EMCLeaks – Disruption by a Billion Benjamins

emcleaksStorage industry muckracker Chris Mellor was at it again, digging deeper than anyone could imagine, finding and publishing the amount of money EMC spent on stealth startup DSSD. I highly recommend reading his piece, but if you need to know now, it was $1Billion.

That is a lot of money for a startup without customers and I believe it was spent for very good reasons. Here is how I see it:

1) RIP all disk arraysThe flash array business is growing rapidly and the all-disk array business is flat, or declining. In other words, flash-based arrays are kicking all-disk arrays to the curb faster than you can say “all-disk is dead”.

2) Pure Storage is putting a major hurt on EMC in head to head competition. This statement is inflammatory, but I believe it’s accurate.

3) neoXtremIO is doing OK, but it is not a dominating product. EMC realizes it needs one and believes DSSD could their Neo.

4) EMC realizes that the enterprise storage industry is in for a major shakeup over the next 3-5 years. EMC will not allow itself to be left on the sideline if its current product lines become dinosaurs overnight.

5) Product life-cycles and customer buying-cycles for flash-based products are being extended from 3 years to 5 (ala Pure & Tegile), and in the future may be extended even further. EMC needs products that compete on that basis and DSSD may be a platform that provides extended life-cycles for their customers.

6) steve-carell-alice-cooperDSSD will allow EMC to compete for high-performance analytics opportunities that might otherwise go to Exadata or other HPC systems by offering a lower-cost, slightly-lower-performance flash storage alternative to all that costly RAM.

Comments

  1. Marc

    EMC are at least prepared to take the risk of acquiring companies. Not all of them work out as well as they would like, but at least they do it. EMC is almost like a VC company; invest/acquire and try and build a business around it. Some fail, most work. There may be other issues for customers (like compatibility, training, data migration, increased management etc), but at least their customers have plenty of products to choose from.

    • Yes I agree completely, they have maintained their industry leadership through acquisitions. Some have been spectacular for them, such as VMware, Data Domain and FilePool. As always, it will be interesting to see what they do with DSSD too.

  2. Jeremy DeBauche says:

    Marc, it’s not that you’re statement about Pure and EMC in competitive situations is inflammatory, it’s just plain inaccurate. What are you basing that comment on, input from Pure? There’s a reason our marketshare lead with XtremIO over Pure increased to ~12% at the end of 2014 from a 1% lead in 2013 and it’s not because they’re, as you said, “putting a major hurt on us.”