I turned 50 this year. It’s not a particularly pleasant experience – but of course is vastly more preferable than the alternative of not turning 50. The advantage of turning 50 and having been in the technology industry for more than a quarter of a century is that the evolution of technology is so fast that you can gain a real appreciation for the old adage that “history repeats itself.” Of course, as the wag once said “History repeats itself because nobody listens.”
When Data Domain went public in its very successful 2007 IPO (even 2007 seems like decades ago, doesn’t it?) one often overlook aspect of the company’s SEC filings was that it noted that secondary storage (typically associated with backup) was only one aspect of the company’s direction. It was clear that the company had designs even then on eventually moving to primary storage deduplication. When EMC outbid NetApp to purchase Data Domain, it wasn’t to increase the company’s market share in secondary storage deduplication – it was about leveraging a technology across EMC’s and NetApp’s storage assets across the board.
Dell’s acquisition of Ocarina in late July was part of Dell’s strategy toward building out its own storage portfolio. At the time of the acquisition, Dell announced that it intended to be the leader in primary storage deduplication by 2012. Ocarina’s technology isn’t based on the more typical hash-based deduplication technology; it instead is focused on data such as images, videos, and office documents that typically only deduplicate effectively in secondary storage environments when redundant backups of data allow higher data reduction ratios. Dell has already stated that Ocarina’s technology will be leveraged across its iSCSI SAN assets (its acquired EqualLogic product set); it’s highly probable that it will be embedded within the NAS clustering software acquired from Exanet in February and I’d be surprised if Dell doesn’t pursue embedding it into its DAS (Direct Attached Storage) offerings supported directly but in its server offerings.
Dancing with the One that Brought You: Backup and Deduplication
Where does all of this leave the technology sector that originally led in the introduction of deduplication? It seems increasingly obvious that most buyers are growing skeptical of paying large amounts of money for secondary deduplication devices and then paying additional large sums for backup, archiving, and disaster recovery software and services and then having to integrate the two by adding a backup server and then manage and monitor the collection. There are buyers who have budgets, the vast data stores, and the desire for years of near-line retention who will pay for state-of-the-art secondary deduplication devices; however, this isn’t where most buyers will be focused. As deduplication becomes increasingly more available both within backup software packages and within backup appliances, buyers are increasingly making a rational choice to focus on total cost of ownership and return on investment rather than on pushing the limits of technology.
This is where history repeating itself becomes so obvious. The history of technology companies consist of those technology “pioneers” (you know, the ones with all the arrows in their back) and the “fast followers” who bring the technology to the market in an affordable and easy-to-use fashion. [Geoffrey Moore wrote a nice book on this phenomenon called "Cross the Chasm." - recommended reading] Technology companies take advantage of technology pioneers by realizing high profits; however, the pace of technology is so fast that it’s difficult to do this for very long. [As a side note, it's interesting Data Domain is now owned by a company that is sometimes called "Excess Margin Corporation" by not only its competitors but its customers as well.] Share of wallet, which is a metric associated with the percentage of overall information technology spend that a vendor can claim, is a wonderful thing to strive for from the perspective of a vendor – but can have pretty dire consequences for fast-growing businesses being strangled by their IT costs
What is less obvious and perhaps more interesting is what the impact of primary storage deduplication will be on data protection. That will be the subject of my next blog post.
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