NetApp has an existing relationship with IBM where IBM OEMs NetApp filers for their “N-Series” product line.  These products are virtually the same as what you can buy from NetApp directly.  However, the big difference is that they can be sold, quoted and supported by IBM.  IBM does have their own higher end NAS products called SONAS, but the N-series is still an important part of the IBM portfolio.  Clearly this relationship is an important one for both companies.

Engenio is also an important part of IBM’s portfolio since IBM uses Engenio for the DS4000 and DS5000 mid-range disk products.  Like the N-Series, these products are created by Engenio although IBM takes a more active role in customizing these platforms.  Like NetApp, this relationship is an important for IBM since these solutions directly address the mid-market space.

There is an interesting similarity here.  We have two companies both of which have important relationships with IBM joining forces.  If you are IBM, you probably view this as a mixed blessing.  Clearly, post-merger, IBM can feel good about the improved consistency and longevity of two key suppliers, but Netapp/Engenio will also have greater negotiating leverage which could impact product costs and profitability.  At the same time, if IBM were considering an acquisition, the combination of NetApp and Engenio would be more interesting than either company alone.

From a NetApp perspective, the merger with Engenio strengthens their relationship with IBM and brings a new family of block-based storage systems.  However, I believe that it also enhances their value as an acquisition target.  It is obvious why IBM would want to acquire them, but third party Engenio OEMs could be interested as well.  These companies have already invested in Engenio technology and acquiring a combined NetApp and Engenio would instantly provide a credible storage portfolio with a broad range of products.

The combination of Engenio and NetApp may create technical challenges due to the need to support multiple controller technologies, but I believe that the combined entity enhances NetApp’s position as a possible M&A target.  IBM would be a natural player, but the other Engenio OEMs would be interested as well.

LSI’s primary go-to-market model has always been through OEMs and so they needed to have solutions that were feature rich enough to create a compelling value.  Obviously, their disk arrays have the basic table stakes such as replication and snapshots, but Engenio was trying to do more.  They wanted to create a modular array that could be extended with advanced software functionality to provide a unified storage platform.  They acquired StoreAge with a goal of bringing storage virtualization into their controller and later OnStor to embed NAS functionality.  Thus the end goal was clear – create an advanced RAID controller that could compete with the industry leaders and leverage their OEMs to go to market.  Interestingly, this model is more similar to NetApp’s strategy then you might think.

NetApp’s core strength is their ONTap OS which powers their storage devices and incorporates the ability to provide simultaneous block and file access and a variety of other advanced software features.  ONTap has been the key enabler of NetApp’s success and it is a technology that other storage vendors try to emulate.  The same core ONTap technology is used throughout NetApp’s product line which allows them to better leverage their development efforts.  From an architectural perspective, ONTap and its related applications (snapshot, replication, WORM, etc…) reside inside the NetApp head along with RAID functionality and the disk shelves in the system are simply JBODs.  NetApp also sells a gateway product called the V-Series which is a head running ONTap which sits in front of third party RAID storage.

Looking at Engenio and NetApp’s product lines, it is clear that there is quite a bit of overlap.  NetApp’s business is enabled by ONTap and the ability to provide efficient and powerful software features in their controllers.  Engenio was trying to do the same thing.  Why would
you want two different controller architectures to solve the same problem?  

If NetApp does keep the Engenio controller architecture they risk diluting engineering efforts.  Prior to Engenio, all engineering could be focused on ONTap and related software applications.  Post Engenio, (assuming they keep Engenio’s controller technology) they will have to maintain two entirely separate controller architectures and code-bases which creates management complexities and dramatically weakens the ONTap everywhere story.

One Twitter user suggested that they could use NetApp V-Series heads with Engenio storage.  That is absolutely true, but why would you?   A V-Series head brings all ONTap functionality (snapshots, replication, WORM, etc…) to any supported storage and by doing so you no longer need those features in the disk array.  Thus back-end storage for V-Series becomes a basic RAID-only solution.  In the case of Engenio, the V-Series would turn an Engenio system into a commodity RAID device with none of the advanced features that Engenio has acquired or developed.

One industry analyst suggests that the acquisition is good because of the profitability of Engenio’s OEM model.  Perhaps, but you have to wonder how the OEMs will react to this.  If I am an actual or potential competitor to NetApp will I still want to OEM Engenio?  It makes you question the longevity (and profitability) of the OEM business.

All of the issues above makes you wonder why NetApp bought Engenio.  Why do you think they did it?  Stay tuned for my hypothesis in part 2 of this post.

I mention all of the above to provide context to Quest’s acquisition of BakBone.  For those who are unfamiliar, BakBone is a backup software provider that plays in the low end of the market.  They position their product, NetVault, as a full service backup application that includes traditional backup, CDP and deduplication.  They have had limited success in the US and Japan appears to be their strongest market.  Their technology was spun-off from AT&T labs.  (As an aside, CommVault was also a spin-off from AT&T Labs.  Those lab guys must have been doing some amazing backup stuff!)

One of the main questions in the blog discussion was how the dedicated VMware backup providers, Veeam and Quest, could compete over the long term with the entrenched backup ISVs who have massive installed bases and larger sales and engineering resources.  Veeam’s position (as described in their post) was that they would stay focused on VM data protection and innovate rapidly thus maintaining a consistent leadership position.  Quest’s response suggested that they wanted to move beyond VMware-only data protection to backup physical servers as well.  The BakBone acquisition is a natural embodiment of this strategy.  However, the acquisition creates new challenges.

The two biggest challenges for Quest are competition and engineering.  The addition of BakBone elevates Quest from a niche player that protects only VMs to a full backup application provider.  Companies that once ignored them such as Symantec, IBM and others will take note.  If the incumbent ISVs see Quest taking marketshare with NetVault (e.g. becoming successful), you can bet that the incumbents will aggressively counterattack with take out programs and other incentives.   The engineering outlook is equally challenging.  Post acquisition, Quest must aggressively innovate in both VMware data protection and physical server protection. VMware innovation should not be a problem, but differentiating in traditional backup is much more difficult since the market is relatively mature and NetVault has had limited success.  The process of integrating vRanger and NetVault must also begin immediately which further adds to the burden.

In summary, it is clear why Quest acquired BakBone – they see a future of combined physical and virtual server protection.  However, you have to wonder whether Quest is spreading themselves too thin.  It is hard enough to do one thing really well (VMware protection) and now they have increased the challenge dramatically by adding NetVault and all of its related agents and features.  Additionally, the incumbent backup ISVs are likely to attack aggressively if threatened which could hinder success. However, there is a large revenue opportunity if (a big if, in my opinion) Quest can pull this off.  Only time will tell if they are successful.

SEPATON’s future continues to look bright with lots of cool new features under development.  I would love to tell you about them, but, well, I can’t and you will have to wait and see! 

The big news is that I will be starting next week at HP here in Massachusetts and helping them market their D2D, VLS and physical tape products.  It is an exciting job with great future potential and the partnership between HP and SEPATON on the VLS means that I will continue to collaborate with the SEPATON team.

The great part is that my role will continue to revolve around data protection, and I anticipate continuing this blogging experiment that began over two years ago.  It is not clear whether I will be posting here or on HP.com, but rest assured, I will be pondering the same issues and providing my continued perspectives on all things data protection.

I wish nothing but the best for SEPATON and all the great people who work here.  It has been a fantastic six years.  I am looking forward to the new challenges at HP and helping further increase the success of HP’s data protection platforms.

Note: Regardless of whether I post here, you can always reach me via the contact form on this blog or on my personal blog (e.g. non-data protection) at www.livens.org.

Recovery Time Objective

This is a critical metric for illustrating the risk of potential downtime.  SNIA defines the term as follows:

The maximum acceptable time period required to bring one or more applications and associated data back from an outage to a correct operational state

Thus RTO is a measure of how fast data can be recovered.  As you can imagine, there are a range of options for reducing RTO and in general, the shorter the RTO, the higher the cost.  Common solutions for RTO reduction include, disk-based backup, CDP technology and array-based snapshots.  Each of those approaches bring a benefits in RTO, but may add capital expense and operational complexity.

The other element to consider is that not all applications should be treated the same.  For example, RTO requirements on a mission-critical Oracle database are likely to be very different from those on filers holding personal data.  In the former case, a lengthy outage could dramatically impact the business while in the latter, it could cause annoyance with a minimal business impact.

When considering a solution you should look at its RTO metrics and analyze how they align with your business objectives.  Additionally, remember that RTO and product cost are often inversely related and so while a short RTO might be nice for all applications, the resulting costs may not meet your budgetary requirements.

Recovery Point Objective

RPO addresses the granularity of recovery and the frequency of backup.  SNIA defines it as follows:

The maximum acceptable time period prior to a failure or disaster during which changes to data may be lost as a consequence of recovery.

The question to ask yourself is, “how much data can I afford to lose if an outage were to occur.”  In the traditional nightly backup model, you are potentially at risk of losing up to 24 hours worth of data.  You could reduce the RPO by performing more frequent backups during the day.  Alternative approaches include CDP or snapshots.  However, these can add cost and complexity.

Like RTO, RPO requirements can vary by application.  Critical applications with large change rates may require shorter RPOs versus infrequently changing lower tier applications.  Meeting these divergent needs typically requires different approaches to creating data backups.  However, in general the more granular the RPO, the more expensive the solution.  Thus, RPO must be reviewed in the context of application criticality and budget.

Summary

RTO and RPO are critical metrics for today’s data protection environments, and choosing the appropriate approach requires a detailed understanding of the environment and business objectives.  It is often useful to combine solutions to achieve RTO and RPO requirements while managing total costs.  A classic example is utilizing frequently daily snapshots for short-term RPO and RTO while still relying on full backups nightly for longer term retention.  The full backups enable you to limit the number of snapshots retained which can reduce costs and environment complexity.  A SEPATON solution can address these challenges by improving RTO in the traditional backup process and potentially improving RPO by allowing for less impactful intraday backups.  It will provide these benefits at a cost that is much less than alternative approaches.

As my readers know, I believe that data protection is critical.  Companies must ensure that backup and recovery operations are completed in a timely and effective manner or they are at risk for an outage.  The idea of reporting on the efficacy of backup and recovery operations is a critical component of understanding whether data is protected.  Clearly all backup applications embed some level of reporting to provide this information, but is it enough?

Each customer has different reporting needs and requirements and the base reporting functionality included in all backup application is likely sufficient for many environments.  However, there is an ecosystem of companies (including the backup ISVs themselves) who sell very granular reporting tools.  These applications provide much richer reporting and often incorporate broader monitoring of other datacenter components.  These features are valuable, but the benefit likely varies by end user.  The basic functionality may be sufficient for smaller, homogeneous environments while larger datacenters with disparate hardware will likely see more value from advanced reporting.

This situation has made me wonder how my readers manage and report on their data protection environments, and I created the survey question below to gain your insights. 

Thank you in advance for your participation; all comment feedback is welcome too.

The first situation occurred at the Virginia Information Technology Agency (VITA), the organization that provides IT for the state of Virginia.  Jon Toigo has a detailed post on the event and the agency has a site dedicated to the outage.  In summary, on August 25, 2010 a critical disk array experienced a problem which was compounded by human error and resulted in total data loss. VITA was forced to initiate a complete recovery from physical tape, and a week later, the system was not fully online.  Eventually, VITA successfully recovered about 97% of their data and the remaining 3% may be gone forever.  The combination of data loss and an extended outage reflected poorly on VITA, their subcontractors and suppliers, and resulted in the Governor of Virginia calling for a third-party investigation.

The second situation impacted Chase Bank’s online banking systems and occurred on Monday, September 13.  During the 48 hour outage, Chase’s online banking systems were inaccessible resulting in extreme customer frustration.  The Register has an article on the subject. To summarize, the database software used for the online banking system experienced an error resulting in unrecoverable data corruption.  The same corruption was replicated to the hot backup making it unusable as well and so Chase was forced to recover from their offline media.  They restored the full backup from Saturday and rolled forward the transaction logs.  The result was a complete recovery albeit with longer then desired downtime.

Both of these examples serve as important reminders that data loss can occur at any time.  The sources of these outages can include hardware, software and human error and is often a combination of these.  When losses occur, the resumption of operations depends on the ability to rapidly recover data.  Both VITA and Chase suffered from slower then desired recovery times and extended outages.  Clearly, the longer the downtime the greater the business impact and in both cases, the entities have had to deal with strong backlash from their constituencies.

Extended outages like these must be avoided.  In order to assess restore risk, end users should closely analyze their recovery time objectives (RTO) and ensure that they choose technology that aligns with their requirements.  A high performance disk-based backup solution like a SEPATON S2100-ES2 can assist in this area by providing recovery speeds of up to 17.3 TB/hr and the reliability of a highly redundant architecture.  Users must also remember that recovery tests are critical and should perform complete restore tests periodically.  The goal is to ensure that RTO requirements are met and that the appropriate critical data is being protected.  The combination of these two strategies will not prevent outages, but ensure that a company is prepared when one occurs.

In the storage industry, social media participation varies.  On one extreme, we have companies like EMC or NetApp who have embraced the medium with a large number of active Twitter participants and bloggers.  The broad range of content and opinions suggests that both companies give employees great leeway. (Although it appears that the amount of freedom varies by division.) However, there is a downside.  At times conversations can devolve into competitive fighting that benefits neither party.  These discussions are frustrating and I know of people who have stopped following argumentative Twitter participants from both companies.  These spats are a byproduct of openness, and would be avoided if the companies implemented stronger controls.  However, by allowing open discord, individual personalities can flourish thus creating a more engaging social media experience. 

While EMC and NetApp are highly active on Twitter, there are plenty of companies in the storage and data protection industry who have limited involvement. It is not clear whether the limited participation is due to a lack of recognition of the importance of the medium or perhaps a Dilbert-like scenario where corporate policy or legal requirements prevents participation.  Social media represents an important outlet to interact with end users, peers and colleagues and I believe that companies who are not participating are missing out on an opportunity.  I understand the fear of trying something new or being involved in a competitive fight, but social media enables new connections that are difficult, if not impossible, to recreate using other mediums.

The problems described above are typically found in large companies that are slow to adopt to new mediums and marketing outlets.  Smaller companies, like SEPATON, typically have an advantage because they are often more agile and willing to try new approaches.  In the case of my employer, SEPATON, I started this blog over two years ago and began tweeting soon thereafter.  It has been a great experience and the numerous interactions with other industry participants has been extremely valuable.  I can say with absolute certainty that social media including Twitter has facilitated many new relationships.

In summary, I believe that social media participation is very important.  It can increase corporate recognition and drive new interactions with current and future customers.  While some companies have an open approach which may not be right for everyone, the strategy of ignoring the outlet is not a recipe for success.  Companies must choose the strategy that works most effectively for them, and I am fortunate that SEPATON has embraced a model of openness.  Companies who are struggling with social media would be well-served to remember that their employees represent them every day in phone calls, events, meetings and webinars.  If you trust your employees to represent you in daily activities why not in social media?  I know that this is a struggle for many companies, but remember if you are not participating, your competitors likely are.

I agree with Curtis’s detailed analysis of CDP technology, but my point was simply that three years ago CDP was hot.  Regardless of whether, there were 5 or 5,000 customers, the technology was the talk of the industry.  At the time, new CDP vendors were frequently appearing and existing companies were trying to position their solutions as “CDP-like”.  The hype machine was in full motion and it spanned the industry.

Curtis and I agree that not many systems were sold and that the buzz far exceeded the substance.  When the hysteria cooled, few of the companies were left standing with the majority of them either being acquired by larger vendors or disappearing.  The acquirers packaged these solutions into technologies that are available today such as RecoverPoint from EMC (Kashya acquisition) or Symantec’s NetBackup RealTime (Revivio acquisition).  These larger vendors are well positioned to sell the solutions since they have a substantial installed base of data protection customers.  (Symantec has a better position since the technology is an add-on option for current Backup Exec users.)

My post suggested that a similar consolidation could occur in the VMware backup space.  Server virtualization is an incredibly hot area and protecting VMware servers is a huge problem with real pain.  Backup vendors must recognize the disruptive nature of VMware data protection and the importance of optimizing their applications for virtual datacenters.  At the same time, VMware has acknowledged the challenge of protecting virtual environments and is developing new technologies (such as VADP) to simplify the process.  The incumbent backup ISVs will adopt VMware’s new technologies and will leverage their existing customer relationships and footprints.

The new VM-centric backup providers are in an interesting position between incumbent backup ISVs with large installed bases and broad support for physical and virtual environments and VMware.  VMware is enhancing VM data protection with features like VADP and the backup ISVs are trying to enhance their products through VADP support and other technologies. The VM-focused companies must differentiate from both.  They have better technology today, but will improvements by both VMware and the backup ISVs erode that leadership?  (VMware through VADP and ISVs through their backup apps.)  The problem that the VMware backup vendors face is the challenge of “good enough.”  They must innovate well beyond what VMware and the backup ISVs can offer or risk being disintermediated by the larger companies who have massive sales teams and installed bases and solutions that are “good enough.”

Revenue growth is a key metric that will be used to assess the success (or lack thereof) of the 3Par acquisition.  In order to accelerate top line growth, HP cannot just replace EVA and XP sales with 3Par; they must find new avenues for the technology.  Some options include:

• Managed Service (Cloud) providers:  3Par developed unique technology to address this market and 7 of the top 10 infrastructure-as-a-service providers relied on their storage.  HP must continue to pursue managed service providers including HP’s own ES division (formerly EDS).  The credibility and relationships that HP brings as an computing infrastructure provider could enable them to accelerate market penetration and establish an integrated leadership position in this hot market.
• Net new customers: HP must leverage their existing brand and market presence to aggressively sell 3Par technology.  3Par was an early supporter of VMware’s storage APIs and HP could position the new technology as a VM optimized storage platform which would align nicely with their blade server agenda.   To be successful, they must find new opportunities where these message would resonate. 
• Improved competitive positioning: The new technology could allow HP to battle more effectively with competing storage providers.  In this scenario, HP does not necessarily need to create new opportunities, but be more competitive in existing ones.  For example, if today HP wins 30% of competitive situations then you would expect that to increase with 3par.  If their win rate increased to 60% then they would double their revenue.  However, this improvement will take time and will likely be less impactful than the first two.

Revenue growth is critical, and must be considered in the context of profitability.  Profits impact the bottom line and represent the difference between the revenues generated and associated costs.  Every sale (assuming that it is profitable) generates margin, and so net new revenue will increase margin dollars.  However, HP has an opportunity to improve margin percent or, alternatively, reduce costs.

As previously discussed, replacing EVA and XP sales with 3Par will have a limited revenue impact.  However, there is potential for margin improvement by replacing XP sales with 3Par.  XP technology is manufactured by Hitachi Ltd in Japan and HP purchases complete arrays which they re-brand and deliver to end users.  Thus, HP’s cost for the XP is higher than it would be for a wholly owned technology like EVA and now 3Par.  The result is reduced profitability on XP sales.  If HP could replace XP sales with 3Par technology with no revenue change, then you would expect margins to increase which would translate into bottom-line profit improvement.  Thus, HP has a near term incentive to convert XP business into 3Par business and aggressively promote 3Par in lieu of XP.

In summary HP has made a substantial statement about the potential for 3Par by bidding over $2B for the company.  They clearly believe that they can drive increased revenues and profits by integrating the technology into their storage portfolio.  This post highlighted some areas where HP could recognize immediate benefits; however, it is yet to be seen whether HP can realize these gains.  Their success depends on the ability to effectively integrate 3Par’s technology and people into its storage group.