State of the Union

At the 5 month mark in the year of 2008, I find myself thinking about how upside down things are. The general mood remains pessimistic, but most IT companies are hitting their numbers. There are budget cuts across the board, but for the most part the first five months of 2008 along with Q4 of 2007 have been rock solid. IT departments are cautious, but continue to spend.

You sort of expect EMC and NetApp to be kicking butt, if for no other reason that we are conditioned to it. I didn't see Symantec's big number coming, but come it did. You would have thought the great depression of 2008 would have crippled the smaller guys, but Isilon, 3PAR, Data Domain, CommVault, and Compellent have kept on keeping on.

No one gives any attention to Double-Take, but they might be the most consistently performing one of the bunch. Boring yes, but putting up killer results. The company has completely (and almost instantly) turned around under Investor turned CEO (again) Dean Goodermote and hasn't looked back. Replication is good after all – especially if it pertains to good numbers.

I would have probably kicked you in the shins, or worse, had you told me a few years ago that I'd spend actual time thinking about power, packaging, and cooling in 2008, but alas, I do. Green matters, for the wrong reasons mostly, but it does matter. People spend money on "perceived" relevant green IT. Mark Peters knows more about Green realities than anyone else in the space. Good thing he works for ESG.

Guys like Xyratex have a pretty killer play when people start rambling about power, packaging, and cooling. They get no credit for where they sit in the food chain from Wall St., but they should. They ride with the core market – which is in hyper growth mode – and are in prime position to take advantage of the stratospheric growth that Web 2.0 presents. Why should Google, et al, keep building science project/erector set infrastructures? If you want to be your own OEM, eventually you need to act like one – which means you need to package things up to be supportable, tested, etc. In the Web 2.0 world, inexpensive capacity in professional packaging for short dough is going to rule the day, so who better to ride that wave?

Mark Hurd stole the big-deal show buying EDS, but Andy Monshaw's storage business at IBM has done the most interesting and most out-of-the-box deals in the sector. I would have never believed anyone in that job would ever buck the outrageous "not invented here" attitude that has been the hallmark of that group. It remains to be seen if the infusion of outside talent will have the desired effect or the anti-bodies and big company politics will push out the new blood. No matter what, you have to give Monshaw due credit for doing what few ever thought could be done by lighting a fire under the group and making IBM storage interesting. By the end of 2008 we should be able to get a feel for how it's going – death or glory, if you will. Maybe both – with glory usually comes some death.

5 months ago DataDirect Networks was about as exciting to talk about as processed cheese, but former HDS marketing madman Steve Zivanic joined the ranks and immediately began to tell a much more interesting tale. DDN just so happens to sell into the sweet spot of the media, entertainment and Web 2.0 worlds. DDN was used to create the new Batman movie trailers and effects for The Dark Night (way cool, those Batman movies). Zivanic leverages play's like this and finds ways to get attention, where in the past DDN might have added a Pacific Title & Art (the post-production house) logo to their list of customers and hope you might somehow know who that was (you wouldn't) and why they mattered (ditto). If you aren't a multi-billion dollar player you need to be different to be noticed. Look for more interesting things out of DDN and Zivanic, he does things that make me pay attention.

Finally, the only thing more boring than storage, packaging, and IBM historically has been the analyst business. Apparently there is such a thing as the "Institute of Industry Analyst Relations", or IIAR. I cannot tell you exactly why, or who these nice folks are, but bless their hearts for ranking ESG in the top 10 firms globally (out of over 100) and in the top 5 in the U.S. in the "Analyst Firm of the Year" category. We came in at #7 in the "Most Important Firm of the Year" category globally, but heck if I can tell you what that really means. Congrats to Brian Babineau who made the top 10 in the global "Analyst of the Year" category, out of 191. If 191 were nominated how many does that mean there are in the world? Yikes. Thanks to all the folks who took the time and effort to put this together and to those who voted. It's nice to get recognized even though we are boring.

 

Comments

[Tom Trainer]

Nice comments on DDN. Brian did some nice work on proving them "fast." I am lending my support as well as they do have a killer product in a segment that has an extreme need for speed.
Tom