Cisco storage move threatens server, array vendors

Cisco's $451-million Whiptail acquisition gives it flash technology, but will the company's storage encroachment turn off long-time array partners?

The lure of flash in the data center has turned Cisco into a storage systems company.

Cisco's $451-million acquisition of all-flash array startup Whiptail Technologies Tuesday brought it into competition with its storage partners, such as EMC, NetApp and Hitachi Data Systems (HDS).

Paul Perez, general manager of Cisco's data center group, said that gave Cisco pause before making the deal, but solid-state storage added too much value to its Unified Compute System (UCS) platform to pass up.

Perez said Cisco was more concerned with getting the jump on other server vendors than competing with its storage partners.

"We're focused on disrupting the computing market against our server competitors more than trying to get into storage," he said. "Storage is a big market. It has a lot of use cases, and we're focused on data acceleration."

Perez said Cisco recognized a need to add a data acceleration layer to its converged infrastructure strategy, which UCS is the key piece of. He said customer feedback told the vendor that solid-state storage was preferable to using flash as a tier in servers or a cache through PCIe cards.

"Customers said, 'We need something more sophisticated,'" Perez said. "'We want a data acceleration layer that behaves as a system.'"

The goal is to provide a common global storage pool with high availability rather than aggregate servers.

Cisco looked at building, partnering or buying its flash array. It decided to buy because that gave it more control over the technology and Whiptail's technology is a good fit for UCS, Perez said. Possible fallout from storage partners "was a big consideration as we deliberated strategy," he added. "Part of the success of UCS is founded on the strength of those partnerships. We view this as being a safe area of overlap."

Cisco is no stranger to storage. It is the second largest provider of Fibre Channel storage-area network (SAN) switches behind Brocade, and it has acquired other technologies used for storage. Despite occasional rumors that it would buy EMC or NetApp, however, Cisco has left the enterprise storage array business to its partners until now.

"The handwriting has been on the wall for several years. It was only a matter of time until Cisco was going to get into storage," said Arun Taneja, consulting analyst for the Hopkinton, Mass.-based Taneja Group. "They've been thinking about storage for more than 10 years since they came out with Fibre Channel switches. I'm a little surprised they decided to get into storage via an array rather than a PCIe flash card. That would be the natural way for them to get into it. But now there's no more speculation. Cisco is in the storage business."

Why Whiptail?

After deciding to buy a solid-state drive array vendor, Cisco had plenty of options. Violin Memory, Pure Storage, Nimbus Data, Skyera, Kaminario and other startups sell all-flash arrays. According to Gartner Research, Whiptail had $17.8 million in revenue in 2012, giving it 4.8% market share. That placed eighth behind Violin, EMC, IBM, NetApp, HDS, Nimbus and Pure.

But Whiptail has been a close partner with Cisco, working to get its Accela and Invicta arrays qualified with the UCS and Cisco VXI (Virtualization Experience Infrastructure), and Perez said the Whiptail architecture is a good fit with the UCS and Nexus platforms.

Whiptail's arrays begin with a single-node Accela and scale to 400 TB of flash by using Ethernet cards to cluster. Perez envisions selling low-end, midrange and enterprise flash arrays tied together with low-latency Cisco Nexus connectivity. "We think a combination of Nexus and accelerated network adapters can be a good cluster fabric," he said. "And Whiptail has a unified control plane and management plane. We can scale across multiple sites with UCS and integrate Whiptail APIs [application programming interfaces] into a multi-site large scale environment with a single pane of glass."

Perez said Whiptail CEO Dan Crain will join Cisco as vice president of solid-state systems and the Whiptail team will stay intact, working out of its Parsippany, N.J. headquarters. It's unlikely that Whiptail's product brands will survive intact, however.

"Our intent is to keep their architecture and map it to Cisco hardware," Perez said. "Details of how we brand it are pending the legal close [expected by the end of the year]. Think about entry, midrange and high-end product spaces."

"The big question is, 'Will Cisco continue to sell Whiptail as a standalone product or pull it in and make it part of UCS?'" Storage IO analyst Greg Schulz asked. "Some of Cisco's previous acquisitions, such as InfiniBand and file migration, got pulled in and became part of the Cisco portfolio, but were no longer available as standalone products. They're on the 'Where are they now?' list. How will they do this one?"

What will storage vendors do?

Perez said Cisco's move to flash was meant to be disruptive to server vendors. Still, it has industry people wondering about repercussions among storage vendors. Cisco and EMC sell Vblocks consisting of Cisco servers and networking and EMC storage through a joint venture called VCE. NetApp sells its arrays as part of FlexPod reference architectures in partnership with Cisco. HDS uses UCS and Cisco switches in its Unified Compute Platform.

Those storage vendors are pushing into flash, too. EMC's XtremIO all-flash array is in limited availability and will likely become generally available within months, and last week EMC added a new all-flash version of its VNX unified storage platform. NetApp sells an EF540 all-flash array based on its E Series high-performance computing platform, and is developing a FlashRay all-flash general purpose system. HDS has an all-flash option for its Hitachi Unified Storage (HUS) VM midrange array.

The storage vendors are unlikely to end their Cisco partnership over the Whiptail acquisition. They have too much invested in their converged stack and reference architectures. They also benefit from having a server partner, and Cisco is still not as deep into storage as Dell, Hewlett-Packard and IBM.

"EMC has about a $1 billion annual revenue run rate with Vblock," said Tim Stammers, senior analyst at New York-based 451 Research. "They're not going to close it down overnight."

They might over time, though. While the tight partnership between EMC and Dell didn't end when Dell acquired iSCSI SAN vendor EqualLogic in 2008, it was fractured, and it did end when Dell added a second SAN vendor, Compellent, a few years later. Taneja said the same thing could happen with EMC and Cisco.

"This has serious implications," he said. "EMC will consider Cisco a direct competitor. Now that the cat is out of the bag, Cisco might do some acquisitions for hybrid storage. Vendors such as Nimble Storage, Tegile, Tintri, all of those become acquisition candidates for a new storage player called Cisco. This is a coming-out party in a sense."

Schulz said Cisco's acquisition may force server vendors to act. IBM acquired flash array vendor Texas Memory Systems last year and said it will spend $1 billion to develop flash products internally and through acquisitions. "Now everybody should be asking, what does HP do? What does Dell do?" Schulz said.

For now, HP and Dell are sticking with their flagship storage products. HP sells an all-flash version of its 3PAR StorServer SAN array and Dell is coming out with an all-flash version of its Compellent arrays.

"I don't think we'll see copy-cat buys now," Stammers said. "The other big vendors all have their [flash] products laid out."

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