intersect with a steady drop in the use of disk-based external storage systems.
Even as the enterprise storage market trends away from traditional networked storage, industry-shaping mergers are shaking things up. The demise of storage hardware may be greatly exaggerated, but software-defined storage is closing the gap. Despite all these changes, launching a successful storage startup is tougher than ever, with venture capital becoming increasingly scarce.
Here is a look back at some of the major developments in enterprise storage during 2017, and what lies ahead in 2018.
Merged Dell EMC in its infancy, but already a flash Goliath
Dell EMC capped off its first year as a merged company trying to figure out how to reverse its slumping legacy storage, particularly its midrange systems. Mirroring changes felt across the industry, Dell EMC generated less revenue year over year from networked storage, helping No. 2 NetApp gain ground on its longtime rival.
Dell EMC's answer: double down on emerging technologies. A string of all-flash product rollouts was highlighted at the Dell EMC user conference in May, including flagship upgrades to high-end VMAX and XtremIO arrays, as well as the first all-flash model of Dell EMC Isilon scale-out NAS.
Dell EMC closed out the year by launching an all-flash version of its SC Series arrays in November, a follow-on release to its SC hybrid arrays. But not every all-flash product was a hit. Dell EMC claimed its DSSD D5 rack-scale flash array would deliver knock-your-socks-off performance, but that speed came at an extremely high price; the product was shelved due to poor sales.
Dell EMC is also a major player in the rapidly growing hyper-converged market. The vendor has had success selling both the VxRail appliance, based on its own technology, and the XC Series, which packages hyper-converged pioneer Nutanix Inc.'s software on Dell EMC PowerEdge servers.
Looking ahead, we may see more drastic changes in 2018 now that long-time EMC executive David Goulden is out of Dell EMC. Goulden led the premerger storage business at EMC, and served as CEO of the Dell EMC Infrastructure Solutions Group after the merger. Goulden's presence provided Dell with some much-needed continuity as it absorbed the multibillion-dollar EMC storage business. How Dell EMC replaces Goulden's institutional memory is one storyline to watch.
Storage industry preps for rack-scale NVMe flash
If 2016 was the year of all-flash, you could argue that 2017 emerged as the year of nonvolatile memory express (NVMe) flash. NVMe is an industry standard for using PCIe-connected SSDs to speed the performance of storage networks. The principle behind all-flash NVMe is that SCSI commands written for hard disk drives are inefficient to handle many modern, high-performance workloads. Analysts say NVMe flash is the presumptive favorite to supplant SAS- and SATA-based SSDs.
Enterprise storage market trends in NVMe have typically involved all-flash array vendors adding support for NVMe SSDs. Kaminario, Pure Storage, Tegile Systems and Tintri Inc. introduced NVMe-based flash systems in 2017.
In most cases, storage vendors make NVMe flash the back-end connection between controllers and drives, retaining host connectivity with Fibre Channel or SCSI. The next evolution is rack-scale systems designed with NVMe over Fabrics (NVMe-oF) technologies, which would enable low-latency NVMe flash to be extended end to end across the data path.
NVM Express Inc., the vendor-driven standards body, unveiled protocol version 1.3 of NVMe-oF in June. Several NVMe flash startups joined the pursuit this year, including Apeiron Data Systems, E8 Storage, Pavilion Data Systems and Vexata. Signs point to increased NVMe flash adoption in 2018, but how much is unclear. Industry experts say across-the-stack NVMe standardization is likely at least a year or two away.
Also in flash this year, Intel introduced its long-awaited Intel Optane SSD family, based on the 3D XPoint memory technology it developed with Micron Technologies.
Storage infrastructure smartens up
One of the hottest enterprise storage market trends to track in 2018 is the rising prominence of artificial intelligence in the data center. Vendors are starting to integrate AI-based analytics engines directly into the storage layer, providing insight on sizing, potential bottlenecks and looming performance issues.
But analyzing storage performance is only part of the equation. AI combines parallel processing and intelligent algorithms for analyzing data in context. Serverless computing, containerized application microservices and proliferating internet of things devices have all contributed to AI's growing popularity.
Applications with embedded machine learning are able to automate a greater number of data center tasks. DevOps organizations are using AI-powered computing devices to rapidly analyze big data streams in real time. The goal is to mine more value from existing data sets and metadata.
Hyper-converged infrastructure gains wider appeal
Hyper-converged infrastructure (HCI) leader Nutanix made several moves to woo VMware customers to try its Acropolis hypervisor. An OEM deal has enabled IBM to sell Nutanix HCI software on its Power Systems servers -- the first non-x86 server platforms it has qualified. Nutanix hasn't fully abandoned its branded hardware model, but may be headed in that direction.
Nutanix's early HCI rival, SimpliVity, had less success in the market, and Hewlett Packard Enterprise (HPE) bought out SimpliVity for $650 million in early 2017. SimpliVity's OmniStack software enables HPE to integrate data reduction and redundancy features that its Hyper Converged 250 and Hyper Converged 380 HCI offerings lacked.
Cisco snapped up HCI software partner Springpath for $320 million, ending rumors that it planned to acquire Nutanix. Springpath provides software-defined storage for the Cisco HyperFlex HCI platform.
Open source vendor Red Hat tossed its hat into the HCI ring, as well. Red Hat Hyperconverged Infrastructure is a software-only product that runs the Gluster file system on commodity servers.
In a long-overdue move, NetApp belatedly entered the hyper-converged battle with its NetApp HCI platform based on its SolidFire branded all-flash arrays and Element OS quality-of-service software.
Investors lose patience with storage startups
Tightened capital markets made for tough sledding for several once-promising startups. Several vendors went belly up when the money ran out, including three companies that once earned a spot on the SearchStorage.com startups to watch list: Coho Data Inc., DataGravity and Formation Data Systems.
Software-defined storage startup Formation Data dropped out of sight in May, victimized by its failure to differentiate itself in a fast-growing -- and suddenly overcrowded -- market.
DataGravity proved that having executives with a history of storage success does not guarantee sustained success. Founded by Paula Long and John Joseph, DataGravity launched in 2014 by selling data-aware Discovery Series hybrid storage arrays. Long and Joseph were part of the management team that joined Dell following its $1.4 billion acquisition of iSCSI SAN pioneer EqualLogic in 2008.
DataGravity abandoned the Discovery Series hardware in 2015, shifting its focus to storage software for virtualized storage arrays. The new strategy didn't help. In July, DataGravity was scooped up in an asset sale by cloud security specialist HyTrust.
Scale-out NAS vendor Coho Data was once a darling of venture and institutional investors, racking up $76 million to develop its NFS-based hybrid DataStream arrays. Despite striking OEM deals with server makers HPE and Supermicro, Coho Data succumbed to ascendant enterprise storage market trends as more users embraced the cloud, converged and hyper-converged infrastructure. In September, without fanfare, Coho Data quietly pulled the plug on its operations.
After its launch in 2003, Diablo Technologies racked up nearly $100 million to develop its flash DIMM and Memory1 flash storage memory modules. Diablo also scored 2014 OEM deals with IBM and Supermicro to sell its flash cards. Diablo started 2017 on a high note, winning court victories in a contract dispute with Netlist, its former development partner. They turned out to be Pyrrhic victories, though. The legal battles ended Diablo's momentum and, by August, the vendor ceased operations.
Investors haven't pulled completely away from storage, but the big funding rounds are now going to cloud backup, converged storage and data management startups.
Storage hardware loses ground to software-defined storage
Despite Formation Data's demise, software-defined storage continues to chip away at legacy hardware dominance. That continues the server-based storage market trends that started several years ago. Most array vendors are downplaying the importance of their hardware, styling the products as data management platforms or cloud arrays for running their proprietary software.
An example is Tintri, which went public in June with a $60 million stock sale. The Tintri offering faced stiff headwinds from the start. Tintri conjures memories of Violin Systems LLC, an all-flash array pioneer that staggered into bankruptcy, only to re-emerge with fresh capital in 2017. Violin's new plan: Target all-flash arrays at companies looking to build on-premises private clouds -- the same business model Tintri is trying to execute.
