Analysts were quick to comment on this when the news broke.Tony Asaro gave his take on [Dell's Logic - The Storage Market is No Longer Equal], and Steve Duplessie writes [Dell Just Bought N.H.’s Tech Sector]. The last time I remember Steve talking about EqualLogic, [Catching Up], he had the funniestquote:
"EqualLogic didn’t get 2,000 customers because people were dying to use iSCSI. It got them because it built systems that scale dynamically and because a system the size of Montana can be managed by someone as clueless as my ex-wife."
As with any acquisition, people might be asking if this is a "match made in heaven" that makes strong business sense,or another HP-Compaq debacle. Back in September, I posted [Supermarkets and Specialty Shops] to explain how the storage marketplace has two market segments. Internally, IBM distinguishesbetween "clients" and "customers". Clients are those that buy services and complete solutions from a one-stop systems vendor, such as IBM, HP, Sun, or Dell, or systems integrator like IBM, CSC or EDS. Customers are those that buy products and components, from the systems vendors I just mentioned, as well as from individual specialty shops, like EMC, HDS, or NetApp.
To reach the growing "supermarket" segment, specialty shops are dependent on systems vendors to OEM or resell their kit: EMC disk through Dell, HDS disk through Sun and HP, NetApp through IBM. Until now, EqualLogichad to make their living as a "specialty" shop, but iSCSI appeals more to SMB than large enterprises, andSMB tend to be in the "supermarket" segment, so they partnered with Sun. Here is the timeline of this likely awkwardand strained relationship:
- 2002: [Sun Says iSCSI May Be a 'Mistake']quoting Balint Fleischer, CTO of Sun's network storage group.
- 2003: [Sun changes iSCSI tune] andcertifies EqualLogic arrays for use with Sun servers.
- 2004: [EqualLogic and Sun Microsystems Enter into Reseller Agreement]
I am not surprised that I haven't seen anything in the blogosphere yet from HP, Dell or Sun. I suspect this news meansthat Sun won't be reselling Dell's EqualLogic boxes anymore, and perhaps there is nothing more for Sun bloggers Randy Chalfant or Nigel Dessau to add to that. HP and Dell are practically non-existent in the storage blogosphere, so I didn't expect much from them either.
I did, however, expect EMC to put in their spin, given that Dell resells EMC disk, and accounts for perhaps 15% of their revenues.Now that Dell has multiple offerings, they will be instructing their channel reps when to lead with EqualLogic versus when to sell EMC, for now, until 2011, at which point may simplify their storage sales model to just EqualLogic. I don't know if Dell would do that in 2011. Depending on how quick the decline happens, EMC may have to increase the pricesof their gear, or cut into their development budgets, to make up for this loss.
I started this post because of a comment from EMC blogger Chuck Hollis, who speculates how this will impact[Dell, EqualLogic and EMC].In that post, he expresses his opinion (which I will put into a different color):
"Speculation is pretty evenly split. Neither HP nor IBM have a good, entry-level iSCSI product."
If he had left out the word "good", then that would just be a false statement, but by adding the word "good" reduces this to merely an opinion of IBM products that I disagree with. (I have no experience with whateverHP sells in this category, nor talked to any customers about their experiences, so will neither agree nordisagree with Chuck's opinion of the HP half of his statement). As for the term "Entry-level", this is fairly well defined by analysts as a storage system under $50,000 US Dollars. Actually, IBM has three good offerings.
Our basic, lowest-price model is the IBM System Storage DS3300, which does iSCSI only, like the EqualLogic offerings. This supports both SAS and SATA disks, and can attach to our System x and System p server product lines.
Our smallest model of our fancier IBM System Storage N series not only supports iSCSI, but also CIFS, NFS,HTTP, FTP, and FCP protocols, what we call "Unified Storage". The iSCSI feature is included at no additional charge, and small customers can start with this, then scale up to larger N3600, N5000 or N7000 models, andadd more protocols and software features, as their business grows.
Our next larger model, but still entry-level, is the N3600. Since the N series supports a unified multi-protocolplatform, with features like SnapLock for regulatory compliance and SnapMirror for remote disk mirroring. The IBM System Storage N series easily replaces any mix of EMC "C-boxes": Centera, Celerra, and CLARiiON.
Both the DS3300 and the N series support the various Business Applications I have discussed this week, Microsoft Exchange, Lotus Domino, SAP, Oracle, Siebel, JD Edwards and PeopleSoft. N series offers SnapManager for variousapplications to make the business value even that much better.
Chuck speculates that Dell did this to compete better against rival HP, but that doesn't make sense, sincehe feels HP didn't have much to offer in this space. Perhaps Dell did this to competebetter against IBM, the number one vendor in storage hardware, according to IDC. Looking at what IBM andNetApp have to offer, Dell may have realized that they didn't have competitive disk systems from their resellingrelationship with EMC, looked elsewhere and found EqualLogic. Meanwhile, EqualLogic probably felt that Sun wasgoing out of business, or not yet fully supportive of IP SAN environments, and decided to ["switch horses midstream"].
technorati tags: IBM, entry-level, iSCSI, Dell, EqualLogic, ESG, Tony Asaro, Steve Duplessie, Montana, ex-wife, HP, Compaq, systems vendors, systems integrators, supermarket, specialty, products, components, services, solutions, Chuck Hollis, Sun, NetApp, HDS, Exchange, Domino, SAP, Oracle, Siebel, JD Edwards, PeopleSoft, IDC, DS3300, N3300, N3600