1. So why don't you tell us where you think the markets are at with storage to start?
The storage market, estimated at ~$33B (systems spend without including storage software and services), is witnessing dramatic changes driven by the arrival of flash as a new persistent storage medium, complementing the exclusive role that HDDs have traditionally played within Enterprise storage systems.
For decades, HDDs have done well in helping to address data growth in enterprises as they steadily increased in density, thus helping to store more and more data cost-effectively. However, where storage systems based on HDDs have not done well is in cost-effectively addressing application performance needs. This is because even though HDDs have improved in density, their IO performance has remained by and large unchanged over the last decade or so, with the result that storage systems have had to over-provision HDDs to match an application's performance needs. Consequently, enterprise storage systems have traditionally been good at either delivering capacity or performance cost-effectively, but not both simultaneously.
Flash changes this equation, and is a perfect complement to HDDs. Flash is very good at delivering performance and very poor at delivering capacity cost-effectively, while HDDs are good at delivering capacity but not good at delivering performance. By combining the two into a single architecture, the economics of storage can be improved radically — a well-designed hybrid storage system can lower the capital cost of meeting an application's performance and capacity needs by 60-80%!
Over the next several years, we believe that a massive shift will take place, wherein modular disk-centric storage systems which account for over 70% of all networked storage will be displaced by flash-optimized hybrid storage systems that intelligently leverage the complementary characteristics of flash SSDs and low-cost, high-density HDDs.
2. Do you still see growth in appliances or more in the cloud?
The simple answer is that both will grow. Appliance demand continues to grow quickly as customers deploy private clouds, but even public cloud deployments can benefit appliance demand.
When using the term cloud, we often think about platform providers, such as Amazon and Google that do indeed displace appliances sold by product manufacturers since they build their own infrastructure. However, there are two other kinds of cloud service providers that end up continuing to drive demand for appliances. First, SaaS companies mostly end up aggregating demand from end-users, small and medium businesses and even consumers, into enterprise infrastructure and appliances. Secondly, hosting companies that traditionally used to rent rack space, power and cooling are aggressively migrating their business models to renting virtual machines (and all the servers, networking and storage appliances that come with a hypervisor) or renting virtual desktops or renting DR infrastructure — thus, driving demand for appliances.
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