EMC: Looking for Best of Both Clouds

Jun. 3.10 | About: Dell Technologies (DVMT)

Storage giant EMC’s goal is to straddle the private and public datacenters and being a player in all three phases of cloud service development.

EMC’s Pat Gelsinger, who is president and chief operating officer of EMC’s information infrastructure and cloud services, talked the finer points of the company’s cloud efforts. Speaking at the Bank of America Merrill Lynch Technology Conference, Gelsinger talked about the business balance between cloud computing flavors—private and public.

When you go think about cloud computing, most people think about it today in the sense it’ something over there. Somewhere else, I go move my data center assets and they operate somewhere else. But ultimately, why do people build data centers today? It is based on these attributes of trust, control, reliable, secure. That is why I have my own internal data centers and while there is the promise of this dynamic, cost-effective, on-demand flexible environment over there somewhere. And the real question is can we get the best of both worlds?

That backdrop is behind EMC’s recent V-Plex announcements at EMC World. In a nutshell, V-Plex is focused on virtualizing storage, creating data pools and bridging geographic divides so you can manage information at a distance. According to Gelsinger there are three primary flavors of cloud computing that make up a progression of IT management. Gelsinger added:

We see this journey to the cloud having three distinct phases. Phase one is IT production, which basically is a value proposition of virtualization phase one that simply says, hey, we can take four servers, make it one server with four virtualized environments on it. IT production, do what you do more efficiently.

The second phase of the journey is what we call business production where you begin to say, boy, that worked pretty well. Now how could I do more of my business-critical things in that way as well? So the business production.

And the final phase is IT as a service where I move to standardized environments where I am now provisioning and allocating resources no longer to physical infrastructure, but to service-level environments that operate against policies and with telemetry to respond on an SLA and quality-of-service level.

That third phase is what EMC sees as its potential sweet spot.

Other key points from Gelsinger’s talk:

On joining EMC after being a long-time executive at Intel, Gelsinger said working at the “smallest of the big companies” was appealing to him. Gelsinger reckons that EMC simply has to be more aggressive and take risks to be disruptive. Intel’s business was fine and he saw a good exit point. However, Intel remains in Gelsinger’s blood. “I went from a farm boy to becoming a major leader in the IT industry, far more than I could have ever have dreamed of and I give all the credit to Intel,” he said.

On being commoditized as virtualization governs hardware in data centers, Gelsinger said:

As you unleash these trends toward standardized, virtualized, x86, open environments, it is a co-opetition environment. VMware supports NetApp. We have to go make sure we do a better job with our products underneath that. Every one of these layers creates the opportunity for more standardization and commoditization, so we must invest in creating better integration and differentiation against that. Our next set of products, we are off doing that. We are going to go do it and we realize in it that if we don’t stay ahead of the game for each of those layers, we will get a more commoditized.

On solid-state (flash) drives, Gelsinger said SSD flash drives are 2 to 3 percent of all units shipped. Five years from now, Gelsinger said flash drives should be about 10 percent of the total units shipped.

On the competition, Gelsinger said Hitatchi is trying to blow up storage margins with “absolutely, crazy Eddie pricing,” but EMC is holding its own.

On being pure-play storage in the land of consolidating IT giants like HP and Oracle, Gelsinger had some interesting comments:

We are seeing that some of the virtualization trends are moving people much more toward best-of-breed and away from integrated environments—not that they are even integrated, but they are packaged. It is not best-of-breed. We lose to HP in a storage deal, not because they have a better product, but because they get bundled away. We never even get to bid on that piece of the business. And increasingly, what we are seeing is people, CIOs are saying, no, I am not interested in that.

And particularly, as they move to virtualized environments, my SAN/NAS decisions are more important to me rather than just bundling it into a server purchase. So we are seeing cyclically that is moving away and I think over the last two quarters, the marketshare data bears that out. Who are the growers of storage? The pure play guys — EMC and NetApp. Everybody else is trailing the market at that level.

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