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August 16, 2010

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marc farley

Good post Chuck. There is no doubt that the industry is changing and this move by Dell clearly demonstrates that. Overall it means there will be fewer competitors figuring out how to partner and compete. Those that walk that fine line the best are likely to have the most success. Dell's position is to be open and to try to work with everybody (although the HP/Dell rivalry is bitter at times) and I believe they will figure it out, just as they did following the EqualLogic acquisition.

Chuck Hollis

Hi Marc

I enjoyed your post as well on the topic, and -- yes -- you're the guy that's been hit by lightning three times. Must be your magnetic personality?

Like I said, this story is more about what's happening in the industry as it consolidates. And, yes, Dell will likely find a way to make this all work.

Best of luck going forward, Marc. Let me know if you end up at another company -- good basis to buy stock!

-- Chuck

Chance Bolt

Hey Chuck,

What gives? 3PAR just gives Dell a mid-range platform to battle HP? Dell has no alternative to VMAX?

EMC has been dueling with 3PAR for high-end (DMX/VMAX) customer deployments for years. I know. And in your own blogs too:
http://thestorageanarchist.typepad.com/weblog/2009/08/2018-perspectives-on-compellent-3par-and-others.html

Maybe EMC's collective head is in the sand, but I doubt it. With Dell betting $1B on 3PAR's high-end storage platorm, more likely you'd rather not have Sym customers wonder why.

Please give us some credit.

- Chance Bolt

Chuck Hollis

Hey Chance.

Wishful thinking on your part doesn't change facts. Few people would confuse a 3Par with a VMAX, present company excepted. How about some thoughtful opinions, rather than a random competitive rant?

Much of the analyst opinion was the same: 3Par couldn't find a way to grow outside of its niche, and couldn't turn a consistent profit. They did well to get the price that they did.

As far as giving you credit, that has to earned. Given your comment, it's not going well for you ...

Chuck

Chance Bolt

Chuck,

Thank you for the response. Sorry to challenge you like that, but I needed your persuasive best to help me defend our VMAX decision to the bosses -- those Dell guys are gonna be all over them.

If you can point to those analyst options, that would be great. Gartner especially would be valuable.

Many Thanks,
Chance

Chuck Hollis

Hi Chance

OK, now I think I know where you're coming from.

A few things to help you?

The best analysts don't post their stuff publicly, you usually have to pay for their opinions. I would suggest Ben Woo from IDC, Dave Vellante from Wikibon and Steve Duplessie from ESG. Reaction was remarkably consistent -- nothing changes very much.

3PAR had maxed out at about $200m revenue and a handful of customers, and nothing was changing much. $200m might sound like a large number, but in the IT hardware biz, it's almost a rounding error. Not bad tech for a company their size, but hardly revolutionary.

Historically, Dell has taken a l-o-n-g time to digest their acquisitions and make a go of them -- that is, if they're going to. For example, EQL took a very long time between acquisition announce and creating a reasonable offer in the market -- but they eventually got there. Maybe Dell will come calling to talk about their new acquisition sometime during 2011, maybe not.

As storage environments become bigger, the context around the product becomes more important: integration with management tools, security, backup, operating systems, hypervisors and applications for example. High quality services before, during and after the implementation. When you're talking VMAX, you're not just buying a box -- even though it's a pretty differentiated box. None of this has been particularly a strong suit for either 3Par or Dell in the past.

Going deeper, if you're forced into a feature-by-feature comparison vs. price, you'll find that we're pretty good at making our case against them and similar competitors that are far smaller in just about every aspect. Usually it doesn't get to that, though.

My apologies for pegging you as just another random competitive sniper. You're right, eventually Dell will come calling -- and we'll make sure you're prepared.

Thanks again!

-- Chuck

Greg Roody

Come on guys, when has this industry NOT been interesting to watch? 3PAR is just the latest example of the consolidations, mergers, and crash-n-burns that has been going on for what seems forever (I have a lot of gray hair, much of it from EMC ;) ).

Dell will do just fine. 3PAR has done well (congrats guys). EMC, HP, Oracle, HDS and IBM will just keep on doing what they do. The world of IT or Storage won't change over this, at least not this year.

I liked the way Steve Duplessie put it. A shift in aggravation, but not new aggravation. And yes, I did paraphrase it to keep the color polite. ;)

Bob D

Could another storage startup see any significant measure of success in this matured industry? Or is that era over?

The last two years have seen a huge consolidation for our industry.

I can think of only two independent storage vendors that I see actively selling to the enterprise here in S.Cal, Compellent and to a lesser degree Pillar. The sales reps at EMC and Netapp don't see them as a big threat.

Chuck Hollis

Bob D

"Could another storage startup see success ...?"

Hard to eliminate the possibility entirely, but also very hard to come up with a scenario where this could happen.

Usually, the motivating factor is (a) some sort of disruptive technology, and (b) established players asleep at the wheel.

Even if (a) happens, (b) has to happen as well. For an interesting thought exercise, consider the potential answers to this question for technologies such as servers and networks in addition to storage.

Thanks!

-- Chuck

David S

Dear Chuck,

credit has to be earned I fully agree with you on that, but I believe Dell has already earned that.

I do believe that Dell and EMC have around 24.000 mutual customers, Dell does about 25-30% of your midrange revenue on clarion and celerra through the OEM channel.

Looking at gartners magic quadrant for midrange we see EMC in the top right followed by Netapp and then Dell.

Your statements that we operate within the smaller customer regions where customers value ease of use and simplicity over technologically strong solutions kind of undermine your own portfolio... because that's what Dell is selling in that space.

In all honesty I hope that our relationship will last for a good time to come and we can keep our focus on our mutual competitors rather than belittle eachother.

Kind regards,

David


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Chuck Hollis


  • Chuck Hollis
    Chief Strategist, VMware Storage and Availability Business Unit
    @chuckhollis

    Chuck works for VMware, and is deeply embroiled in all things software-defined storage these days.

    Previously, he was with EMC for 18 years, most of them great.

    He enjoys speaking to customer and industry audiences about a variety of technology topics, and -- of course -- enjoys blogging.

    Chuck lives in Holliston, MA with his wife, three kids and four dogs when he's not traveling. In his spare time, Chuck is working on his second career as an aging rock musician.

    Warning: do not buy him a drink when there is a piano nearby.
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