General Industry Observations
I’ve been reading and hearing a lot of rumors these days about change in the storage industry. “IPO” vs. “Acquisition” is really the only way forward, and due to stumbles by Pure Storage, Violin and others, IPO is simply not in the cards for most of the independents looking to find their product/market fit. NetApp‘s acquisition of SolidFire is only the latest in the ongoing consolidation in the storage space; it won’t be the last.
While this is definitely not the first time NetApp has attempted to acquire a company with a technology they needed, this is definitely one that many see as absolutely necessary for NetApp to keep up with & remain relevant in comparison to the pure-play AFA vendors. *I don’t normally comment on this kind of activity, but being that I was at NetApp for the better part of 3yr, I had to comment, this being their first major acquisition since I left and also due to all of the management shake-up over the past year.
Is SolidFire the Right Fit for NetApp?
No one really knows the answer to this or how this will pan out, but I happen to know that both SolidFire and NetApp have a lot of smart people to try and make it happen; many of them, I consider very close industry friends. I do see areas where NetApp is weak technically (block) and market-wise (service providers) that SolidFire could help to fill a gap. Will SolidFire remain a separate product line? I hope NetApp has learned their lesson on this one.
Both NetApp and SolidFire have “scale-out” technologies that would seem to conflict with one another; I don’t see this as a strength.
What’s interesting to me about both NetApp and SolidFire is their reliance on dedupe and/or compression to get to optimal pricing economies with both of their product lines. I’ve seen quite a bit of commentary lately as well as around how dedupe is going to be less and less important as next generation media decreases in cost and increases in density. As this happens over the next couple of years, their value prop will resonate less and less. The real winners will be vendors like Coho Data who have optimized (and are continuing to optimize) their stack from a performance perspective, regardless of the storage medium. Whether it be disk, PCIe flash, NVMe Flash, SATA SSD, SAS SSD or even NVDIMM, etc… Will we add dedupe? Absolutely, YES (it’s being worked on right now). But it’s really, really nice to know that despite how we implement it, we’ll rely on it less than the other guys. Add to this the fact that those who are leveraging complementary technologies, like SDN, to scale-out are better positioned to grow from a performance perspective.
Who are the Winners and Losers?
The winners are NetApp in the short-term as they remove a competitor in the flash market, and temporarily silence those that say they aren’t innovating and are no longer relevant in today’s storage market. The other winners are the SolidFire shareholders, of course. NetApp customers can also be considered winners, albeit with more choices and less clarity if they continue on as NetApp customers. The other guys out in the storage start-up world could be considered winers as well, since this legitimizes them, brings them unhappy SolidFire and NetApp customers and potentially starts a bidding war for the next best thing…
The losers are SolidFire customers, of course. SolidFire had a unique product and solid customer base in the service provider market, but it remains unclear on how NetApp will integrate them into their organization. What also remains to be seen is whether SolidFire can continue to keep the pace of innovation required to keep up with Pure Storage, and other scrappy start-ups with unique and game-changing technology that will now challenge NetApp for the next generation of the storage market…
We live in interesting times friends, interesting times indeed!
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