Forecast: Shakeups Looming in the Cloud

There are a number of rumblings in the cloud. One IT behemoth is believed to be eying a strategic acquisition of a powerful cloud software and storage offering, another seems to be repositioning an existing product, and VCs sharpen their focus on what really adds value in the cloud. There are a number of pivotal events that I believe will transpire over the next year in this rapidly changing and expanding market. From start-ups to behemoths, there will be significant changes that will shake up the cloud.

Prediction #1
Atmos becomes the next Invista. Okay, my last blog mentioning EMC generated some heated comments, and there is no doubt that this blog may generate even more. For those that sell Atmos, you have done great work to develop and bring new technology to a market that has been hungry for cloud products. For those that have deployed Atmos, I am sure you have the full support of EMC behind you and that any product mix changes by the vendor will be integrated into your overall strategy.

However, I have spoken to a number of distributors and IT customers who have gone through both the paper analysis and actual proof-of-concept testing of Atmos. Given the choices available in the market today, nearly all of the IT customers chose to deploy other storage solutions. Why? Simple answer: They have a requirement to scale past 100 million objects. The customer that chose Atmos had no such object number requirement, but did have applications built to use Atmos' type of interface.

The distributors I have spoken with tell me that it is their opinion that "EMC will pull Atmos from the channel and move to isolated sales via their direct sales channel." I am told it is because of the error codes it spits out once the limited object store goes beyond 100 million objects. The distributors informed me that it was "becoming increasing more difficult to position the product within environments that need massive scale-out capability."

100 million objects may sound like a lot. In actuality it is not much given today's massive data storage requirements. This is especially true when you consider that a single Web-based company--even a single department of an entertainment company, for example--can have over 400 million JPEGs that need to be stored in the cloud. Given the recent acquisition of Isilon by EMC, it's my opinion that EMC will move Atmos' development into the Isilon team and integrate Atmos' object store within the Isilon Clustered File System.The 100 million-object limit would certainly need modification given the continued explosion of unstructured data creation and demand for highly flexible storage. EMC has stretched as far as it can with Atmos and now will recoil to Isilon. This reminds me of EMC's approach to a bygone product, Invista--a great idea for storage virtualization, yet, unfortunately, ahead of its time.

So, I suppose you heard the prediction here first: Atmos will become the next Invista--a quietly retired product that no doubt blazed a trail for others and for newer technology from EMC.

Prediction #2
Oracle is poised to deliver real cloud, and is stirring up the electrons and creating enough static to create considerable thunder and lightning in the cloud. Oracle has been somewhat catatonic, and has continued to insist that cloud resides inside of its Exalogic boxes, which, in my opinion, are the direct opposite of a cloud approach in the first place, with their pay-up-front-and-I'll-drop-some-hardware-on-your-floor-type business model.

After a number of discussions with IT customer organizations and channel partners, I am led to believe that Oracle will rise out of its slumber, stop cloud-washing  its existing cluster file system-type software, and acquire a company with a massive cloud object store. Once Oracle makes the acquisition it will have the ability to support over a billion files, consumption-based billing and secure multitenancy. It will layer all this atop its existing Red Stack--a very powerful combination.

Dell, HP, IBM, NetApp and EMC should make some strategic moves before Oracle executes in the cloud space and comes out charging with a hurricane of a product.Prediction #3
I have spoken with a number of VCs and, based on their feedback, estimate that over $130 million has been injected into cloud gateway companies such as Nasuni and Cirtas during the last six to 12 months. These vendors make products that move data from your data center into the cloud. VCs may soon realize (and some already have) that investing in these kinds of technologies may be the economic equivalent of investing in startups that move your data from your data center storage to your tape library. Nobody charges for moving data to your tape library, so why would you pay for data to be moved to the cloud? There would have to be an exceptionally compelling reason to do so.

VCs may have gotten too excited about the term "cloud storage" and invested in parts of the cloud that are actually features--not actual business-critical capabilities. Some people forget that these cloud gateway suppliers don't actually store anything, and I think VCs will sharpen their focus and redirect their investment dollars more toward actual cloud storage startups delivering innovative business solutions for IT customers--the type of technologies that customers actually entrust with storing and protecting their data--and less toward those that are adding to IT cost without clearly demonstrable ROI. Gateway technology startups are good candidates for acquisition--more for their technology than for the business model.

More cloud predictions will follow throughout the year. In the meantime, what are some of your predictions for this space? What products are you having success with?

(EMC, Oracle, Nasuni and Cirtas are not past, or present, clients of Tom Trainer or Analytico.)