Welcome!

Linux Containers Authors: Yeshim Deniz, Pat Romanski, Roger Strukhoff, Liz McMillan, Elizabeth White

Related Topics: SDN Journal, Industrial IoT, Linux Containers, Containers Expo Blog, @CloudExpo

SDN Journal: Article

Who Will Be Storage Leaders of 2016? | @CloudExpo #Cloud #SDN #Linux

The accelerated pace of moving data to the cloud suggests that hybrid cloud an hyper-scale cloud providers will make share gains

A year ago, I wrote a two-part series on how lower cost, higher performance on-premise storage and nearly free cloud-based storage were driving both innovation and disruption in the storage industry.  Applying Clayton Christensen's theory of innovation and disruption to the storage industry, my premise was that flashy startups, (e.g., Pure, Nimble, VMem, Tegile and Tintri) that were first to introduce credible data reduction to flash arrays were innovators but not disruptors in the space and would therefore disappoint investors; storage incumbents (e.g., HDS, EMC and IBM) who added data reduction would continue to survive; but the real disruptors would be the cloud players (e.g., Amazon, Google and Microsoft). The combination of struggling share prices, weak earnings reports, recent acquisitions, and raging cloud revenue witnessed throughout 2015 and into 2016 continue to point to Christensen's theory as the explanation for an ongoing economic transformation that will forever change the storage industry as we know it.

As we look at the future of storage: 2016 and beyond, what does it hold for the industry? Today, it's apparent that the last of the flashy startups and remaining storage incumbents are fully engaged in a race to solve what is essentially yesterday's problem. They are building better, faster and cheaper on premise branded arrays... that will serve a declining share of the market. Dependence upon branded solutions will prove to be the Achilles heel for the once innovative array companies. Meanwhile, disruption continues to be driven by cloud adoption. A recent StorageNewsletter article cited an IDC report that suggests cloud environments accounted for 1/3 of worldwide IT spending on infrastructure in 2015 and predicted that overall spending on enterprise IT infrastructure would jump from 28% to 32.5% over the next year.

The accelerated pace of moving data to the cloud suggests that hybrid cloud and hyper-scale cloud providers will make massive share gains. I believe the impact of these gains will drive the adoption of white box compute, open source storage, computing and networking software. Offerings that are "good enough" today, will progress and the software driven, cloud business model will prevail.

Hybrid Cloud Changes Everything
Is it premature to say that the branded storage companies and business are in a permanent state of decline and that hybrid cloud changes everything?  I don't think so.  Here's why:

Business Model Change
Moving data to the cloud changes compute, networking and storage costs from CAPEX to OPEX items. Storage, networking, and compute are all built from unbranded commodity components,which makes performance metrics and costs of goods easy to compare.  Differentiation and margins decline as a direct result of this commoditization. Marketing of branded solutions loses the power to influence decision-making.  And, as interoperability between vendors improves, enterprises can gain agility with the ability to switch vendors fluidly.

Buyer Influence Change
Data center buyers emerge and gain influence in relation to storage (specific) admins and buyers.  As purchasing relationships change, branded vendors lose influence. This accelerates movement from branded to commodity-based hardware. As data center buyers consolidate compute, networking and storage purchasing into one entity to drive down costs and margin, their buying power becomes more concentrated. White box vendors operate at 10% margin vs. the 55% margin of branded vendors, so incumbents will have a hard time ever competing in this environment.

Emergence of White Box
The hardware platform of choice becomes standards-based, commodity class white boxes for compute, networking and storage.  Branded vendor proprietary reliability is instead delivered through commodity component redundancy; "Refresh" becomes a passe term and is constant to improve efficiency.  Flash devices enable high performance, negating the requirement for specialized platforms.

Open Source Software with Enterprise Support Is Embraced
Standardization drives migration of value to open source software. As the offerings pass the "good enough" quality and performance bar, maintenance and support dollars move from hardware to open source-based options for software- defined compute, networking and storage.  Because more mission critical applications are migrated to the hybrid cloud, and software is disaggregated from hardware, cloud data centers opt for commercial support to deliver an enterprise level of QoS to their cloud infrastructure.

Emergence of Hyper-Converged as an Architecture Option
The hybrid cloud can leverage the hyper-converged architectures supported by more capable, and feature rich open source software.  Distributed storage becomes a function of commodity servers, not special purpose storage arrays.

Conclusion: Which Cloud Players Will Ride Disruption to Leadership in 2016?
So, who will the real disruptors be in the coming months? My prediction is that Christiansen's theory of Innovation and Disruption plays out to a "T" and that we'll see three classes of companies benefit from the secular trend and disruption of hybrid cloud adoption. If I'm right, all three will benefit at the expense of branded incumbents.

  1. White box players and ODMs (e.g., Super Micro, Quanta, Wistron, Inventec). This class of competitor will gain share by selling directly to all hybrid clouds - both hyper scale providers and to a larger group of enterprises that build clouds. To establish leadership in this category, white box players will have to overcome the pressures of highly concentrated buyers, tight margins and codified pricing. These are big challenges, but they are ones their margin structures are prepared to address.
  2. Hyper scale cloud service providers - By 2020, 50% of storage dollars will be controlled by Amazon, MSFT, IBM, and Google. These companies will leverage core competencies like applications and analytics to subsidize free or near free storage, which will accelerate the migration of critical apps and data to the hybrid cloud and quicken market share gains.
  3. Commercial Open Source software vendors (Red Hat, SUSE) - These vendors deliver WW support for enterprise compute, network and storage software.  Hybrid cloud data centers already leverage Linux at a higher rate than any other OS and because it houses mission critical information, operators will look for single-source support. The company that provides 75% of paid Linux is Red Hat.  The halo effect of Linux adoption benefits other open source ecosystems, such as Open Stack, Ceph, KVM, and Containers.

The hybrid cloud is disrupting the supply chain of the IT infrastructure. Just as Clayton Christiansen's theory of innovation and disruption predicts, new business models and products offered by hybrid players are disrupting old models, changing the rules for how data is stored, and winning the battle for storage market share.  In this case, it is not just one sector that benefits, but the whole ecosystem of hardware vendors, open source support organizations and hyper scale providers that form a cohesive, well capitalized, capable, and disruptive market force. In the long run, hybrid cloud disruption delivers low cost, scale and agility, all things that benefit the enterprise and the end user.

More Stories By Tom Cook

Tom Cook, Chief Executive Officer and President, is responsible for guiding the company’s strategy and vision. Cook has more than 20 years of experience leading growth stage technology companies. Prior to joining Permabit, Cook led and completed the sale of web application developer, Curl Corporation to a division of the Sumitomo Corporation. Prior to Curl, Cook was President and CEO of audio tool maker, Cakewalk Software (acquired by Roland Corporation), which he led from start-up to worldwide market leadership. He also served as a director of or advisor to more than a dozen companies and organizations.

Cook has a Master’s degree in Business Administration from the Amos Tuck School of Business Administration, Dartmouth College, and a Bachelor’s degree in Economics from Harvard University.

@ThingsExpo Stories
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone inn...
Digital Transformation (DX) is not a "one-size-fits all" strategy. Each organization needs to develop its own unique, long-term DX plan. It must do so by realizing that we now live in a data-driven age, and that technologies such as Cloud Computing, Big Data, the IoT, Cognitive Computing, and Blockchain are only tools. In her general session at 21st Cloud Expo, Rebecca Wanta explained how the strategy must focus on DX and include a commitment from top management to create great IT jobs, monitor ...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
Recently, WebRTC has a lot of eyes from market. The use cases of WebRTC are expanding - video chat, online education, online health care etc. Not only for human-to-human communication, but also IoT use cases such as machine to human use cases can be seen recently. One of the typical use-case is remote camera monitoring. With WebRTC, people can have interoperability and flexibility for deploying monitoring service. However, the benefit of WebRTC for IoT is not only its convenience and interopera...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
SYS-CON Events announced today that Evatronix will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Evatronix SA offers comprehensive solutions in the design and implementation of electronic systems, in CAD / CAM deployment, and also is a designer and manufacturer of advanced 3D scanners for professional applications.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
"Digital transformation - what we knew about it in the past has been redefined. Automation is going to play such a huge role in that because the culture, the technology, and the business operations are being shifted now," stated Brian Boeggeman, VP of Alliances & Partnerships at Ayehu, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...