Storage Networking's Heaviest Hitters

Sources believe various dynamics resulting from the proposed alliance between Brocade and McData have significantly hindered business at McData... More specifically, supply chain slowdowns, and distracted and/or departing sales resources lead us to believe that McData's performance in the quarter is tracking well below expectations.
(See Kelley Gets 1.1M Reasons to Stay.)

Contacts indicate IBM remains aggressive in storage through solution bundling and pricing tactics.
(See IBM Debuts Low-End SANs.)

Having never really established a significant revenue presence, sources indicate HP is discontinuing the sale of its McData sourced switching products... Across our checks, sources have pointed to stronger presence from both Brocade and Cisco at the expense of McData. Brocade in particular appears to have reengaged the channel in an effort to build out its branded business and emerging market offerings.
(See HP May Dump McData, Sources Say.)

We believe Dell is the new [Overland] OEM and the product is targeted at price sensitive applications.
(See Overland Grabs New Partner.)

We believe LSI and Emulex are discussing a variety of strategic scenarios, including a combination... We feel the recent management changes at LSI signal forthcoming modifications or enhancements to the company's strategic roadmap.
(See Analyst Sees Emulex/LSI Combo.)

...WAFS has quickly emerged as a strategy technology within vendor portfolios. Contacts report HP already selling and close to announcing an agreement with one of the other remaining WAFS vendors to resell their technology within HP solutions.
(See HP in Deal With Riverbed, Sources Say.)

Few organizations can be credited with almost single-handedly putting a new technology on the map, although this is exactly what Wal-Mart and its CIO Rollin Ford are doing with Radio Frequency Identification (RFID). (See RFID Rocks Back-End Storage and Middleware Players Eye RFID.)

RFID works by using tags that emit radio signals on a specific product or package. "Reader" devices then pick up these signals, enabling the products to be tracked. Unlike barcode technology, RFID does not require direct contact, or what is known as "line-of-sight" scanning.

The world's largest retailer got this ball rolling when it gave its top 100 suppliers a January 1, 2005, deadline for RFID compliance, and the company has since extended this mandate to hundreds of other key suppliers. Wal-Mart now expects to have around 600 suppliers working with the technology by January 2007.Ford, the retailer's former vice president of grocery logistics, took over as CIO from Linda Dillman earlier this year. He lost no time reaffirming the company's commitment to RFID and quickly put his weight behind the EPC Gen 2 standard. (See EPCglobal Certifies First Hardware.) In a statement released last month, Ford predicted that, by the end of this fiscal year, just over a quarter of Wal-Mart's 3,900 sites will also be using the technology.

Some users have already voiced their concern about the costs, storage, and data sharing implications of RFID, although it is apparent that these worries are outweighed by the need to maintain a supply chain with the Wal-Mart cash cow. (See More Users Signal RFID Intentions and RFID Reality Check.)

RFID aside, Ford also finds himself at the helm of a major consumer of technology. Such is the scope of this operation that even the U.S. General Accounting Office (GAO) has urged the Department of Defense (DOD) to take some tips from the retailer's technology setup. (See GAO: Defense Blows Billions.)

The incoming CIO's importance in the storage sector was underlined earlier this year, when Cisco Systems Inc. (Nasdaq: CSCO) and McData Corp. (Nasdaq: MCDTA) tussled yet again for a slice of Wal-Mart's director business. The spat was hardly surprising, given that the retail giant is said to possess one of the world's largest SANs. (See Cisco, McData in Retail Faceoff, Bloodied In Bentonville, The Battle for Bentonville, and Cisco, McData Spar at Wal-Mart.)

What Ford decides to do next with this infrastructure is anyone's guess. But one thing is certain – the ramifications will likely be felt right across the IT industry.The company Diane Greene founded in 1998 has managed to stay a few steps ahead of Microsoft technologically, and it has turned out to be the most successful, by far, of all the software companies EMC has acquired over the past few years.

Along the way, VMware has led the charge to make server virtualization that rare technology that lives up to the hype. Now VMware is sinking its teeth into storage, too. For instance, its Infrastructure 3, which rolled out in June, includes support for shared storage on NAS and iSCSI SANS. (See VMware Eyes Enterprise, Microsoft.)

EMC raised a lot of eyebrows when it went outside the traditional storage realm to pick up VMware for $635 million in December 2003.(See EMC Gobbles VMware.) Since then, VMware's revenues increased from $75 million in 2003 to $520 million last year. Now supporters and critics of EMC CEO Joe Tucci agree one of the best moves he ever made was to leave VMware as an independent subsidiary under Greene.

And when Tucci came under fire when EMC bought RSA Security in June 2006, he used VMware as Exhibit A to defend his firm's acquisition track record. (See Tucci: EMC's Problems 'Self-Induced'.) Pointing to its projected 2006 run rate of $630 million, Tucci called VMware's growth "pretty fantastic."

Greene isn't on this list just because VMware drives a lot of revenue, though. She's an engineer by trade, and VMware's technology is what sets it apart from Microsoft and the rest. Early on, the VMware team based its wares on an x86 platform not built for virtualizing, and Microsoft hasn't caught up, despite buying VMware rival Connectix in early 2003."So successful has VMware been at developing and marketing its products, and so slow and piecemeal has been Microsoft’s progress, that Microsoft is the one that finds itself and its virtualization ambitions continually thwarted," Illuminata analyst Jonathan Eunice wrote in a report last August.

In the coming months, you can probably expect to see VMware play more of a role in EMC's storage strategy as one of its three virtualization pillars, along with file virtualization and block storage virtualization.

"I think VMWare is sort of entering phase two," Greene said during EMC's analyst day last June. "We've spent the last eight-and-a-half years evangelizing virtualization, modernizing it for industry standard systems, and I think that job is over. Virtualization is here."

It's not going out on a limb to say the CIO of the U.S. Department of Defense is a worldwide influence on storage technologies and vendors, not to mention an influence in other areas of IT.

Indeed, the department is the largest employer in the U.S. John Grimes's IT domain includes the Pentagon, branches of the U.S. armed forces, and the Department of Homeland Security, among other agencies.His fiefdom is also among the major spenders on storage, and he would likely make this list solely on the strength of the 17,000-switched-port Fibre Channel SAN the DOD is implementing to give its agencies the ability to use storage as a service. (See Brocade Helps DOD.) According to one of the key vendors, Brocade, the SAN is among the largest ever built.

The DOD also plays a key role in pushing emerging technologies. Along with Wal-Mart, the agency is credited with making RFID a reality because of its mandate that all of its suppliers must mark anything it sells to the Department with an RFID tag by 2007. (See Reva Racks Up $13.5M , HP & BEA Tag-Team on RFID, More Users Signal RFID Intentions, and RFID Software Ramps Up.)

It is also a major player in areas such as:

Encryption (See NetApp Buys Decru and Encryptors Could Boost IT Services.)

Supercomputing (See HP & BEA Tag-Team on RFID, DoD Uses Brocade, SGI SAN, and HP Supplies DOD With HPC.)

InfiniBand (See SilverStorm Ships 10,000th and QLogic Eyes SilverStorm.)

Grimes is the only person on our list to be hired by the American president. George Bush nominated Grimes for his current job June 17, 2005, and he was sworn in last November 14. Before joining the Defense Department, he was VP of Intelligence Information Systems at Raytheon.

"IT is critical to supporting the warfighter and fighting terrorism," Grimes said during an April appearance before an Armed Services Subcommittee on IT issues and defense transformation. "Today's warfighter depends on a staggering number of IT systems and information services that feature video, graphics, imagery, collaborative planning tools, remote interactive battlefield operating systems, and systems that rely heavily on geographically distributed databases for their functionality.""There is an interesting relationship between the bandwidth of the human optic nerve and the evolution of computer architectures," writes Dave Hitz, EVP and cofounder of Network Appliance, in a recent entry to his widely read blog.

This kind of delightfully goofy lead-in is a trademark of the Princeton egghead who cofounded NetApp with James Lau in 1992. So is his spunky determination to make his company's technological voice heard above the growing din of storage hype.

It was Hitz who left Auspex to get his storage appliance off the ground more than 14 years ago. With the battle cry to "Convince the industry that network file service should be handled by filers, and that NetApp filers are the ones to use," Hitz drove his point across firmly and cheekily. He spoke, issued memos, got around. He lurked on geeky message boards, getting his two cents in to help the cause. He trumpeted block-based storage for NetApp years ago. And he kept insisting that the usefulness of storage is more important than how it's delivered.

Who wouldn't listen? Early into his forties, Hitz can claim to be one of the founding fathers of storage networking. He's certainly someone you don't take your eyes off for very long.

It's too bad NetApp's external communications with the outside world have lost the fresh-faced smartness Hitz typifies. The company that sought to be the Cisco of storage is sometimes guilty of the stodginess that guys like Hitz triumphed over in years past.Still, with Hitz in play it's good to know there's at least one smarty-pants in the wheelhouse. Plus, we can't wait to see what he writes about next.

ISP America Online is not afraid to shake up its suppliers. Daniel Pollack, AOL's operations architect, is at the head of an effort that has cleverly shaved about $25 million off the firm's storage costs in the last two years.

The service provider's secret weapon was actually fairly simple. When AOL realized that a number of different vendors were trying to get a slice of the firm's business, it simply issued an RFP, sparking intense competition amongst the suppliers.

The AOL RFP covered three main hardware tiers: high-performance arrays for primary storage, modular Fibre Channel arrays for mid-tier storage, and modular ATA arrays for the third tier. Around a dozen vendors responded to the RFP, and AOL invited three or four to submit more detailed proposals before eventually settling on a dramatically improved deal from the firm's original supplier.

Other execs could do worse than follow the lead of Pollack and his team. "Just by seeing the percentage discount we were able to achieve by making the vendors compete with each other, I can't see how anyone could possibly not do this," the exec said recently.Although AOL has not revealed specific details of its vendor dealings, the service provider clearly realizes that this is a two-way relationship. AOL, according to Pollack, offered "significant incentives" to its vendors, while at the same time striking a better deal than was previously in place.

With users' storage needs going through the roof at the moment, AOL is now in the enviable position of being able to buy two to three times as much storage as it did before, without having to increase its spending. (See RFP Saves AOL $25M.)

Pollack himself is also in the middle of a long-term effort to wring even more efficiency out of AOL's storage. AOL is currently hard at work reclaiming under-utilized storage and consolidating its SAN infrastructure.

With Google's recent acquisition of YouTube, AOL's market looks set for another major shakeup, and storage is likely to figure prominently as firms plan weird and wonderful new services. (See Google to Buy YouTube, Will Content Deals Save YouTube?, Get Users Involved, Says Yahoo Boss, and Yahoo Opens Bandwidth Bottlenecks.)

The simple yet effective techniques employed by Pollack and his team at AOL may serve as a model for other firms currently trapped in the eye of the data storm. (See Google Groans Under Data Strain, Google Bangs Application Drum, Kazeon, Google Search, Go Google Geeks, and 2006: Storage Users to Watch.)Many firms struggle to get what they want out of one IT supplier, so spare a thought for General Motors CIO Ralph Szygenda who is juggling no less than six vendors as part of an ambitious long-term plan to overhaul the manufacturer's IT systems.

By opening up the firm's IT infrastructure to a wider group of suppliers, Szygenda has subtly shifted the customer/supplier power dynamic. Whereas before, GM was in thrall to one main vendor, now six need to stay on their toes. As the CIO explained earlier this year, "The benefit is that it's easier to move from one IT provider to another if they don’t execute well."

The $15 billion, five-year IT outsourcing contract taps some big-name systems integrators (SIs), including rivals Hewlett-Packard, IBM, Capgemini, Electronic Data Systems (EDS), Wipro, and Compuware Covisint. (See GM Awards $15B in Contracts, HP Grabs $700M of GM Biz, and IBM Picks Up $500M GM Deal.) The move was a significant one for GM, which had previously relied on EDS to handle the bulk of its IT.

The sheer scale of the project has already attracted widespread attention, with many analysts labeling the strategy as high-risk. The IT overhaul consists of around 40 different projects in areas such as financial services, computing operations, and applications support.

At a recent conference, Szygenda explained that GM's IT transformation hit full speed back in June. Since then, GM and its partners have performed 160,000 transition tasks, such as consolidating service desks run by multiple suppliers into a single global service desk, training 8,100 people on 29 standardized work processes, and redeploying 2,800 personnel.But for Szygenda, success rests on the firm's ability to keep all these different balls in the air. If one drops, then the shockwaves will be felt throughout the GM organization.

Control, inevitably, is key. Even before the contracts were awarded, GM spent two two years developing standardized processes to ensure that its outsourcing partners are all on the same technology page. These cover areas such as software and systems development and how to monitor computer operations.

Even Szygenda himself admitted that putting all GM's technology eggs in a half dozen baskets is risky. But if he manages to pull it off, the strategy may prove a good one for other CIOs to follow. (See GM Goes for New Outsourcing Model and GM's Eggs.)

He's the eminence grise of storage vendors – and, while we wouldn't call him soft-spoken, we usually listen a little more closely when Hu Yoshida speaks. Customers and investors apparently do, too.

Yoshida, vice president and CTO of Hitachi Data Systems, has been with the company for nine years. But he really cut his storage teeth at IBM, working on Big Blue's venerable RS/6000. He was active on both the technical and marketing sides of the business in Asia and Europe. From there, it was an easy hop, skip, and jump to working on Fibre Channel, multi-protocol SANs, and open systems. He rose to prominence at HDS as a key player in the vendor's TrueNorth storage management initiative, and more recently he has taken on data lifecycle management.A fixture on the conference storage tradeshow circuit, Yoshida has spent the last 18 months evangelizing another emerging technology: storage virtualization. Thankfully, when he discusses virtualization – or writes about it in his must-read blog – he doesn't fall back on marketing glibness or over-simplification. His real art is his ability to make complex storage technology more accessible without talking down to his audience.

"Many people have confused storage virtualization with the SAN," Yoshida tells Byte and Switch. "Assuming that virtualization can only be done in the SAN with switches or appliances that sit between the servers and the storage, you then have arguments around the benefits of inband versus out-of-band virtualization, assuming that these are the only choices."

Yoshida (and HDS) take the view that storage can be virtualized within the controller, independent of the SAN, thus enabling other FC storage systems to attach behind the controller, sharing common management and common functionality like replication. Yoshida calls this the "natural dis-aggregation of storage," which started when storage functions were pared away from the server.

"Now we have separated the storage controller from the storage media, allowing you to refresh and optimize them separately," Yoshida says. "Storage virtualization – the separation of the logical view (controller) from the physical view (media) – is absolutely required as the foundation for the dynamic or adaptive data center of the future." But he hastens to add that it must be done in storage, rather than the network, which is where the HDS perspective on virtualization starts to diverge from that of most of its rivals.

Still, as smooth as he is with the answers, Yoshida admits that helping customers understand the value of technology and how it applies to their current and future storage requirements is his biggest ongoing challenge. Right after that comes educating HDS's sales and marketing teams – no small task there.Yoshida's articulateness sets him apart from his peers in the industry and explains a great deal about why he's so influential, says Tony Asaro, senior analyst with the Enterprise Strategy Group. "Hu is technical and understands the nuances that are important to providing solutions to customers. Being technical is valuable but doubly so if you can express your knowledge in a way that is accessible – and Hu has this ability. Hu is also a gentleman, a rare quality in these times. His integrity is important both internally when trying to drive direction within HDS and externally when trying to influence an industry."

— The Editors, Byte and Switch

AOL LLC

AppIQ Inc.

Brocade Communications Systems Inc. (Nasdaq: BRCD)

Capgemini

Cisco Systems Inc. (Nasdaq: CSCO)

Compuware Covisint

Electronic Data Systems Corp. (EDS) (NYSE: EDS)

EMC Corp. (NYSE: EMC)

Emulex Corp. (NYSE: ELX)

Enterprise Strategy Group (ESG)

Google (Nasdaq: GOOG)

Hewlett-Packard Co. (NYSE: HPQ)

Hitachi Data Systems (HDS)

IBM Corp. (NYSE: IBM)

Illuminata Inc.

LSI Logic Corp. (NYSE: LSI)

McData Corp. (Nasdaq: MCDTA)

Microsoft Corp. (Nasdaq: MSFT)

Overland Storage Inc. (Nasdaq: OVRL)

Raytheon Co.

RBC Capital Markets

RSA Security Inc. (Nasdaq: EMC)

Sun Microsystems Inc. (Nasdaq: SUNW)

VMware Inc. (NYSE: VMW)

Wipro Ltd.

YouTube Inc.