2014 State of Enterprise Storage
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1 THE BUSINESS VALUE OF TECHNOLOGY ELECTRONICALLY REPRINTED FROM FEBRUARY State of Enterprise Storage Data stores are big, with 83% reporting 10% or better annual growth; 27% are wrangling 25% or more yearly increases. The main culprit: enterprise databases and data warehouses. Yet money s still tight, with 25% saying they lack the budget to meet demand, never mind optimize for performance and capacity. By Kurt Marko
2 The Root Of The Problem Business users worry about storage growth like the NSA worries about your privacy. Sure, they may pay lip service to the virtue of restraint, but when it comes down to it, they want their stuff. And their stuff? It s digital, decoupled from the physical devices used to store and distribute it. Size, and sometimes cost, are no longer attributes users associate with information, so there is no limit to its accumulation. And of course, any time you make something easier and cheaper to consume, you increase demand. In the case of storage, you increase it by a lot, to the tune of continued double-digit growth, according to our 2014 InformationWeek State of Enterprise Storage Survey, which we limited to respondents from organizations with 50 or more employees who are involved with storage strategy or operations. Most, 83%, report 10% or better annual increases; 27% are wrangling 25% or more yearly growth. An unfortunate 10% report growth of 50% or more, effectively doubling their capacity every 12 to 18 months. The main culprits: enterprise databases, systems, productivity software documents, and collaboration systems like SharePoint. Money s still tight, of course, with 25% saying they lack the cash even to meet demand, much less optimize performance by loading up on solid state drives. In a research note, 451 Group storage analyst Marco Coulter points out that over the past decade, enterprise storage capacity demand has grown faster than Moore s Law, more than doubling every year. In 2002, only 18% of respondents to 451 Group s storage survey had more than 80 TB of SAN capacity. Today, many manage well over 10 PB. Meanwhile, just having enough space no longer guarantees performance. In recent years, the consistent top two pain points are dealing with rapid capacity growth and the high cost of storage, says Coulter. Yet the selections of each dropped in 2013, so something is increasingly painful for storage professionals. It is delivering storage performance. All this is setting up a tough pick two conflict for IT among capacity, cost, and performance. Where s The Money? On the vendor side, business isn t booming. Storage system commodification and technology improvements mean growth in enterprise storage capacity doesn t translate to higher sales. IDC estimates that external disk storage systems factory revenue posted a year-over-year decline of 3.5%, totaling $5.7 billion in the third quarter the third consecutive decline. Overall for the last 12 months, storage systems revenue is down 1.3% year over year, with only EMC and Net App eking out slight gains. IDC s definition of systems includes disks and components, either in a standalone cabinet or within servers, but it generally translates to the type of consolidated disk systems enterprises use for most of their important applications. As in the past, the amount each system holds keeps improving. IDC estimates total storage systems capacity shipped reached nearly 8.4 exabytes, up 16.1% year over year. Like revenue, sales are generally flat for EMC, NetApp, IBM, Hewlett-Packard, and Hitachi. Only NetApp defied the thirdquarter revenue slowdown, with sales increasing almost 6% from the third quarter of Analyzing the last four quarters of IDC estimates (see Figure 3), total storage industry revenue is down about 1%, with EMC and NetApp squeezing out small increases while the remaining top three vendors all suffered declines, led by Hitachi, down almost 9%. While the macro view paints a stagnating storage business, it s not a uniform picture across product categories and price points. As Chuck Hollis, chief strategist at VMware, points out in a blog post, the largest product segment in IDC s analysis is block-based network storage, things like Fibre Channel SAN, FCoE, and iscsi arrays, which are actually doing better than the storage market overall. Almost half of the respondents in our survey use FC SANs, and one-third use iscsi for 25% or more of their storage. Our respondents are more inclined to buy storage from vertically integrated IT vendors, namely HP and IBM, than the storage specialists like EMC and NetApp that dominate the industry rankings, although EMC does effectively tie Dell for third place among the vendors used for Tier 1 and 2 storage. In fact, the share using EMC or NetApp among our demographic at organizations with 50 or more employees dropped nine points each this year, while IBM gained six points. HP recorded a precipitous drop of seven points in our survey, likely a hangover from the turmoil
3 that embroiled the company a few years ago and uncertainty as it integrated major acquisitions from 3PAR and LeftHand into its product lines. We suspect that the preference for large, established IT vendors with broad infrastructure portfolios at least partially stems from the fact that two-thirds of our respondents have completed or are planning for consolidated storage designs, in which a few centrally managed systems hold the bulk of their important data. Putting most of your eggs into a few baskets tends to reduce your risk tolerance and increase the appeal of a familiar vendor from which you already buy servers, management software, and services. The same pre ference for one-stop, vertically integrated IT superstores also explains the use of vendor- supplied storage management software and comprehensive IT management systems over point products. But there s no room for complacency. Big storage vendors need to watch for a phenomenon we discussed in our latest State of Servers report. Specifically, cloud service providers are more open to innovative hardware architectures and less tied to big-name vendors. As they constitute a larger share of the market, CSPs begin to shift industry dynamics and technology direction, upsetting the established vendor pecking order. CSPs are more likely to build distributed, scale-out storage systems using either whitebox components or appliances from less-costly startups or Asian OEMs and could provide an opportunity for smaller firms, like Coraid, Nimble, and Nasuni. While our survey shows market penetration for all but the largest storage vendors still only in the single digits, much like in the server and networking markets, the disruption caused by the shift to public and private cloud infrastructure provides opportunities for some fresh faces. Tale Of Two Markets Although the overall storage market is in the doldrums, one corner is absolutely on fire: solid state. Looking at component shipments for both consumer and enterprise hardware, IHS isuppli found that in the first quarter, SSD shipments were up across the board. Its SSD market estimate reports that SSD deployment rose not only in the enterprise segment but for desktop and notebook PCs and industrial markets, such as aerospace, automotive, and medical electronics. All told, SSD shipments in the first quarter amounted to 11.5 million units, up 92 percent from 6.0 million the same time a year ago, writes storage analyst Fang Zhang. The shipments include standalone SSDs as well as the NAND flash component used together with hard-disk drives to form cache SSDs or hybrid drives. In contrast, isuppli found that hard disk drive (HDD) shipments increased only 7%, to 16 million units in the quarter, fueled largely by enterprises. Consumer shipments fell because of less demand for PCs and displacement by SSDs. While mobile devices still account for the majority of flash memory demand, DRAM exchange estimates that SSDs, an increasing number of which end up in servers and storage systems, will account for about one-quarter of the flash market in 2014, with higher growth than any other flash memory segment. Overall, it predicts that the total market for flash memory chips will increase by more than 13% this year, on top of a similar double-digit increase in Micron Technology, now the world s second largest memory manufacturer, noted in its fourth-quarter earnings conference call in October that, measured by total bits, flash sales increased 23%, driven primarily by the enterprise space. It forecast an enviable five-year compound annual growth rate in the low to mid-40% range in its latest first-quarter conference call. Translated: Shipped SSD capacity could double every 18 to 20 months for the next few years. This is apparent in our survey results, where the percentage of respondents using or evaluating solid state in servers, storage arrays, or both rose eight points, to 68%. Forty percent already use SSDs in disk arrays, and 39% run them within servers, up eight and 10 points, respectively, since Still, solid state penetration isn t deep. Only 20% of respondents have deployed SSDs in more than 40% of their arrays, while just 13% have them in more than 40% of their servers. Still, both figures represent a four-point increase since our 2013 survey. Storage Growth Spurt It s not just enterprises in a capacity bind. In its The Digital Universe in 2020 report, IDC says the overall volume of digital bits created, replicated, and consumed across the United States will hit 6.6 zettabytes by That represents a doubling of volume about every three years. For those not up on their Greek numerical prefixes, a zettabyte is 1,000 exabytes, or just over 25 billion 4 TB drives. As to what s driving demand, greater use of cloud services and social networks and the proliferation of smartphones as information clients play a part. Migration of all media, particularly TV, from analog to digital formats is a culprit, too. But what s really coming at us like a freight train is machine-generated data, notably security images and information about information. This last bucket includes everything from the Internet of things (IoT), in which devices generate information about their operations and environments, to analytics software that must crunch vast troves of raw data to produce the insights businesses crave. In its report, IDC says that one of the ironies of the digital universe is that as soon as in formation is created or captured and enters the digital cosmos, much of it is lost. It estimates that 18% (an amazingly precise measure for such a vague concept) of the aggregate data would be valuable if it were tagged and analyzed, although less than 0.5% actually is.
4 This digital data universe doesn t just fuel the need for storage. Intel executives like to point out that 600 smartphones generate enough traffic and data to occupy one server. Add a few hundred million smartphones, and you ve just created the need for hundreds of thousands of servers and petabytes of storage. Double-digit capacity growth, along with the increasing diversity of data sources (IoT), clients (mobile), storage repositories (on-premises consolidated arrays, scale-out nodes, cloud services) and applications (legacy, mobile, PaaS/SaaS), creates problems and opportunities for IT: Applications, especially for mobile devices, are getting more sensitive to variances in storage performance, which means storage architectures must be optimized for both performance and capacity. Mobile applications also create new challenges in providing remote and cloud access to data repositories. Scaling capacity without equivalent upgrades in capital equipment or operational (personnel) budgets drives interest in less-costly and easier-to-manage scale-out storage designs or deduplicated distributed object stores (systems like Ceph and Actifio). Use of cloud services can create data silos, hence the need to integrate cloud-based storage, applications, and services into an on-premises enterprise storage infrastructure. More data, as well as more sources of data, creates the need for better consolidated information management software and (big) data analysis tools. These challenges aren t insurmountable even on tight budgets, thanks to the proliferation of solid state, scale-out systems, cloud gateways, and storage virtualization. Still, it s a balancing act because these days, compromise is a dirty word just look at Washington. In the storage world, this means app developers and users want it all: blazing performance and unlimited, dirt-cheap capacity. Solid state storage has done more to improve performance than any other technology since the hard disk, particularly for random I/O. In fact, Radhika Krishnan, VP of marketing at Nimble Storage, calls flash the most disruptive digital storage technology ever. We agree, and would add that the benefits of flash mean more workloads are moving to silicon as the price per bit declines. But Krishnan says storage buyers tell her they want both performance and capacity, and given the capacity growth rates we cited above, it s hard to argue. As flash densities increase and costs plummet, some industry experts, like John Scaramuzzo, general manager and VP of SanDisk s enterprise group, argue that we re on the verge of all-flash datacenters. Although flash memory prices declined to less than $1 per gigabyte for consumer SSDs, that s still two to three times more than enterpriseclass solid state drives, writes Howard Marks, founder of storage consultancy and independent test lab Deepstorage, in a blog post. But aside from the price differential, Scaramuzzo says the hard drive scaling technology is running out of gas. He contends we ll see 2.5-inch (SFF) SDDs in the range of 4 TB to 8 TB by year s end and 16 GB soon afterward. According to Kevin Dibelius, Micron s director of enterprise storage, that figure is conservative 25-TB drives are on Micron s near-term road map using existing 16-nanometer process technology. Eye-opening claims to be sure. But does flash capacity still come at the cost of reliability and data protection? Yes. Krishnan points out that high-density flash designs achieve capacity at the cost of media endurance (how many times a memory cell can be written to before failing) and data resilience (the ability to tolerate random bit errors and dying memory cells). Essentially, solid state can give you hundreds of terabytes of capacity or disk-like longevity, but not both at the same time. To get technical, this is because of an inherent wear-out mechanism in flash technology caused by repeated tunneling of electrons through an insulating layer at relatively (at least for semiconductors) high voltages. The primary means of improving flash density, and hence capacity, has been through tighter fabrication geometries and via multilevel cell designs (MLC), in which each memory location can store more than 1 bit of information, However, both approaches compromise reliability and durability. This is why most major hardware makers are betting on hybrid arrays. It s an optimization exercise that attempts
5 to deliver the best of flash and hard disks in one box, since the cost factor still favors the latter and will for the foreseeable future. If we assume that SSD prices will fall at their historical 35% annual rate and hard drive prices will fall at a more conservative 15%, by 2020 the enterprise SSD will cost almost 13 cents a gigabyte, more than the hard drive costs today, while the 20 TB drives the hard drive vendors are promising for 2020 will cost under 3 cents a gigabyte, says Marks. The price difference will have shrunk from 30-to-1 to around 5-to-1. Is that enough parity to make Scaramuzzo s vision of a disk-free datacenter a reality anytime soon? Probably not. However, flash will earn a growing role in storage architectures by delivering much faster I/O (particularly for reads) and lower power consumption compared with spinning disks. Adding capacity doesn t significantly increase power draw, particularly since intelligent SSD controllers can automatically idle inactive NAND chips and instantly light them up when needed. This rapid access to cold data is another factor Scaramuzzo cites for flash in Tier 2 and 3 data stores. Flash provides instant access, he says. You don t need to keep an HDD spinning all the time. Micron already sees high demand for lower-durability drives for what Dibelius terms read often, write few applications. Enterprise SSDs can withstand a lot of write cycles, typically about 10 fills a day. This equates to rewriting every memory cell 10 times, or almost 4,000 times per year. But Dibelius says customers, particularly big cloud service providers, are asking for less-expensive devices good for as little as one fill per day, a write rate well within the specifications of consumer-grade MLC, or even TLC (triple-level cell) flash chips. He says high-durability (10-fill) drives using much more costly SLC (single-level cell) devices now account for only about 10% of Micron s demand. Reiterating Scaramuzzo s point about idle data, Dibelius attributes much of the growth in read-intensive applications to the use of flash as cold storage. Most of our respondents are using solid state selectively. Of the 63% deploying or evaluating SSDs, 60% use or will use it to improve overall server performance. The majority of those using flash within servers, 83%, opt for SSDs, with only 14% using PCIe cards, unchanged since last year. Just 20% have SSDs or flash cards installed in more than 30% of their servers, also unchanged, a fact we find surprising given price erosion of 30% to 50% in flash drives over the past year. Although we didn t ask about allsolid state systems, in light of other data, we suspect most respondents are opting for a hybrid approach, in which flash acts as either a fast cache or automatically tiered repository for hot data and I/O-intensive applications. A 30/30 rule applies to the 62% of respondents with or evaluating flash in disk arrays: 30% have deployed or will deploy flash in more than 30% of their systems, up two points. Our data s distribution implies that flash penetration in enterprise arrays is around 25% of all arrays across respondents, little changed in the past year. Of course, these arrays probably have more flash (and disk) capacity, but the data underscores that IT organizations are using flash judiciously. Indeed, one of the advantages of hybrid storage systems is the ability to easily and nondisruptively vary the mix between flash and disk in a particular system. Krishnan says that somewhere between 10% and 40% of typical workloads need data in a hot (flash) tier, but by tuning the ratio for a particular application mix, IT can make hybrids perform like an all-flash system. She says Nimble s systems can migrate data from HDD to flash in less than a millisecond. Good News, Bad News The good news for vendors is that, while SSDs accounted for 4% of capacity sold in 2012, it s growing at 60% per year versus 10% to 20% for disk-based systems, according to Coulter of the 451 Group. Keep that pace for a few years, and solid state becomes an appreciable fraction of purchased storage capacity. The bad news for standalone flash startups? We re already seeing signs of market disruption, notably the disastrous reception Violin Memory s IPO received on Wall
6 Street (down 22% from its initial price on the first day of trading). It went on to post terrible first-quarter financial results, which led to the sacking of its CEO and defection of several other C-level executives. Violin s stock now sells for less than half its IPO price at the end of September, and the company appears to be in a death spiral. And it s not the only one: OCZ filed for bankruptcy in December, and Fusion-io, hit with declining revenue and quarterly losses, is also playing musical chairs in the C-suite. The problem for pure-plays is that big storage vendors have made major flash acquisitions in the last couple of years, solidifying their solid state portfolios. Cisco nabbed Whiptail, EMC bought XtremIO and ScaleIO, IBM scooped up Texas Memory, SanDisk bought Smart Storage (which is how Scaramuzzo got there), and Western Digital added STEC and Virident. HP is also beefing up its 3PAR line with all-flash arrays. The only notable names left off this list are NetApp and Seagate, both of which are regularly rumored to be sniffing around the remaining point-product companies Kaminario, Nimbus Data, Pure Storage, Skyera, and Solid- Fire for a possible buyout. Jay Kidd, senior VP and CTO at NetApp, calls it the Hunger Games for the all-flash market and says the coming year will be a much more difficult environment for flash startups. An exception: companies that promote hybrid architectures, where flash systems are important acceleration components between application servers and bulk disk (or cloud) storage tiers. This category includes Nimble, which has gone public, and privately held Avere and Tegile. While they appear to have more sustainable niches, 2014 will be a pivotal year for flash specialists of all stripes. Can they compete with big storage vendors that have built or acquired substantial flash portfolios? Do they venture into the public equity markets? Or do they try to hold out for another year as independents, hoping their VC funding and unique technology sustain them and catalyze growth in customers and sales? Our take is that enterprise buyers will be wary of the orphan risk and inclined to stay with established vendors that have plugged the flash gaps in their portfolios. Whether cloud and other service providers, which often value vendor innovation more than stability, will make up for that lost business remains to be seen. Bridge To The Cloud Speaking of the cloud, in many shops, enterprise IT itself is starting to look a lot like a cloud service provider, aiming to compete in cost and agility. NetApp s Kidd sees this phenomenon as one of the top IT trends in 2014: The bar of service is being set by external providers, he says. Now IT needs to up its game, and as more organizations build private clouds with infrastructure shared across multiple business units and applications, enterprise storage architectures will start to emulate those of public cloud providers. This has several ramifications: Scale-out systems will displace monolithic arrays. Distributed file systems running on cloud stacks will turn compute nodes into storage nodes. Use of object storage will increase. Cloud storage will become an extension of onpremises systems. Scale-out storage has been a feature in our past few storage reports, and like solid state, it s gone from niche to
7 STORAGE Market Watch: Storage All is not bleak in the storage business. IDC s estimates show success varies widely depending on which end of the storage market a vendor is in. The firm segments storage products into three price ranges: less than $25,000, $25,000 to $250,000, and more than $250,000. In 2012, the entry category was responsible for [approximately] $4.7 billion but has good growth over 10%, says Chuck Hollis, chief strategist at VMware. The midrange category is larger but growing more slowly: $11.4 billion, with a humble 1.6% growth rate. And big iron is responsible for $7.6 billion and a very modest growth rate of under 1%. EMC has a big lead in the top two price bands, and is currently behind Dell and fighting it out with HP for the No. 2 spot in the entry-level category. Looking just at the network-attached SAN, NAS, and unified storage products, Gartner paints a more encouraging picture, particularly for NAS filers. Its May estimate for the 2012 market calculated revenue growth of almost 20%: The pure NAS market continues to grow at a much faster rate (15.9%) than the overall external controller-based (ECB) block-access market (2.3%), in large part due to the expanding NAS support of growing vertical applications and virtualization. Breaking the market down by protocol, NAS filers represent almost two-thirds of the business, with FC SAN mainstream. All the major storage vendors offer some form of scale-out hardware/software system. Coraid CEO Dave Kresse says scale-out is particularly popular with service providers because they have massive volume requirements, unpredictable scale and rates of growth, widely variable and unpredictable workloads, and a need to tightly control opex costs and administrative overhead. We see all of these as challenges in enterprise storage environments, too. While only 41% of our respondents have deployed scale-out systems, we expect that number to increase in the coming years as the architectural pendulum swings from monolithic storage systems to distributed pools composed of locally attached storage to support private and hybrid clouds. A major catalyst is the growing interest in, and maturation of, OpenStack, fueled by a combination of factors: widespread vendor support, particularly endorsement by major open source arms merchants like Red Hat; rapid and predictable upgrade cycles; a growing ecosystem of commercially supported, enterprise-grade products, including Cloudscaling, Mirantis, Piston Cloud, Red Hat, and SUSE; and maturing distributed storage software like Ceph, Gluster, and Lustre. hardware just under 30% but growing about 13 points faster, at 28.7% year over year. Our data corroborates the trend, as the share of respondents using NAS for 50% or more of their storage rose three points, to 26%. Still, Gartner s estimates point to a slowdown in 2013, with its first-quarter figures showing virtually no revenue growth over the prior year. Gartner s findings largely mirror IDC s standings, which place EMC, NetApp, IBM, and HP, in that order; however, Oracle and Netgear occupy the fifth and sixth positions. Illustrative of strength at the low end of the market, Netgear leads, by far, in total capacity and units sold, with over 3 PB and 137,000 units shipped in 2012, about 7% more in capacity and 67% in units than EMC. According to Gartner s analysis, the raw capacity growth rate, at 15.8%, was the lowest in recent years, largely because of budget constraints and the necessity to find greater storage efficiencies throughout the infrastructure. However, the firm expects that capacity growth will continue in the range of 35% to 45%, and it may yet exceed 50% in future years. Note that the Gartner and IDC estimates for capacity growth are almost identical, at around 16%, and align with our data. Taking a weighted average of our data on storage under active management and using the midpoint of our capacity ranges as a proxy for all responses, we calculate capacity growth at about 20%. Cloud Control Enterprise use of cloud storage is arguably already mainstream, as 47% of our respondents, up eight points since last year, use these services. Primary uses are application-specific needs, backup and recovery, and archiving. Data security remains the biggest concern, identified by 86% of our respondents. The four-point uptick is understandable given the steady stream of NSA spying revelations. Adoption is broad but not deep. Of those with knowledge of their organizations cloud storage allocations, 88% say half or less of their incremental storage capacity will go to the cloud. Today, most cloud storage is tied to specific applications designed to work with cloud services, like a SaaS backup and DR product, or custom PaaS app with a cloud back end. However, as IT becomes more comfortable with the technology and economics of cloud storage, most will want to integrate it with existing on-premises storage pools using a cloud gateway. So far, only 21% of our respondents overall have deployed gateways. Of those using cloud storage, half use some form of gateway, either a software appliance like the AWS S3 or hardware boxes such as those from Ctera Networks, Panzura, Riverbed, or TwinStrata. For the rest, this is one area to address in 2014.
8 The Year Of Software-Defined Storage? If 2013 was the year of software-defined networks, this could be the year storage follows suit. There are compelling commercial examples of comprehensive storage virtualization, including Dell s Compellent Fluid Data Architecture, EMC s ViPR, Hitachi s VSP, IBM s SmartCloud Virtual Storage Center, and NetApp s Clustered Data OnTap. Some vendors incrementally turned block or file virtualization products into comprehensive systems; others, like EMC s ViPR, are grandiose visions that have only recently materialized into actual products. Half of our respondents virtualize some storage, though legacy apps mean few can put all their resources in a single virtual pool. As the technology matures and more IT organizations see the benefits of infrastructure independence and information mobility, where applications and their data aren t tied to a specific piece of hardware, that number should increase. Key SDS drivers are private clouds, already in production or testing by 77% of respondents to our 2014 Private Cloud Survey, and more complex data management associated with big data analytics applications. Both fuel the need for more efficient and flexible data management and in turn increase interest in SDS. If you re a VMware shop, start incorporating virtual volumes and VSAN. These can allow you to turn VMs into distributed storage nodes for virtualized applications. Also, test the SDS software your incumbent storage provider offers. For EMC customers, this means ViPR, an admittedly big, complex product. Start small identify a few usage scenarios and subsets of ViPR features, like vcenter integration using VASA or centralized storage management. HP, IBM, and NetApp shops should take a similarly incremental approach. Don t try to boil the ocean with your first SDS deployment, but do turn up the heat. OpenStack users should start testing distributed file systems and use OpenStack s storage services to make servers do double duty as both compute and storage nodes. Although the heady days of double-digit revenue growth won t be returning to the storage business any time soon, that doesn t mean the industry is stuck in a rut. Far from it. The move from magnetic to solid state storage is as significant and disruptive to enterprise IT as the mobile device revolution has been on the consumer side. But solid state isn t the only big shift in storage. The translation of storage into an abstract virtual resource is following the same model that upended the server business. The big-picture goal for 2014: Redesign your storage infrastructure into a dynamic, resilient, scalable, cloud-like pool that incorporates solid state, storage virtualization, and cloud services in ways that are transparent to applications and end users. It s a tall order and a multiyear project, but there s no time like the present to get started. SEI specializes in flexible on-site data center maintenance for servers and storage, helping IT departments maximize support services to meet current and future business needs. For more information, go to seiservice.com/enterprise-storage-support Posted with permissions from the February 2014 issue of InformationWeek, United Business Media LLC. Copyright All rights reserved. For more information on the use of this content, contact Wright s Media at
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