EMC’s Great Balancing Act
Can EMC make risky flash plays and avoid a public cloud backlash without shooting themselves in the foot? Tom Brewster asks the company’s top brass
Like any IT behemoth, EMC wants to protect its market dominance. At the same time it has to prove it is on the cutting edge of the industries in which it plays. If you don’t innovate when you’re at the top, you risk losing your crown to market revolutionaries.
Two years ago, it was arguable EMC was not the most creative-minded tech giant, as it was pushing private cloud data centres, where its super-charged boxes were still needed. It was not backing the scale-out, web-scale data centres that companies and service providers hoping to build cloudy infrastructure were getting hot under the collar about.
But that has changed. EMC is opening its mind – as the EMC World 2012 logo showed last week (see left). It is now, wisely, backing the hybrid model that so many analysts and industry players believe is the right option for enterprise. To shift strategy, EMC has had to expand outside of its core storage box offerings, but it has done so at speed and certainly not been left looking sluggish.
Straddling the markets
Having racked up a whole bunch of products in different areas of the data centre, however, the company is having to perform a pretty special balancing act, in which it keeps its high-end boxes popular, ensures it shoves flash in the right parts of the data centre and profitably pushes its scale-out architecture.
If the company chases one of those strategies too hard, it places the others at risk. For instance, if it pumps most of its effort into scale-out kit like its Isilon gear, it risks backing a market that is detrimental to sales of its VMAX kit. But if it makes VMAX its central focus, it loses relevance in the web-scale market that is growing at such a phenomenal pace – much faster than the chunky box industry. EMC has to straddle both markets and that is no easy task.
Can it continue to do so? Its answer to this is simple: we want to, and will, cover every area that our customers are interested in. “We are not selling one product to one company,” EMC’s chief strategy officer Barry Burke (pictured) told TechWeekEurope. “We are building products for different users with different requirements.
“If a customer buys a VNX, Isilon or VMAX, we don’t really care. We mostly care that they picked one of those three and not a competitor product. That is really the objective.”
It would be fair to assume then that if companies flock from the old scale-up architectures in favour of web-scale set-ups, EMC will follow them. But let’s be clear, there will be a market for kit like the VMAX series for the foreseeable future.
Rather than telling its clients what they want, following the customer is a strategy that is paying off. It’s a strategy that requires plenty of flexibility, but EMC has the bank balance to buy its way into different markets and has a solid reputation of investing in R&D.
Flash fear, cloud cowering
But there are areas where EMC isn’t really following the customer – flash is one of them. From one aspect it is going after user demand here – by pushing kit like the VFcache PCIe card at servers and its Isilon NAS systems, EMC is certainly targeting the scale-out segment.
But in purchasing XtremIO, EMC has taken a risk. The all-flash array market is not really a market yet. It’s a niche area. As far as TechWeekEurope can tell, there are fewer than five companies operating in the sector. Furthermore, XtremIO hasn’t even released a proper product yet, and the first to hit market – Project X – will not land until next year.
But EMC says it is no risk. For Joe Tucci and Co, it won’t just be acquiring a product set, it’ll have a talented bunch of scientists coming over from XtremIO as well as some undoubtedly handy patents. Even if Project X’s eventual product does not sell to many – it is really one for the high-end only – this is one risk that looks unlikely to have a cataclysmic outcome.
What’s more concerning for EMC is its denial of the popularity of the public cloud. “Where we are really trying to differentiate is not from the private cloud, but from the public cloud,” Burke said. “The public cloud isn’t necessarily being designed as a platform for enterprise IT. You can run neat things there but it’s not architected with the same high-availability guarantee, access time performance, security, data integrity.“Google still says, right there in the contract, the availability of your applications is not guaranteed.”
EMC has already shifted to saying hybrid is the future. It may have to shift again, if Amazon, Rackspace, Google and others get their way. It already has some of its SAN kit in Rackspace, TechWeekEurope understands, but one needn’t wonder too much on why the storage giant is pooh-poohing the public cloud so much. A threat to its classic, big box business? One could presume so.
Making friends… or making others look good
But the real key to EMC’s future success and continuing balance is in opening up to others. The message it drove home last week was this: we’re not the arrogant business we used to be – we want to play nice with everyone.
It didn’t make a song and a dance about it at EMC World, but there was a big push from the vendor to incorporate its rivals’ gear. For instance, the FAST VP for VMAX supports IBM System z mainframes and IBM i servers. This makes data much more mobile and that’s something customers want.
VSPEX, a channel-only offering, is another example of this fresh openness from EMC. The quick-fix private cloud product includes kit from Brocade, Cisco, Microsoft and others. EMC also told TechWeekEurpe in April it was planning to open up the project to more vendors in the future.
The company is maintaining some arrogance, saying it is “making the bad guys look good”, but it knows it has to respect others’ offerings. CEO Joe Tucci summed it up perfectly when issuing a response to Fusion-io’s EMC bashing over where to put flash: “Anytime – and Fusion-io does this – you have a message out there that this is the best way to do storage or anything IT, it is foolish, it is darn right foolish.” EMC is being careful with its words – it knows it has to respect other vendors and their vision for the future of IT.
“It’s not our way or the highway anymore,” Burke said. “We used to have a healthy burden of arrogance, not any more… we are trying to be agile.”
No matter how open EMC gets, it will still come up against companies that don’t want to play nice. Oracle, which covered Las Vegas taxis in anti-EMC adverts last week, may be one obstacle. Burke thinks that if Oracle operates in a closed way, as it has been accused of doing, it will backfire on Larry Ellison’s firm.
“We’re not going to go and fight the open battle with Oracle, it is users who will do that,” he added. “Larry is still keen on boxing everybody out. I don’t think users are going to accept that… Oracle transaction processing is not the centre of the universe.”
But EMC’s transmogrification over the past two years is clearly paying off. Its 20PB deal with Facebook – revealed to TechWeekEurope last week – is a clear sign of that. Two years ago, you wouldn’t have thought Facebook would have been interested in EMC. Now it seems Mark Zuckerburg’s firm is willing to splash out on EMC machines rather than go with its own Open Compute model for all areas of its infrastructure. It marks a significant moment for EMC.
EMC is walking a tightrope and doing so rather well right now. If the public cloud does become even bigger across enterprise, however, EMC will have to perform another skilful balancing act. But it’s already proven it can successfully pivot without falling.
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