« July 2006 |
Main
| September 2006 »
Hitachi, parent of HDS (who I love - though they have their own marketing challenges from time to time), just announced an "enterprise" caliber 500GB SATA disk drive. Not content to simply attack the lower-end markets, they tacked on a 1 million hour MTBF (which means not only will the drive never break, it will be spinning post-Apocalypse) and a 5 year warranty.
Sounds great right? It sure does. Now, did the company use its marketing muscle to come up with a crafty high-end "enterprise" caliber name for the line? Something like DS500 (death star) or Infinity500 or DC500 (data center)??? Nope. It uses Deskstar. Yep. Deskstar. Why not Lunch box 500? or CameInTheCerealBox 500? I can see the ad campaign now, "Mr. VP of IT, if you have a desk, now you are a star". Ugh.
How many desks have critical enterprise data on them? Maybe the age of consolidation has gone so far as to shrink data centers down into furniture looking things. HP used to make an MPE machine that looked like a desk. I sat on it in the Boston, MA Putnam Investments data center once, having no idea it was not furniture. That might have been OK, except I was the EMC sales rep/installer that was going to plug a new memory board into that desk, which probably did not instill a very high degree of confidence in the customer. I'm pretty sure I left the board there for one of the guys techies and took him to a bar to wait it out.
I digress. My point is that if you wanna make people feel comfortable about applying your product or technology into their worlds, you should first try to understand what those requirements mean, and second, you might want to consider a naming convention that connotes confidence. Who would buy an Ab Blaster if it were called a "You'll never use it anyway, and end up putting it in the basement with clothes hanging from it that don't fit you anyway, you fat slob"?
Here's my CW article and here is the follow up because I couldn't stop writing - so this report on our site (it's free) is the complete ITIL/ITSM thing.
Basically, I wanted to have you understand what the stuff is, why it's important (for reasons other than what ITIL/ITSM folks say), and where it falls short. Let me know what you think.
Finally, I survived my first race track driving experience. Barely. In my "novice" class of 6, Aerosmith drummer Joey Kramer was one us. I'm a way better driver than him. When I asked him why he didn't bring his white Lambo Gallardo spider, he said "track soot". Track soot? Does he not realize there are probably lots and lots of groupies that would wash his car, or anything else for that matter, hoping to get it turned into an MTV video? Silly drummer.
It was one of the more terrifying, yet thrilling, experiences of my life. I did not destroy my car, which is nice.
Sun should probably start trying non-compete agreements. Rich, who ran the America's for Sun, is now at EMC and owns Clariion, Centerra, and Celerra - or everything but Symmetrix. That's got to hurt. I wish him well. I get the feeling he will find EMC a tad different culturally than the one he just left.
Up to a bit over $30,000 in this years Sylvia's Haven fundraising efforts. Netapp once again is leading the pack with a combined corporate and personal total of $10,000. McData was nice enough to pledge $5k before getting acquired by Brocade, who will simply HAVE to match the McData offer, less I ridicule them!! The $500 dollar donations have been nice to see from a lot of the little companies, so keep them coming.
There is plenty of time left, and no pledge is too small (or too big) - for an individual. If you are a company of more than 30 people, I'm expecting some serious generosity.....
My latest StorageMagazine rant on the worst reasons yet to have screwed up IT capabilities - because your boss's boss's boss is an idiot. If you can't see it due to passwords, yell at them. Since I own the content from now on I'll post the original article (unedited) so you don't have to go thru password hell.
Reyes is out on $2M bail, which is the equivilant of $1.87 to you and me. Federal judge denied his motion for dismissal. This has nothing to do with the article, but thought i'd mention it.
Here's ESG's take on EMC's org changes announced this morning:
CFO Tueber is now Vice Chair. Long time Tucci exec Dave Goulden is now CFO. Goulden is very different from Tueber, very persuasive and clearly smart (not that Tueber isn't smart, he clearly is), but Goulden is cut from a different cloth and it will be interesting to see how the street reacts to him. We believe it will be positive, and give EMC an opportunity to change thier Investor Relations strategy to get the stock moving, since the previous methods clearly did not work.
Dave Dewalt will take Goulden's job as EVP of Sales Operations, maintaining the role of President of their Content Management and Archive businesses - but no longer Legato. Legato (Mark Sorenson) and InVista (Doc Derrico) will now report to Dave Donatelli. Howard continues to own services, and resource management (smarts, control center run by Chris Gahagan).
The things to watch are Goulden's impact with Wall St., and the Dewalt impact since he now owns a lot of sales guys who have been there a long time and who wield a ton of power, such as Bill Scannell. The two have butted heads in the past, and everyone Scannell has butted heads with over the years is now gone. Somehow, he ends up on top every time.
Is this Joe's way of shaking things up and letting the cream rise to the top? Probably. The guy is too smart so this isn't window dressing, there is a purpose. Will it open up windows of opportunity for the competition? Probably not. The personnel dynamics are the things to watch, and those could have downstream impact in short order.
It had to happen eventually. The three had to become two, and the odds of Cisco getting away with buying either were not good due to regulatory issues around monopolization that surely would have been pushed.
So, at first blush, the deal is logical. Here's why it's smart:
- B and M both are heavy OEM based - there are only so many OEM's. The OEM's are smart, and know they can beat the hell out of each of them by pitting them off against each other, squeezing the margins of whoever wins this quarters business. Now that they are one - they only have to worry about getting squeezed by the threat of Cisco inside the OEM - which isn't that real a threat. The OEM would rather deal with anyone other than Cisco - as they are simply too big and powerful to give up any control they have inside their customer base. The OEM will not say this of course, but it's like going to the prom being the big man on campus, and having your sister show up with Tom Brady as her date. You don't matter anymore. Margins will stabilize, and that helps run a predictable business.
- Brocade and McData have both seen the light that the plumbing is nice, but not the future. Smarts in the network are where the money is going to be, and Brocade specifically has made big strides in that area. Now that McData is in the family, there is a whole new install base to add Brocade smarts on top of. They are in the lead by quite a margin right now in the smarts department. If they can push stuff out there, they can not only continue to outpace Cisco in this area, they can further decrease their reliance on the OEMs, who by default will compete with some of the smarts. Now the OEM has to decide between two things - do we dance with the real potential devil in Cisco or do we tolerate the fact that Brocade is going to sell some function that we would have liked to have all by ourselves? I'm betting the latter.
- There is plenty of product overlap, so I'm guessing tons of cost can get ripped out of the deal, combined with more predictable margins, Wall St. should be happy. This is a billion dollar business that can be very profitable again in short order.
- Mike Klayko - CEO, (I assume he stays) is a rebel. He inherited a nightmare, and doesn't care about doing things way out of the box. Since the market doesn't care to reward the stock one way or another, he has nothing to lose by trying new things. So far, most are working.
- The sales force - is good. There are really, really good people in both camps. If half go away and they are the dogs, what is left is a great force who can sell high-end and more important, can sell direct if necessary. Klayko won't let the company be controlled by the OEM's anymore, especially now that he is the one with leverage (the threat of Cisco).
So, they could totally screw it up, but so far I like what I've seen.
As far as Q-Logic is concerned, it's good news/bad news. They still are the only game in town at the very low cost, stackable end of the market. They were trying to encroach on Brocade's midrange dominance and were getting some traction, so this deal may make that harder to accomplish. Q makes so much money on so many things, it won't be a negative to them, but it will change the dynamic. McData and Q were already working together, and Q buying Troika last year does give them an interesting platform to execute intelligence in the fabric. Presuming they continue to create a SOHO market for Fibre Channel SANs, they will still be all alone and this deal will have no impact. It will be harder for them to move up market now, however, unless the OEMs decide to use Q to leverage the new Brocade.
From a financial perspective, Brocade paid a 48% premium for McData based on yesterday's closing price or 32% premium on the 50 day moving average of McData's stock price. The latter number provides more of an indicator and represents a reasonable purchase price. The interesting note is that Brocade pre-announced its revenue on the upside of about $5M and McData pre-announced a revenue miss of $20M. This represents exceptional execution by Brocade while going through and ultimately exiting investigation by the SEC and beefing up its Tapestry product portfolio.
|
 |
|
