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NetApp buys Engenio - what unified couldn't do diversified will!

CartoonCalvin100X100.JPG By Calvin Zito, aka @HPStorageGuy

 

Yesterday (March 9), NetApp announced their intent to purchase part of LSI's storage business known as Engenio, for $480M.  As is usually the case, I found out about this on Twitter (Steve Duplessie, analyst super brain from Enterprise Strategy Group always seems to be one of the first people to send out this kind of news) and the conversations that ensued were interesting to say the least. 

 

Unless you're really paying attention to the storage industry, you may not have heard of Engenio before.  Let me share some of the facts and then share some speculation.  If you're already familiar with Engenio, I suggest you skip right on down to my speculations.  Here's the overview:

 

  • Engenio is an OEM to several vendors including IBM, Oracle, and DELL.  You can see what storage systems they offer on this LSI.com web page.  This business has passed through many hands - I was the product manager of HP's first SCSI-based disk array back in 1992 and that product was based on an array controller we OEMed from a previous iteration of LSI that was then owned by NCR.  It seems to have bounced around several times and landed as a business within LSI. 
  • A bit more on Engenio business unit/division - it includes a couple of acquisitions LSI made over the years.  StorAge was a storage virtualization vendor - their technology could sit as a sort of gateway in front of a number of heterogeneous disk arrays and allow that capacity to be managed as a single pool of storage with value added features like snapshots, remote replication, and thin provisioning.  NetApp has a product in the same space - the V-series, which is really a diskless FAS system that can sit in front of other arrays to virtualize them and provide value added functionality.  The other acquired company within Engenio is ONStor.  However, it looks as though ONStor is not part of the deal.
  • Tom Georgens, the current CEO of NetApp, used to work for LSI and in fact ran Engenio.  He was a key player in a planned IPO of Engenio until LSI pulled the plug on it.  Georgens promptly quit so it's ironic that he's now purchasing Engenio.  It will be interesting to see how it plays out for the management team at Engenio - not sure I'd want to be one of them.

Ok, so now the fun part - speculation

Take my comments for what they are, mere speculation from a biased competitor of NetApp:

 

  • At first glance there seems to be a lot of overlap between the Engenio and NetApp technologies.  NetApp's core strength has been NAS.  The robustness of the block storage provided by FAS has been questioned by many for some time (and not just competitors - see the article by Greg Schulz that I point to below).   When I talk to NetApp customers, many have told me they are only interested in FAS as a NAS solution but there are certainly those who like the unified (NAS and SAN in a single subsystem) approach that FAS offers.  But clearly, using FAS as a block based subsystem isn't for everyone.  Even NetApp founder Dave Hitz hinted at this on his blog saying, "The observation is that, while many customers and workloads do require advanced data management, some need “big bandwidth” without the fancy features. For them, the best solution is a very fast RAID array with great price/performance. Perfect for Engenio!" Sounds pretty clear, block-based FAS wasn't cutting it.
  • Many of Engenio's OEM customers are NetApp competitors.  How is that going to work out?  "Coopitition" is common today.  One OEM that I don't think will be an issue is IBM.  They already OEM their NAS products from NetApp but it is interesting that a large part of IBM storage will be OEM from NetApp.  Hmm - could there be a marriage proposal in the future?  DELL also OEMs storage from Engenio as does Oracle.  I  wonder what might happen with DELL - maybe nothing.  Given the sorry state of storage at Oracle, maybe Oracle would be a potential suitor.  Time will tell. 
  • One of the ideas passed around on Twitter was that NetApp would use their V-Series as a gateway in front of Engenio.  That one doesn't make sense to me.  NetApp is using the V-Series to get into accounts that don't have NetApp FAS today.  It's a kind of Trojan horse - get your foot in the door and you have a better chance at replacing the incumbent storage.  Putting the V-Series in front of Engenio block-based storage doesn't make any sense on any level.
  • I saved the best for last.  For the first several years of NetApp's history, before they had block-based storage, they told the market and their customers "all you need is NAS".  NetApp lead the move to get database vendors to open up file-based access to their databases.  Then in 2002, we woke up and NetApp added block-based access to ONTap.  So I guess NAS really wasn't good enough for everything but not to worry, the new mantra became "All you need is unified storage".  These are all brilliant marketing moves - create a hill that the competition can't easily climb.  Now add to the history Engenio and what is NetApp saying?  I'm sure they'll defend their unified approach for the short-term. What they say in the long-term will be most interesting but it seems obvious to me that it's an admittion that FAS-based block storage wasn't good enough.  We took a lot of heat about a year ago when we posted our observations after we repeated an ESRP test that NetApp had submitted.  You can see those posts by clicking this link and reading the guest blogs by Karl Dohm, an engineer in our lab.  Not long after these posts, I saw a VMware written paper that was trying to show there was little performance variation with a FAS array using iSCSI, FC, or NFS.  What I found interesting is that it showed exactly what Karl saw - that under load, FAS performance over time settles into a "steady-state" performance that is 50-70% less than a pristine system.  And before you say "hog wash" - this was confirmed to me by a NetApp employee who told me privately on Twitter that indeed performance will settle into a steady state after some time under load.  To be fair, what he also told me is that they don't submit results for a pristine array but one that has undergone "burn in".  However, that isn't what we saw with the ESRP submission that Karl replicated.  Here's the graph from the VMware white paper that shows the performance affect.  I've also added the entire paper as an attachment that you can download at bottom of this post. 

NetApp FAS curve.jpg

Source:  VMware vSphere™ 4: Exchange Server® on NFS, iSCSI, and Fibre Channel, page 8, 2009

 

 

I like the hand we have right now, though there's certainly more to do – the direction we’re going around Converged Infrastructure and scaleout storage is the right architecture for the future.  NetApp may be addressing their issues with block-based storage but they aren’t doing it with a new architecture – is a traditional array that lacks the scaleout we have with products like the P4000, X9000, and HP 3PAR.  I’ve said this a lot lately, but I’ve never been more excited about HP storage than I am now.

 

Interesting times for sure!  There are a few other blogs out there talking about this - here are a few I found to be thought provoking:

 

I'll be watching how NetApp spins this one out especially in light of their history of dramatic reversals.  What do you think?  Respectful comments from all are invited. 

Labels: NetApp| WAFL
Comments
greg schuz(anon) | ‎03-13-2011 12:26 AM

 

Calvin

 

NetApp products have about as much overlap with Engenio as your HP Xseries do with EVA, MSA2000 (or whatever you are calling it this month) or 3PAR among others.

 

Now, if what you mean is that a NetApp vFiler can sit atop an Engenio (or HP) block array to add or compliment value/capabilities similar to placing an HP Xseries gateway in front of an HP MSA2000, EVA, 3PAR or other block based device, sure, that’s a great example of overlap to extend functionality.

 

Otherwise, congratulations, you may have just created a new industry unique category definition for overlap :smileywink:

 

Oh, and thanks for the mention, I think :smileywink:....

 

Cheers

 

gs

 

Dimitris Krekoukias(anon) | ‎03-14-2011 05:03 PM

Hi, Dimitris from NetApp here...

 

I see nobody commenting but OK, I'll bite.

 

We had this discussion on Twitter before.

 

Effectively, it goes something like this:

 

If a customer asks me to size a system that does 100,000 4K 70% read/30% write random IOPS, for example, do you really think I'll give him a system that 8 hours later does 50,000?

 

Who'd buy the boxes if that were the case?

 

Just use your common sense please...

 

Check the SPC-1 submissions, those are block and we load the systems to over 80% and let them run and run and run. We get the highest IOPS/disk of any vendor. More here: http://bit.ly/hs4GMt

 

No, the Engenio acquisition is being done for entirely different reasons. Some analysts have figured it out... :smileyhappy:

 

D

Tschokko(anon) | ‎03-14-2011 07:53 PM

I think NetApp wasn't able to compete with EMC anymore. EMC changed his storage strategy to "Unified Storage", too. No more unique selling point for NetApp and their systems have to compete with EMC in every area, now. One big pain for NetApp is, that EMC is able to offer traditional SAN storage as usual and that ther unified storage portfolio is only an addition to the classic storage system. NetApp never was able to offer a straight RAID based SAN storage system, because the NetApp block based storage is an add-on to a primarily NAS focused system. If you are a decision maker, you would never choose NetApp if you're looking for a block based SAN system.

 

I think NetApp lose market shares and HP getting stronger and stronger, too. To compete with EMC and HP, NetApp have to change himself.

 

Kind regards.

Tschokko

 

 

 

Dimitris Krekoukias(anon) | ‎03-15-2011 04:44 AM

Tschokko,

 

Please don't tell any of this to those decision makers in some of the largest organizations in the world running NetApp for block storage, they may switch overnight! :smileyhappy:

 

Don't knock it till you've tried it in the real world, properly configured... 

 

EMC's messaging is about unified storage, not the products. A fine distinction, I know. They are worried because we've grown hugely - just look at NetApp's growth the past few years, it's phenomenal.

 

Guess what, people don't keep buying stuff if it doesn't work.

 

Anyway, it's a big enough market for everyone, without competition we'd all be using reel tape still.

 

D

 

 

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25+ years experience around HP Storage. The go-to guy for news and views on all things storage..


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