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I could not help myself, but
- The FTC is thinking about regulating blogs. I, for one, could not be happier. In fact, lets get this through Congress right now. In all seriousness, why don't we have full disclosure on blogs like stock analysts have it. My full disclosure? I would rather be changing the Tech Baby's diaper than writing this blog.
- My colleague, Mark Peters, figured out something which I could not - a real life acronym for Tweet(ing). You see blog is short for web log. Mark has suggested that Tweet stands for: Total Waste of Everyone's Excess Time. It is perfect. Lets go with it. (Tweeting it right now!! Just kidding, I don't Tweet)
- Speaking of useless acronyms, what ever happened to File Area Network (FAN)? Brocade recently shut down this operation, and now everyone talks about Scale-Out NAS (SON)? Excuse me Mr. Enterprise, can I interest you in a SON? You think that will freak out a few IT managers?
- When talking with electronic discovery vendors, they all seem to use the term 'early case assessment,' which is a derivative of the EDRM's 'Initial Case Assessment' (I think). An early case assessment theoretically allows you to triage a matter: settle versus argue. You see the problem, there are only two options, and a triage needs three. So, I am instituting new early case assessment triage terminology - The Bernie Madoff (You are screwed, no need to fight this one. Settle.), The Martha Stewart (Unsure. Might as well fight and put up your celebrity versus a twenty-something stock broker and see how it goes). The Mike Tyson. (If it moves, fight it. What do you have to lose, your dignity?)
I was going to enroll on Twitter, but I realized that it really is an utter waste of time. No one cares what I do every 15 minutes anyway. I can guarantee you no one cares what I am thinking about every 15 minutes. However, I will give you a glimpse of what consumes my cluttered mind right now:
- Kudos to EMC's marketing organization for pulling off EMC World in this economic climate along with the Swine Flu overhang. There were 4000+ attendees and most of the sessions I attended broke the fire code for amount of people in a room. While many other vendors canceled their events, EMC made it happen.
- You want to talk about irony: I was walking into a storage customer a few weeks back to discuss a VTL RFP. I got a call from ESG HQ that NetApp was going to buy Data Domain - who happens to excel at disk-based backup implementations including VTL solutions. We did not alter the RFP process. Fast forward to this week when I was scheduled to meet with the same storage customer to review the VTL RFP responses. 30 minutes before the meeting, I get a text message from ESG HQ saying that EMC is topping NetApp's bid for Data Domain. Next week, we are having another meeting to make a final decision on the VTL solution. I am leaving my phone at home.
- If you have not caught it yet, find some time to Tivo CNBC's Meeting of the Minds program where several business leaders, including Jack Welch and Larry Fink, talk about the future of capitalism in America. Even the Tech Baby enjoyed the hour banter.
- We are witnessing more companies extending hardware (servers, networking, storage, etc) maintenance contracts as opposed to buying new gear after the asset has been fully depreciated. One conversation I had with a customer went like this. "We could afford to a buy a new solution, but that limits our flexibility as we are locked in for the next three years (the depreciation period). Even though we are running older technology, renewing the maintenance agreement gives us more options in the long term." This is happening more often in this economy and we expect it to continue.
NetApp has de-duped the storage market. There will be one less vendor selling disk in 60-90 days (that's how long it takes the regulators to read all the legal documents). Everyone is going to offer their opinions on the price, the timing, the future of the combined product portfolio, etc. Here are a few things to think about:
- NetApp was a one platform company. They sold the same product (with different configurations) for years. They tried to morph that one platform to address new markets (disk-based backup) but weren't as successful as they wanted to be. It was pretty easy to tackle disk-based backup when it meant selling cheap systems with big ATA drives. The rules of the game changed when data deduplication and VTL became table stakes in the disk-based backup market. NetApp tried to take its one platform and add these capabilities, but they weren't fast enough. It is the right time to add a second platform which has already successfully competed in these markets. NetApp will have to get over the 'one operating system, one file system' marketing lingo, but I am sure they can do it.
- The first bullet is not a new strategy. EMC tried to make smaller Symmetrixes to go after the mid-range storage market. They tried different drives, small configurations, and some other tactics and then realized they could not put a square peg (Symmetrix) into a round hole (mid-range storage market). Therefore, they bought a round peg (Data General / CLARiiON). That has worked out reasonably well for the fellas in Hopkinton.
- The biggest risk in this deal is the integration. NetApp does not necessarily have the best track record in integrating decent size acquisitions (see: Spinnaker and Decru) so they have something to prove. These two companies do not necessarily like each other and have battled in the market for the past few years - humbleness and humility have been lacking in the deduplication storage market. Somehow, these two companies are going to have to figure out how to put aside prior vendettas and outright spite to make it work.
- My boss and ESG founder Steve Duplessie has always said that EMC and NetApp do not compete. He has his reasons, but I always disagreed, mostly because I have advised many customers who were evaluating both. That aside, let's assume Steve was accurate on his assessment more than 50% of the time. That is going to change now. NetApp and Data Domain viewed EMC as enemy number one. With so many customers getting a quick ROI on disk-based backup solutions with dedupe, EMC and NetApp / Data Domain will have their guns pointed at each other.
Anyone who has had a baby can relate to what IT managers are going through right now. When you shop for anything that remotely has do with the baby (crib, car seat, etc), there is always an ROI. "Yes, you definitely need the car seat that costs twice as much as the normal model because it has a roll bar and its own side impact airbags. One accident and this thing pays for itself". The Tech Wife has actually become a pretty good sales person when it comes to buying things for the Tech Baby. "I had to get the most expensive ppacifier because it is multi-flavored and the Tech Baby is a big fan of diversity. It will pay for itself when he doesn't cry during the Red Sox / Yankees game."
IT Managers are faced with the same dilemma as me. They have limited budgets and every vendor's product has an ROI. (I have yet to meet a vendor that doesn't offer a solution with some ridiculous ROI.)Every productwill make you more efficient. Every vendor will make your staff more productive. Every vendor will ensure that you can spend more time on Facebook than you do managing your applications / databases / servers / storage / networks combined.
Here are my favorite ROI statements from actual vendors:
- Buy our compliance suite and we will keep your executives out of jail. (Really? I wonder if the vendor making this claim also sells bail bonds just in case their product fails).
- Never buy storage again with our resource management software. (Seriously? If I run out of capacity, can I call my storage vendor, order some disk and send you the bill?)
- Lehman Brothers couldn't run their business without us so if you run transaction processing applications, we are the standard middleware platform. (Whoops! I guess you need capital and this middleware to actually run a bank)
- If you don't count our software maintenance costs, the payback is 90 days. (No kidding! When someone buys a house, they really should consider the down-payment as the total investment. Those monthly mortgage payments and pproperty taxes are irrelevant.)
There is only one baby product which I have purchased over the past 6 or so months that has given me a real ROI - diapers with a stripe on them. If the stripe is green, its time to change the Tech Baby. If the stripe is not visible, I let the kid be. How did I calculate this ROI? I save plenty of money on diapers as I am not changing them unnecessarily (cost avoidance), I do not need to use my nose or other body part to check to see if a change is needed (sniff test), and I can immediately identify or rule one issue when troubleshooting a crying episode (easy payback for a guy like me to understand).
(When it came to buying diapers, I knew which one to get and I never buy anything else and by "I", I mean "we" in the paragraph above.)
My advice to IT managers follows my logic with the diaper ROI.
- The ROI has to be tangible and immediately discerned. If you have to think about how you could get an ROI from a particular product for more than 10 minutes, it probably does not exist or is not a good opportunity right now.
- The ROI must include cost avoidance. ROIs that are built on improved productivity or time savings alone are good when you have unlimited budgets, not when you are dealing with cutbacks on a daily basis.
- Always avoid the snifftest if possible. If you think a vendor is pitching something that just does not seem right (ie: the ROI is measure in minutes or they don't include maintenance in the calculation), do not waste your time. As I have learned, if you have to smell to see if there is trouble, there usually is.
The Tech Wife is getting ready to go back to work. She is pretty excited to have adult conversations back in her life even though I constantly remind her that they are overrated. She is also excited about not having to deal with drool, avoid spit up regularly, and pick up sh*t all day - I reminded her that this is what corporate America is all about. Despite all of that, she constantly says "My maternity leave went puff; where did the time go?" In keeping with her sentiment, here are some markets that are in process of or have gone 'puff'':
- Enterprise Content Management companies can no longer survive on their own. Documentum, FileNet, Interwoven, IXOS, Hummingbird, and now Vignette - all were acquired and part of something bigger. Yes, OpenText is still a standalone ECM vendor and doing most of the buying, but they are more of ECM conglomerate and no one will buy them because they haven't integrated all their other deals yet. I am not sure if they can survive as a standalone, but it will be fun to watch. Everyone is saying that this market consolidation is being driven by the economy, but they are only partly right. The other elephant in the room (or market-if you prefer) is Microsoft SharePoint. Recent ESG research indicates that nearly 25% of early SharePoint adopter and 25% of planned SharePoint adopters said they would use SharePoint to take over functionality currently managed by an ECM solution.
- Entrepreneurs are being crippled. According to PriceWaterhouseCoopers, Thomson Reuters and the National Venture Capital Association US venture capital investments sank 61% to $3B in Q1 2009, dropping to the lowest level in 12 years. You have a good idea, and no one will give you money to fund it. The VCs will say that there are no good ideas. Entrepreneurs will say that VCs want to mitigate risk and own all the company. The Texas style standoff isn't good for anyone.
- Fibre Channel Host Bus Adapters. qLogic bought an Ethernet silicon and NIC company; Broadcomm wants to buy Emulex; Emulex wants to go at it alone. It is safe to say that storage is moving to an Ethernet world. So long $2,000 HBAs.
- Tape. Ooops. That market went puff a few years ago when de-duplication and ATA drives made disk much more affordable as a backup media.
The Tech Baby made his first trip to the east coast this week and what a blast it was. We finally got him on a sleep schedule and then we change his time zones. He needed that like JFK needed a parade. Needless to say, he has no idea what time it is, when to eat, and worse, he is not amused by any Boston sports events yet (this usually helps a former Bostonian come to grips with the crappy weather, horrible accents, and jet lag). Some observations while I wasn't watching the Tech Baby spit up all over someone else for a change:
- I recently wrote a whitepaper on the benefits of bringing some aspects of the electronic discovery process in-house. In that paper, I interviewed a litigation support specialist who receives at least one discovery request per day and had no choice but to start leveraging e-mail archiving, search and review software, amongst other solutions, to start managing things in house. A very good rebuttal was posted by Gary Wiener who argues that even as I supported in-house electronic discovery, I have my doubts that all companies can do it. While Mr. Wiener cites several thoughts from my paper, he fails to mention that I specifically call out some areas in the paper where I believe discovery service providers are extremely useful. I also highlight in the paper the fact that the litigation support specialist also uses service providers for certain matters, and the technology actually helps them manage the service providers more effectively. The decision on how much technology to implement on-site versus using a service provider could be argued until we are all blue in the face so I will end with this: both are needed and will be for a long time.
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If anyone is questioning the value of Riverbed's WAN optimization solutions, please review their most recent financial results. It is clear that customers voted with their wallets to use Riverbed as opposed to buying additional network bandwidth. I am encouraged because organizations are finally spending money to save money.
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I have no idea how Emulex's board could turn down the most recent offerfrom Broadcom. I know it is a hostile bid, but come on, a 40% premium for an HBA business? If Scott McNealy can sell his company, so can you.
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In an interesting move, LiveOffice has come up with a Client's Bill of Rights. Grant it, a few of the Rights a bit marketing oriented, but most actually discuss core values of the company and its commitment to servicing customers. This is a very unique way to communicate a company's mission statement, core values, and strategy to multiple audiences - customers, employees, press, analysts, investors, etc. I am looking forward to them competing in the market against Iron Mountain / Mimecast.
The IT pundits are out in full force offering their opinions on the Oracle / Sun deal. Regardless if you think its a good deal, there are few things that are being overlooked in my opinion:
- It took IBM at least two weeks to decide whether or not it wanted to buy Sun. Rumor has it that Oracle / Sun talks started last Thursday and concluded Sunday (announced Monday). Given that the announcement call lasted 12 minutes without Q&A and the transcript was full of general positioning and minor details, there is likely some truth to this. You think there is a difference between an east coast and west coast run company? The importance of due diligence will manifest at some point.
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Kudos to Scott McNealy and Jonathan Schwartz for pulling this off. No one thought they would be able to get a deal done after IBM walked including me. Its not easy to sell the company you built, but they did the right thing stubborn as they may be. Jerry Yang will have to look elsewhere to commiserate missed opportunities with.
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Oracle getting into the operating system, servers and storage markets and Cisco entering the server market all in a month is by far the most interesting four weeks in technology is a very long time. It may actually spur infrastructure innovation throughout the Valley and generate some capital flow back into technology. (Let's hope).
I have a gut feeling that Jonathan Schwartz and Jerry Yang will become best buddies in the next few weeks. They will have very much in common if, in fact, Sun walks from a 80+% premium offer from IBM including:
- Disdain for large cap technology companies
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Pink-slips generated from shareholder activists
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Pissed off employees that could have, at a minimum, gotten something for their stock options
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Carl Icahn on their speed dial
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Jim Cramer's CEO Wall of Shame
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Joint book deals: "How I let my ego ruin a good company"
Anti-trust issues appear to be the deal breaker here and what price premium that IBM is willing to pay to see this through all of the government paperwork. It sounds like an excuse to me because:
- Yes, a combination of the companies would lead to a 'monopoly' on high end servers, but who cares? Many IT shops have done away with high end servers choosing to go with more modular mid-range smaller solutions. And, we know there are plenty of those server vendors creeping around the market and Cisco just got into the mix. Additionally, most companies cannot use the compute power in these big boxes anyway and end up buying VMware or Microsoft server virtualization solutions anyway. Further, doesn't IBM already have a monopoly on another form of high-end servers - the mainframe - and that apparently does not fluster the government.
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Yes, a combination of the companies would lead to a 'monopoly' on tape, but who cares (again)? ESG research suggests that customers are quickly moving backups to cheap disk - an alternative to tape. There are plenty of disk-based backup competitors - actually there are too many - so this really shouldn't bother the government.
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The only argument I could foresee the government having is over the database software. A combination would leave Microsoft, Oracle, and IBM as the primary database software vendors with Sybase coming in as a solid number four. With those four companies, there is bound to be some healthy competition - in fact, when they do battle in this market, there is usually blood. Therefore, I cannot see anything wrong with this piece of the puzzle either.
Bottom line. Jonathan and Jerry now have more in common than they wanted, and all the excuses of why this will not happen are riddled with question marks.
I am still a firm believer that GDP grows 2% instantaneously if the world stops tweeting and goofing off on Facebook all day long. At some point, don't those acts because a circular reference? Facebook status: Current tweeting; Twitter posting: Updating Facebook status; Facebook Status: Just tweeted;Twitter, Just finished updated Facebook status.
I, for one, would like to see those tools put to good use and my starting point will be IT Facebook sstatuses that mean something bringing me to this week's bullets:
- Storage admin: Just configured a volume as RAID6, allocating to server, waiting for acknowledgment from Sys Admin. Paid way to much for storage, but this volume management tool actually works as the Sys Admin thinks they are getting 200GB when I really gave them 50GB. Suckers. Laughing while looking at e-mail.
- Sys Admin: Finally got my LUN from the storage dudes. How much is this 200GB going to cost me in my next month's bill? Dropping Oracle database on it, configuring redo logs, and wait, my HBA software is out of rev. Yelling at Storage Admin while cursing Linux.
- Database Admin. Waiting for a server and some disk so I can layout some tables. I cannot to start splitting instances so I can drive CPU and storage utilization below 8%. Wait to the Storage Admin starts running backups of this table-space. Goofing off with Oracle RMAN and DataGuard.
- Network Admin. Thank god the storage guys run their own network. There is no way I am backing up any more databases over my LAN. That stuff makes Washington D.C. traffic look like the Indianapolis 500. Checking to see if my firewall is actually working.
- Purchasing Manager: I have no idea what the hell the guys in IT are doing. The guy who runs Oracle must be loaded because I just keep writing them checks. Going to get a baseball bat to beat the IT department and their vendors.
- Lead Systems Architect This server virtualization stuff looks like it will solve all of our problems. There is no way that we will lose control of how this technology is used within our organization. Googling server virtualization management tools.
- Director of Messaging & Collaboration. E-mail quotas are the best thing since sliced bread. Without them I would be constantly calling the Storage and Sys Admin teams, and more than likely, getting beat up by purchasing for blowing my budget. Laughing at employees who cannot send or receive e-mails because they hit their quotas.
- Senior Developer. The cloud thing really works as I do not have to call IT or purchasing. Its all on the corporate card!! Dialing the business analyst I am working with to tell him the application I am developing only works on Hadoop and we have no one here that knows how to spell that. Going back to IT later to get some resources to redevelop it.
I continue to be a 'cloud' computing skeptic. I am not convinced that the technology and service delivery mechanisms are ready. I am also not convinced that many companies can make money delivering 'cloud' enabled services such as SaaS. In fact, I would guesstimate that only a small amount of cloud computing vendors (Amazon, Google, Iron Mountain, IBM, and LiveOffice to name a few) can actually make money selling 'Cloud Computing' services such as on-line backup, SaaS-based email management, or straight out CPU rental. In case you forgot in this awful economic climate, we are still a capitalism-based economy and making money is the not a luxury in this model.
This morning I woke up at AM to feed the Tech Baby and grabbed my Blackberry to check my email. Much to my happiness, Lauren Whitehouse- ESG's stellar analyst covering all things data protection - sent me an e-mail about an on line, 'cloud'-based backup service gone wrong.
Carbonite, an on-line backup company, lost data belonging to over 7500 customers and subsequently filed lawsuits against its storage vendor and system integrator. Carbonite is suing Promise Technology (the storage vendor), with fraud, unfair and deceptive business practices, and breach of contract for supplying it with $3M worth of defective storage and Interactive Digital Systems (the integrator) with breach of warranty.
Some more screw ups that give me enough bullets to say that customers really need to do their diligence before selecting a cloud provider because sometimes the cheapest 'cloud alternative' may leave you gloomy.
- Last August, EMC Mozy was embarrassed by a much-publicized customer recovery situation where it took days to just assemble the customer’s data for recovery and then another 24 hours before a staffer personally transported a portable storage device to the customer.
- In July 2008, Amazon's S3 storage service went offline for an extended period of time and several other services such as the company's Service Health Dashboard offering and SmugMug photos (which leverages S3). S3 also had an outage in February 2008.
- Salesforce.com, the company that made SaaS sexy, had an outage in July 2008 impacting 900,000 users worldwide. The company also had a 6 hour disruption in service in February 2008.
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