On SearchStorage.com, my buddy Tony Asaro recaps the latest Storage Acquisition Frenzy
It has always been the case in fast pace technology areas that you can't tell the players without a program card, andthis is especially true for storage.
When analyzing each acquistion move, you need to think of what is driving it. What are the motives?Having been in the storage business 20 years now, and seen my share of acquisitions, both from within IBM,as well as competition, I have come up with the following list of motives.
Although slavery was abolished in the US back in the 1800's, and centuries earlier everywhere else, many acquisitionsseem to be focused on acquiring the people themselves, rather than the products or client list. I have seen statistics such as "We retained 98% of the people!" In reality, these retentions usually involve costly incentives,sign-in bonuses, stock options, and the like. Desptie this, people leave after a few years, often because ofpersonality or "corporate culture" clash. For example, many former STK employees seem to be leaving after their company was acquired by Sun Microsystems.
If you can't beat them, join them. Acquisitions can often be used by one company to raise its ranking in marketshare, eliminating smaller competitors. And now that you have acquired their client list, perhaps you can sellthem more of your original set of products!
Symantec had acquired Veritas, which in turn had acquired a variety of other smaller players, and the end result is that they are now #1 backup software provider, even though none of theirproducts holds a candle to IBM's Tivoli Storage Manager. Meanwhile, EMC acquired Avamar to try to get more into the backup/recovery game, but most analysts still find EMC down in the #4 or #5 place in this category.
Next month,Brocade's acquisition of McData should take effect, furthering its marketshare in SAN switch equipment.
Prior to my current role as "brand market strategist" for System Storage, I was a "portfolio manager" where wetried to make sure that our storage product line investments were balanced. This was a tough job, as the investmentshad to balance the right development investments into different technologies, including patent portfolios.Despite IBM's huge research budget, I am not surprised that some clever inventions of new technologies comefrom smaller companies, that then get acquired once their results appear viable.
- Value Shift
The last motive is value shift. This is where companies try to re-invent themselves, or find that they are stuck in acommodity market rut, and wish to expand into more profitable areas.
LSI Logic acquisition of StoreAge is a good exampleof this. Most of the major storage vendors have already shifted to software and services to provide customer value,as predicted in 1990's by Clayton Christensen in his book "The Innovator's Dilemma". The rest are still strugglingto develop the right strategy, but leaning in this general direction.
I hope that provides some insight.[Read More]
'Those who cannot remember the past are condemned to repeat it.'
--- George Santayana
This last week of 2006 seems like a good time to recap the past year, and review the upcoming new year.That said, a good start is PC World's Top 21 Tech Screwups of 2006.
- Laptops made the news this year in a variety of ways. #1 was exploding batteries,and #6 were the stolen laptops that exposed private personal information. Someone I knowwas listed in one of these stolen databases, so this last one hits close to home. Securityis becoming a bigger issue now, and IBM was the first to deliver device-based encryptionwith the TS1120 enterprise tape drive.
- IBM makes the chips used in all the major game consoles: Microsoft's Xbox 360, Nintendo's Wii,and Sony's PlayStation 3. Being all based on IBM technology doesn'tmake the games interoperable or compatible, and in the case of Sony, it made #8 for being incompatible with their own PlayStation 2.Sadly, Nintendo's Wii had its own set of problems, and I found this parody of asafety video on YouTubeyou might enjoy.
- Microsoft had #5 (not understanding the holiday shopping season ends in December), #12 (not understanding people who use PCs prefer privacy), and #17 (not understanding how people useMP3 music players). At least they delivered their latest Xbox with minimal problems.As an engineer, taking on a market strategy role involved reading books and taking classeson marketing. I learned that it is all about understanding the marketplace well enoughso that your prospects "know, like, and trust" your company. Perhaps Microsoft should take a refresher course.
- A few companies showed off their brilliant customer service. Comcast is representedin a video on #7, and AOL in a taped phone conversation on #15. Many of our clients areafraid of vendor lock-in, and how difficult it might be to undo the deployment of new storagetechnology. Fortunately, IBM is committed to open standards, making it easier for our clientsto make the right choice and feel good about it.
Hopefully, we can all learn from the mistakes of others, and not repeat them in 2007.
technorati tags: IBM, tape, encryption, TS1120, privacy, security, game consoles, marketing
I got an interesting email from a new blogger asking me for advice on how frequently to post entries.I am probably not the right person to ask, as I blog whenever a thought comes to mind that I think otherswould enjoy reading, and sometimes that means several times a day, and other times only a few per month.I actually have a day job, busy doing other things, and blogging is just now part of my general set of activities.My focus is quality not quantity.
With that in mind, I was delightfully surprised that this blog was ranked among theTop 10 Storage Blogs by Network World, which explains my recent spike in traffic.
I shared the news with my 72-year-old father, and he exclaimed "There are actually 10 or more blogsto cover the IT storage industry?" He couldn't understand why the world would read more than two or three. I personally track thirty-five of them, and I suspect there are hundredsothers out there. Of these, some blog quite regularly, while others do not, so I am in good company. Deni Connor, the author who selected these top 10, gave a nice general complement tothe entire list of blogs:
The blogs written by storage company executives can be surprisingly vendor-agnostic, though the analysts and consultants still tend to pull fewer punches.
And this was my goal as well, to enlighten and entertain, in a fair and balanced manner, that adds value to the blogosphere, rather than just repeat the IBM press releases of each day. If you are just looking for "announcements" there is an RSS feed for IBM System Storage you cansubscribe to.
Not surprisingly, two of the blog entries that Deni mentions are the ones I get the most comments on:
- ILM for my iPod tried to explain Information Lifecycle Management (ILM) into laymen terms that everyone could understand. As an engineer-turned-marketeer, explaining technology and concepts into laymen terms is something I find myself doing a lot to help others grasp what is otherwise rather complex industry we are in. Not surprisingly, many IBMers were not aware they were eligible for discounts on Apple products like the iPod, and thanked me for pointing them to this.
- Aperi is "Viagra" for SMI-S which has now become my infamous blog entry within the halls of IBM. I chose this term over "steroids" given the various scandals involving famous athletes that were going on at the time. To this day,if you search Google for "Tony Pearson" AND "Viagra" you get this blog entry at the top of the list. Oneco-worker overheard that I had "used Viagra" only to later find out they were referring to the fact that I "used Viagra as a metaphor in the title of a blog entry". And that was the real issue, not that I used the term in a popular vernacular that might not translate well into other languages, or that I failed to attribute this as a trademark that belonged to its respective manufacturer, but that it was in the title itself, and thus the URL became "aperi_is_viagra_for_smi" when published in newspapers and press releases. I have since learned to be more careful when phrasing the titles of my blog entries.
I began my year-end vacation today, but like exercising at the gym, I will try to keep up with my blogging over these next two weeks. Especially for those readers out there doing end-of-year storage infrastructure changes. This blog is for you.[Read More
Well, there's little to no chance we'll get snow in Tucson the rest of this year, so I built a snowman out in Second Life. That's my avatar on the right, andI am an eightbar specialist. Eightbar refers to our logo.
This was part of an IBM "Holiday Party" where dozens of IBMers met "in the virtual world" to participate in 3D competitions,I entered the "Build a Snowman" competition, since I am still a beginner at this. This was whatI was able to come up with in 20 minutes that we had to get it done. Why I made mine out of woodwith different colors was so that I could stand out from the crowd. Everyone else used traditionalwhite snowy textures.
Others had a more challenging "Build a Snow Globe" where you have to write scripts to get thelittle snow flakes to move around. This for the advanced builders of our group.
This is still new, emerging technology, but eventually, Second Life and other MMOs could be used to market products,that people can view from all three dimensions, talk to a technical specialist, and get all questions answered.It could be used for education, shopping around, and collaborating with others.
Anyways, I haven't heard the results, but I had fun anyways.
technorati tags: IBM, snowman, competition, Second Life, holiday party
Last week, in my posting on Toshiba's latest 1.8" drive
, Robert Pearson asks:
You may not be the right person to ask but I am asking everyone so "How do you see hybrid disk drives?"
(For the record, I am not immediately related to Robert. At onepoint, "Pearson" was the 12th most common surname in the USA, but now doesn't even make the Top 100.)
Robert, I would like to encourage you and everyone else to ask questions, don't worry if I am the wrong person to ask, asprobably I know the right person within IBM. Some people have called me the "Kevin Bacon" of Storage,as I am often less than six degrees away from the right person, having worked in IBM Storage for over 20 years.
For those not familiar with hybrid drives, there is a good write-up in Wikipedia.
Unfortunately, most of the people I would consult on this question, such as those from Market Intelligence or Research, are on vacation for the holidays, so, Robert, I will have to rely on my trusted 78-card Tarot deck and answer you with a five-card throw.
- Your first card, Robert, is the Hermit. This card represents "introspection". The best I/O is no I/O, which means that if applications can keep the information they need inside server memory, you can avoid the bus bandwidth limitations to going to external storage devices. Where external storage makes sense is when data is shared between servers, or when the single server is limited to a set amount of internal memory. So, consider maxing out the memory in your server first (IBM would be glad to sell you more internal memory!!!), then consider outside solid-state or hybrid devices. Windows for example has an architectural limit of 4GB.
- Your second card, Robert, is the Four of Cups, representing "apathy".On the card, you see three cups together, with the fourth cup being delivered from a cloud. This reminds me thatwe have three storage tiers already (memory,disk,tape), and introducing a fourth tier into the mix may not garnermuch excitement. For the mainframe, IBM introduced a Solid-State Device, call the Coupling Facility, which can be accessed from multipleSystem z servers. It is used heavily by DFSMS and DB2 to hold shared information. However, given some customer's apathytowards Information Lifecycle Management which includes "tiered storage", introducing yet another tier that forcespeople to decide what data goes where may be another challenge.
- Your third card, Robert, is the Chariot, which represents "Speed, Determination,and Will". In some cases, solid state disk are faster for reading, but can be slower for writing. In the case of ahybrid drive, where the memory acts as a front-end cache, read-hits would be faster, but read-misses might be slower.While the idea of stopping the drives during inactivity will reduce power consumption, spinning up and slowing downthe disk may incur additional performance penalties. At the time of this post, the fastest disk system remains the IBM SAN Volume Controller, based on SPC-1 and SPC-2 benchmarks in excess of those published for other devices.
- Your fourth card, Robert, is the Eight of Pentacles, which represents"Diligence, Hard work". The pentacles are coins with five-sided stars on them, and this often represents money.Our research team has projected that spinning disk will continue to be a viable and profitable storage media for at least anothereight years.
- Your fifth and last card, Robert, is the World, which normallyrepresents "Accomplishment", but since it is turned upside down, the meaning is reversed to "Limitation". Some Hybriddisks, and some types of solid state memory in general, do have limitations in the number of write cycles they can handle. For thoseunhappy with the frequency and slowness for rebuilds on SATA disk may find similar problems with hybrid drives.For that reason, businesses may not trust using hybrid drives for their busiest, mission-critical applications, but certainlymight use it for archive data with lower write-cycle requirements.
The tarot cards are never wrong, but certainly interpretations of the cards can be.
technorati tags: Robert Pearson, Kevin Bacon, IBM, storage, Tarot, card, deck, Hermit, Four-of-Cups, Coupling Facility, Chariot, SAN Volume Controller, SVC, SPC-1, SPC-2, benchmarks, Texas Memory Systems, Eight-of-Pentacles, World, Hybrid, SATA