IDC ExpertROI SPOTLIGHT Nimble Storage Leverages Operational Data to Drive Its Business with Analytics Delivered by HP Vertica Sponsored by: HP Matthew Marden September 2014 Overview Nimble Storage (Nimble) of San Jose, California, is using the powerful analytical capabilities of HP Vertica to leverage in-field operational "big data" to drive its business and better serve its customers. According to Nimble, analytics enabled by HP Vertica have helped it both improve its hybrid storage solution and better understand where business opportunities exist. Nimble's Adaptive Flash platform combines the performance of flash-only arrays with the capacity of hybrid arrays for workloads in a virtualized or cloud environment. Nimble leverages operational analytics to engage in ongoing communications and discussions with its customers about their storage environments through the InfoSight automated cloud-based management and support system. Nimble has been using the HP Vertica Analytics Platform to analyze its operational data in near real time since January 2014. According to Larry Lancaster, chief data scientist at Nimble, the company has leveraged improved analytics performance with HP Vertica to gain valuable insights that drive business and allow Nimble to better serve customers. Lancaster said that with HP Vertica, Nimble can offer valuable insights to customers in a timely fashion, including recommendations about how to allocate flash-only and hybrid array resources for optimal workload balancing. Nimble has leveraged analytics powered by HP Vertica to identify and address Business Value Highlights Organization: Nimble Storage Location: San Jose, California Challenge: Drive growing business with data analytics by better serving customers and giving employees improved analytical tools Solution: HP Vertica Five-Year Cumulative Benefits: $8.05 million (discounted) ROI of 447% Payback in 6.8 months Other Benefits: 50% productivity gain for data scientists Ability to capture more revenue by identifying and addressing business opportunities Reduced hardware costs more business opportunities, thereby capturing more revenue. Further, many of Nimble's employees including data scientists and business analysts have become much more productive. Based on discussions with Lancaster, IDC calculates that Nimble is achieving an average of $2.31 million per year in benefits through its use of HP Vertica, including capturing more revenue, increasing employee productivity, and avoiding IT hardware costs. Over a projected five-year period, this results in a return on investment (ROI) of 447% and a payback period of 6.8 months. September 2014, IDC #251210
Implementation Nimble Storage, founded in 2008, recognized early on that its operational data constituted a significant potential source of business value. As its business has grown in the past six years, Nimble has continually searched for better ways to gather and analyze this operational data about the performance of its products in the field to better support its customers and gain a competitive edge. The amount of operational data Nimble collects and analyzes has expanded alongside its business. Today, Nimble receives roughly 10,000 70,000 data points per minute from each of its arrays in the field. Before deploying HP Vertica, Nimble Storage used a free open source database management system to analyze this data. However, the company recognized that this solution could not scale sufficiently or cost effectively enough to support its growing business and aspirations for using the data and concluded that it needed to invest in taking its big data analytical efforts to the next level. In 2013, Nimble chose HP Vertica as its analytics platform because of its performance capabilities, ease of scalability, and cost efficiency. Lancaster was familiar with the benefits of HP Vertica from his previous experience. "I've used HP Vertica at two previous companies, and I was impressed from the start with the performance benefits it provided," he said. "What piqued my interest was its column-store efficiency. But the more I used it, I realized the extra performance benefits you could gain by using HP Vertica properly were another order of magnitude greater." Since deploying HP Vertica, Nimble has leveraged the solution to make its staff more productive, better serve customers, and realize new business opportunities, all at a much lower total cost than Nimble's legacy solution. Lancaster praised HP Vertica's impact on his company, saying: "When you start to work as we are [working] with HP Vertica, you realize that you can do things you couldn't do before. And the things you could do before, you can do orders of magnitude better. So we're a great case of actually applying data science to the product life cycle and also to frontline revenue and cost enhancement." Benefits "When you start to work as we are [working] with HP Vertica, you realize that you can do things you couldn't do before. And the things you could do before, you can do orders of magnitude better. So we're a great case of actually applying data science to the product life cycle and also to frontline revenue and cost enhancement." Leveraging operational data to create business benefits is a core tenet of Nimble's business strategy, and HP Vertica has made Nimble's efforts more effective and efficient. Nimble uses analytics to understand the distribution of its customers' workloads and how customers access storage, which helps it design storage solutions that match its customers' storage use patterns. As Lancaster explained, "We've built up an enormous data set of real-world use of our product to tell us which approaches will deliver the most benefit to our customers. It would be harder for us to provide the best hybrid storage solution without analytics." HP Vertica provides insights and recommendations to Nimble's customers much more rapidly than Nimble's previous solution. The value lies in HP Vertica's speed the solution's ability to return query results "many magnitudes of order faster," as Lancaster said. He explained that as a result, Nimble's "data scientists and analysts can conduct analytical computations immediately, without having to process the data in a separate environment." 2014 IDC #251210 2
Deepening and Improving Customer Relationships with HP Vertica Nimble is leveraging HP Vertica to provide its customers with insights and recommendations for optimizing their storage infrastructure and simplifying their day-to-day operations, which is a source of significant value for these customers. For instance, Nimble uses analyzed data from HP Vertica to provide proactive monitoring to alert customers about potential storage-related problems before they occur. If one customer is having an issue, Nimble Storage can identify other customers that may have the same issue and notify them. The company can also advise customers on the correct sizing of CPU and cache storage for optimum performance. In making its proactive service recommendations, Nimble factors in disaster recovery when forecasting how much capacity a customer will need. "We can tell a customer roughly how much space they are going to need for disaster recovery on a given type of application because we can look in the field and see the distribution of the extra space that would take and what kind of bandwidth they're going to need," said Lancaster. "We have all that information at our fingertips with HP Vertica." HP Vertica also helps Nimble proactively identify and address customer demand and needs. For example, using HP Vertica's predictive analytics, Nimble can determine when a customer's storage administrator will need to provision new equipment and alert the customer accordingly. Further, Nimble can run "what if" questions either to help a customer or for its own use. Being more proactive with HP Vertica can help Nimble be a better business partner to its customers rather than acting as just a provider of storage solutions. For Nimble, benefits such as new revenue opportunities and deeper customer relationships flow from this enhanced business relationship. Besides Nimble using HP Vertica for customer support recommendations, Nimble's engineers can use data created with HP Vertica to improve product designs based on in-field performance under a variety of workloads. Thus, when a new release changes how product features operate, Nimble can observe how these features perform and use analytics driven by HP Vertica to make any needed tweaks in a timely fashion. More recently, Nimble has made HP Vertica's analytics capabilities available to its customers through an online portal. With easier access to aggregated operational data, customers can better understand their operations and make informed decisions. Nimble has used all these enhanced capabilities with HP Vertica not only to better serve its customers and improve relationships but also to drive its business and capture more revenue. HP Vertica enables this by putting timely analytics in the hands of decision makers at Nimble who can use the data to identify business opportunities and react quickly enough to win additional business. Driving Internal Productivity with HP Vertica Nimble is also using more powerful data analytics with HP Vertica to improve the quality and performance of its hybrid storage products. As Lancaster explained, "Part of our release and development process revolves around the operational data we receive from our products in the field. With HP Vertica, we run queries against the data and use the results to improve or fine-tune the product." 2014 IDC #251210 3
Nimble has increased the productivity of data scientists and business analysts through faster and better analytics. With HP Vertica, these teams can run queries on vast amounts of operational data and get answers in a fraction of the time. According to Lancaster, this is having a substantial impact on the productivity of these employees. "Our data scientists are 50% more productive with HP Vertica. With only a three-node cluster, we're getting subsecond latencies on the smaller queries and sub-10-second latencies on the big ones." Lancaster continued, "HP Vertica has been a game changer for our data scientists and business intelligence team because they can now sit at their desktops, manipulate data, come up with new ideas, and iterate without having to go home and wait for a data query to be run. It's a dramatic productivity increase for highly paid people who should not have to wait to get answers to their queries." "HP Vertica has been a game changer for our data scientists and business intelligence team because they can now sit at their desktops, manipulate data, come up with new ideas, and iterate without having to go home and wait for a data query to be run." Nimble is also benefiting from its use of HP Vertica by spending less time answering calls about its products. "Simple calls about documentation and the like are easy to answer," said Lancaster. "But we also get calls each week that used to take weeks to answer. With HP Vertica, we can now answer the queries in hours, in minutes, or automatically." Better Performance at a Lower Price with HP Vertica Nimble is achieving these business benefits at a much lower cost than with its legacy data analytics solution. Lancaster explained that HP Vertica enables very efficient encoding of data, so low-cardinality columns take almost no space at all. HP Vertica's rich encoding capabilities allow Nimble to reduce the data volume on disk and reduce the number of servers and associated storage it needs. "Over three years, HP Vertica saves us at least 100 servers compared with other databases," said Lancaster. Another benefit is the ease of adding nodes without downtime. According to Lancaster, "The ability to be flexible and expand is critical for someone who is trying to build a large cloud infrastructure because you're never going to know in advance exactly how much storage you're going to need." Nimble also saves on licensing costs with HP Vertica because its fee is based on ingest rather than the number of nodes or cores. Lancaster explained that this allows Nimble to scale its analytics efforts without incurring additional licensing costs: "If I want to do my queries twice as fast, I simply double my nodes, and it doesn't cost me more in software licenses from HP Vertica." 2014 IDC #251210 4
($) Quantifying the Benefits Based on an interview with Lancaster about Nimble's operations before and after deploying HP Vertica, IDC has quantified the benefits the company is realizing from the deployment. When projected over five years, the benefits from increased IT staff productivity, increased business productivity, and IT infrastructure cost savings averaged $2.31 million per year (see Figure 1). FIGURE 1 Average Annual Benefits 2,500,000 2,000,000 $1,089,100 $79,100 1,500,000 1,000,000 $1,145,800 500,000 0 IT infrastructure cost savings Business productivity benefits IT staff productivity benefits Total: $2.31 million per year Source: IDC, 2014 Business Productivity Benefits Nimble has leveraged HP Vertica to make its data scientists and business analysts significantly more productive and also to capture more revenue by better identifying and addressing business opportunities. IDC projects that Nimble is realizing productivity benefits and revenue gains worth an average of $1.09 million per year over five years with HP Vertica. Nimble's data scientists and business analysts have improved their productivity significantly with HP Vertica because they can run queries much faster. This makes their work as a whole much more efficient because near-real-time provisioning of data means that they can work without significant interruptions and they spend far less time waiting for the data needed for modeling and analysis. Lancaster estimated the company's data scientists are now 50% more productive and business analysts are 20% more productive. As Lancaster noted, these employees are well-compensated and highly skilled, so it is a distinct advantage for Nimble to make them as productive as possible. IDC calculates that Nimble is realizing productivity benefits worth an average of $432,100 a year for these teams. 2014 IDC #251210 5
Nimble is also leveraging HP Vertica to improve its products and provide better customer support. Both of these factors help Nimble improve customer satisfaction and make new customers more likely to consider its storage solutions. Further, Nimble is leveraging faster and better data analytics from HP Vertica to improve its ability to identify and address potential business opportunities. These factors are helping Nimble better retain customers and deepen existing customer relationships while opportunistically expanding its customer base. IDC estimates that as a result, Nimble will capture additional revenue worth $657,000 per year over five years. IT Infrastructure Cost Savings With HP Vertica, Nimble has improved its data analytics capabilities to a significant extent, but at a much lower cost than it could have with its previous solution because HP Vertica is priced by ingest rather than node. As a result, with the HP Vertica encoding scheme, Nimble Storage was able to reduce the data volume on disk by a factor of 10 15. Over three years, the company can avoid the cost of 100 servers and the storage associated with these servers, which IDC calculates as savings on IT hardware worth an average of $1.15 million per year over five years. IT Staff Productivity Benefits Nimble is also realizing IT staff productivity gains because HP Vertica has helped it reduce the time spent answering tougher customer calls that previously might have required escalation. Calls that once may have taken 20 hours to answer now may take 4 hours. With an average of one or two such calls a week, the IT staff productivity savings amount to an average of $79,100 per year over five years. Return on Investment IDC projects that over five years, Nimble Storage will achieve total discounted benefits of $8.05 million by using HP Vertica versus a discounted investment of $1.47 million. This results in a five-year ROI of 447%, with payback on its investment in HP Vertica occurring within 6.8 months (see Table 1). TABLE 1 Five-Year ROI Analysis Benefit (discounted) Investment (discounted) Net present value (NPV) $8.05 million $1.47 million $6.58 million Return on investment (ROI) 447% Payback period 6.8 months Discount rate 12% Source: IDC, 2014 2014 IDC #251210 6
IDC conducted several interviews with Nimble Storage to quantify the benefits and investment associated with its use of HP Vertica and created an ROI analysis from the results. IDC calculates the ROI and payback period in a three-step process: 1. Measure the benefits from increased IT staff and user productivity and other cost savings since deployment. 2. Ascertain the total investment. 3. Project the investment and benefit over five years and calculate the ROI and payback period. The ROI is the five-year net present value of the benefit divided by the discounted investment. To account for the time value of money, IDC bases the ROI and payback period calculations on a 12% discounted cash flow. 2014 IDC #251210 7
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