Against a backdrop of continued uncertainty regarding founder Michael Dell’s proposal to Dell private via leveraged buyout (LBO), Dell hosted its Enterprise Forum recently in Santa Clara, CA for about 1,600 attendees that included customers, channel partners, analysts, and Dell executives. And in spite of the fact that servers and converged systems got more attention at this event than storage during the keynotes, I note that storage earns more than twice the gross margin of servers for Dell (50% for storage vs. 20% for servers). Clearly, storage will remain a critical product segment within Dell’s enterprise portfolio regardless of the final outcome of the proposed LBO.
Image via CrunchBase
Dell’s enterprise product portfolio now includes servers, storage, networks, software, security, and services. Dell intends to project its portfolio into opportunities it considers strategic including mobility, analytics, and cloud. Its services organization will be devoted to product support and maintenance, managed services, and data center outsourcing. Professional services will focus on optimizing Dell solutions for enterprise customers. Dell software product categories now include systems management, storage management, security and information management. Products of note I expect to see will help customers manage cloud (Enstratius acquisition, May 2013), Hadoop and Business Intelligence environments as well as bi-directional cloud data migration.
And what of the vaunted business model that propelled Dell to stardom in client/server computing you might ask? As one executive noted: “We're not protecting legacy business models.”
Converged System Announcements
Headlining Forum were three new converged systems offerings—preconfigured, integrated, and racked systems that include servers, storage, and networking—all from Dell. For Dell, the point of convergence is not necessarily to pre-integrate components as the overriding value proposition but to optimize as a derivative value resulting from convergence.
VRTX
VRTX (pronounced “vertex”) is a new converged system for enterprise remote office and small business office applications. It is preconfigured for VMware environments with 50 TB of storage and is scalable horizontally up to limitations that were not announced. We expect that customers will also be looking at VRTX to host VDI deployments. There are four model variations of which the first three will use direct attach storage accessed via an LSI controller that will allow disk sharing among processors. The fourth high-end unit will be built on Dell EqualLogic storage.
Active Infrastructure Systems
Dell’s Active Infrastructure systems, like VRTX, will also be converged around Dell processing, networking and storage but will be integrated with Dell’s Active System Manager software (Gale Technologies acquisition). And unlike VRTX, the intent of Active Infrastructure Solutions is to build them in ways that are optimized for specific application environments. They will also be significantly larger in scale than VRTX. The first of these was introduced at this event, a high performance computing (HPC) converged system for genomics processing. Dell Compellent storage arrays will be featured in these systems.
Dell Systems Optimized for Oracle Apps
During the opening keynotes, Mark Hurd appeared via video to help announce a new “preferred” partnership with Dell around yet another Dell-branded converge system stack, this one optimized for Oracle database applications, middleware, and management software. At this point it is unclear what the storage component will be. Hurd wound up his video saying: “This is the beginning of a lot of great things to come.” Both Oracle and Dell will contribute more or less equally to further R&D and application optimization. Dell will be responsible for marketing and sales support as this platform rolls out next year.
Storage Announcements
As I reported in an earlier post, Dell has, over the past few years, been buying its way to an expanding and evolving enterprise storage product portfolio as it migrated its customers off of previous generation Dell/EMC devices to the more modern Compellent and EqualLogic disk arrays. Many if not all of its storage product acquisitions are x86 compatible, giving Dell the ability to leverage its other x86-based products—bladed servers for example—and giving Dell a competitive pricing advantage when proposing solutions that combine Dell hardware and software. Dell is also in a position to address all the major storage needs of its core customer base—primary application, data protection, and archival. The complete storage portfolio can now be presented as a continuum—from production to backup to archive, helping Dell to migrate current Dell/EMC users to an all-Dell solution wherever it may fall along that continuum.
Midway through 2012, the strategy was:
- Apply the storage portfolio to Dell’s computing “stack” initiatives, converging storage with networking and servers including server blades into an integrated and cohesive unit presentable to enterprise customers.
- Bring high-end storage features (automated data tiering, deduplication, virtualization, etc.) to the mid enterprise market.
- Use pricing to disrupt within the mid-market segment
- Integrate the storage product portfolio “end to end” from primary to data protection to archival.
Dell storage executives updated the storage strategy at the Forum event. First, we note that Dell has in fact made progress integrating some of the previously disparate products with the others in the portfolio. The Ocarina data deduplication technology will be available later this year in Dell’s Fluid FS v3 that will forms the basis of the NAS side of Compellent and EqualLogic unified arrays. This will therefore be an implementation of deduplication for primary NAS storage and functions as a post process operation.
The most significant product announcements included:
- A bi-level implementation of flash storage called the Dell Compellent Flash Optimized Solution—Dell will offer an integrated package of MLC and SLC flash with Compellent arrays and managed via Compellent’s Storage Center data tiering function. Dell refers to this as “cost optimized” flash that they claim can take 75% out of cost of an enterprise data center SSD implementation by servicing read I/Os out of lower cost MLC while sending writes to higher cost SLC, avoiding the write wear limitations of MLC. They also noted that recent enhancements to Storage Center will also contribute to Fluid Cache performance such that it will no longer be necessary to configure Compellent arrays with High performance 15K RPM drives. A workload analyzer (software) called DPACK will help Compellent storage administrators determine the right MLC/SLC flash mix.
- I expect to see the Flash Optimized solution integrated with server-side SSD called Fluid Cache that was also announced at Forum. Fluid Cache is PCIe-attached slid state drives in the server with additional software.
- A “big data” high density storage array holding up to (84) 3.5 inch, 4 TB drives in a 5U, rack mountable enclosure.
- Also in v3 of Dell’s Fluid OS will be support for a 2 PB single namespace, SMB 2, and NFS 4.
- While EqualLogic storage was not covered at Forum, we were told by one of the storage product executives that coming enhancements will include 64-bit kernel support and post-process compression as well as deduplication on cold snaps.
Bottom Line
Given the shadow of uncertainty that has been cast over Dell by the proposed LBO and the subsequent objections by powerful shareholders, I wondered going into Forum if Dell was even in a position to do a forward-looking product-focused event. I was pleasantly surprised however by the breadth of enterprise IT vision and product additions and enhancements. I have long believed that Dell could command a significant presence in converged systems given its long-standing build-to-order business model and its strong relationship with Microsoft and support for MS applications. I now see Dell forcefully taking its place here, particularly with the VRTX offering. Dell’s channel partners who were present at Forum had high praise for VRTX. In addition, they were also encouraged by the breadth of the enterprise product portfolio on display and the renewed contact from Dell representatives.
I reserve judgment on the Flash Optimized Solution announcement until I see how it plays-out in the field and whether or not customers see value in its implementation. Dell’s claims regarding the Solution’s performance and favorable comparisons to the cost of high performance disk are largely dependent on I/O read/write ratios which in turn are largely dependent on the application. It is also unclear how much SLC is required for acceptable write I/O performance, further confusing the issue of how many tiers to configure within a Compellent array. Hopefully, DPACK will show users the way.
Enhancements to Compellent Storage Center and inclusion of EqualLogic within the Copilot support program were welcome but incremental in nature. The introduction of the high density storage array will also be interesting to a subset of Dell storage customers who need this extreme storage density. However, someone in the audience noted that, at nearly 400 lbs. per fully populated enclosure, moving it around would require a “four-man lift” to say nothing of the power, cooling, and raised floor loads generated by multiples of these.
With regard to the strategy points outlined in my previous post, the promised integration of previously acquired storage technologies has been at least partially fulfilled with the inclusion of Ocarina deduplication and the Exanet file system with Dell Compellent arrays. I can also foresee a time when the Compellent and EqualLogic brands are retired in favor of a more broadly defined Dell Fluid Storage brand that will span small, medium and large scale enterprise storage environments with a more or less common feature set. However, it was also disclosed that a Virtual Storage Appliance (VSA) would not be forth coming in the near future.
Finally, I was struck as were others at Forum, by the Oracle-optimized converged systems announcement. Indeed, I encountered some Dell executives who had no idea it was coming. As a result of this and the other converged systems announcements, Dell’s VRTX will be the only general purpose system in this portfolio. All of the others will be optimized, one way or another, for a specific set of applications. How Dell will rationalize its converged systems abundance (i.e. what to sell to whom and when) is presently unknown, even among Dell sales and marketing people I think. I also think it somewhat amusing that if the LBO is approved as expected sometime in mid-July, Microsoft will write a check for $2B to help Michael Dell realize his vision for the new Dell, while Oracle will get the benefits of Dell’s significant channel sales presence for not much more than a handshake. One can assume that MS will also demand something—maybe a lot of somethings—for its money.
