EMC is moving out of the storage-only space and into server virtualisation and provisioning through its planned acquisition of VMware. This is the first such step by a previously storage-only vendor. VMware sells server partitioning technology which enables multiple operating systems, such as Windows and Linux, to run independently and at the same time in one Intel server. It has proved very popular, being used by thousands of companies world-wide, and VMware complements mainframe virtual machine technology in the Intel space.
VMware sells through HP and IBM which are strong competitors of EMC in the storage space, also Dell and Unisys, the supplier of datacentre-class, multi-processor Intel servers running Windows. Both IBM and HP have server virtualisation as a fundamental part of their adaptive enterprise/grid computing/on-demand ideas. They also strongly compete with EMC in the storage area with, for example, IBM Shark drives competing for customers with EMC's Symmetrix. If HP and IBM, VMware's large OEMs, don't want to buy VMware from EMC then the Dell channel represents a potentially huge alternative for EMC.
VMware was facing acquisition interest from server manufacturers but ruled out being acquired by one of them as it would damage relations with the others. Microsoft apparently wanted to buy VMware but that could have damaged VMware's Unix/Linux partnerships and technology development. VMware president CEO Diane Greene, said, "We were feeling intense pressure to accelerate our growth. All the sudden, the interest was from every major player in the industry. We wanted someone we thought would minimize the impact on our partners." Possibly the herculean increase in personal wealth prospects of VMware's officers and investors played a role as well, but no statement was forthcoming on that front.
EMC issued reassuring statements concerning it being "100 per cent committed" to being open and supportive of VMware's alliances with other vendors. EMC President and CEO Joe Tucci said, "EMC will protect customer and partner investments in VMware across the entire product line." He has to say this. What matters is whether IBM, HP and others that currently supply VMware are going to be happy to carry on doing so.
Money is key
What is the rationale behind the deal? Money is clearly one, with Tucci saying, "We expect to approximately double revenue year-on-year," with the unspoken proviso that existing VMware sales to IBM, HP, etc. continue. EMC's strategic rationale according to Tucci is that, "Until now, server and storage virtualisation have existed as disparate entities. Today EMC is accelerating the convergence of these two worlds."
But why should EMC be bothered? Until now PC and server memory virtualisation, aka disk-based swap files, and disk storage virtualisation have existed as disparate entities. Tomorrow they'll do so as well. Why isn't EMC converging these two worlds?
EMC says the deal "will make it easier for customers to manage and more efficiently utilise their entire information infrastructure." Not necessarily. If customers currently have server and storage virtualisation from HP or IBM they are going to face dealing with another vendor and with re-thinking their server and storage provisioning strategies. It makes things arguably more difficult.
EMC says the deal "naturally complements the way EMC customers already use EMC information infrastructure software to virtualise and provision storage." How? Customers don't provision servers like they provision Symmetrix arrays. They don't virtualise servers like they virtualise Symmetrix arrays. The EMC statement is apparently nonsensical.
Having spent the last three to five years separating storage from servers EMC is now stating that storage and servers are going to re-converge, that the deal "will enable organisations to achieve a 'virtual information infrastructure' - the foundation for next-generation information lifecycle management solutions". What has server provisioning and virtualisation to do with the 'information lifecycle'? It is another apparently nonsensical statement.
Underneath these marketing statements is there a grain of truth? Can it be that storage really is going to re-converge with the mainstream computing world? We might look at the rise of IP storage and Cisco's entry into storage networking with LAN/WAN-like concepts of security and quality of service, and ponder if this means storage networking is going to converge with mainstream networking.
Both HP and IBM are pushing the idea of a computing utility, a grid, that provides compute and storage facilities in a utility fashion. Through a socket in the world, customers obtain as much as they want, of what they want, when they want. What makes EMC think it can compete with these two in this space? Why should EMC think it should, or even could, provide computing and storage utility computing facilities?
Could it be that, with the rise of commodity computing platforms, Wintel and Lintel, that customers don't need to buy great massive software and hardware packages from IBM and HP any more? They are not locked in to soup-to-nuts HW/SW vendors but can achieve the same results from, and this is EMC's great idea, an EMC/Dell partnership.
Dell, like Conan Doyle's dog that didn't bark, is the silent presence in this announcement. What will probably give HP and IBM real pause for thought is the prospect of an EMC/Dell combination focused on utility computing. Should we regard EMC/Dell as a looming, coupled entity that will compete with HP and IBM in the supposed coming mass market for virtualised server and storage farms?
There will be a string of announcements to come as the pieces of this jigsaw puzzle are filled in. Tucci says a first joint product will appear "in the first couple of months" after the deal completes, and be a combination of EMC's SRDF fall-back storage system and VMware's VMotion which moves a virtual server from one physical server to another. So if power fails on a combined server/storage rack farm the thing can be replaced by a second one held in reserve. There are, "at least 20 products we will link and bring to market," Tucci says.
EMC is metamorphosing in front of our eyes. Last years disk array and NAS vendor has morphed into a more rounded storage supplier with fixed content (Centera), backup and e-mail archiving (Legato),content-aware storage (Documentum)and is now changing its product bundaries yet again into a computing and storage utility supplier. Customers can look forward to involving talks with EMC representatives and administrators can pencil new EMC software courses into their calendars for the new year.