Who, When, How, Why and What’s Coming in 2020
Geekonomics? Yes, we pay homage again to Freakonomics, the National Public Radio Podcast series that reveals the hidden side of everything, applying economic theory and exposing often hidden data to reveal the underlying truth. In Geekonomics, we take the same approach to all things IT to see what is really happening. Let’s do the math.
Our focus in this installment is: “What in the ‘Sam Hell’ happened to storage in 2019?” We piece together a number of the year’s headlines and key developments, how they fit together into an interesting puzzle, and unveil the missing pieces.
January: Datera & Hewlett Packard Enterprise Accelerate Enterprise Transition to Software-Defined Storage
HPE, the #2 player in classical storage arrays, tapped Datera in early 2019 to round out its tier 1 block storage portfolio with the Datera enterprise software-defined storage software platform running HPE ProLiant servers, complementing its line of Mellanox 100 GbE switches. A year later in early 2020, eWeek credited Datera for filling a critical hole for HPE and credited HPE for having some foresight. Something must be afoot…
February: IDC Signaled Increased Services, Pullback From Public Clouds
IDC announced that the massive rush to the public cloud had reversed to a massive repatriation, stating that 80% of enterprises have initiated efforts to repatriate 50% of their applications and workloads due to lack of performance, security, and ultimately the high price of public cloud services from the leaders like AWS and Azure.
IDC further clarified that a majority, or 56%, of data would live over the long haul in on-premises data centers, with the remainder tucked away in public clouds, giving new life to the corporate data center which had been left for dead by most industry commentators.
April: Google Cloud Introduced the Anthos Platform for Multicloud Apps.
Alphabet, the parent company of Google, launched Anthos, its new platform for “write once, run anywhere” applications on-premises and in multiple public clouds, brought on Thomas Kurian from Oracle to get GCP ready for battle in the enterprise, and bought a handful of companies to expand services and capabilities. My colleagues at Google Cloud tell me every employee there knows the cloud game is on, that Google is behind, and is sprinting to catch up.
June & November: Datera Assembles Software-Defined Data Center Leadership Forum and Virtual Symposium
Lead, Follow or Get Out Of The Way. Datera assembled a coalition of leaders in data center infrastructure to drive the industry to the next major wave of adoption, bringing together Scality, WEKA.io, Intel, Hewlett Packard Enterprise, Mellanox and Cumulus to talk requirements, lessons learned, and the criticality of partnership amongst vendors to power the future software-defined enterprise clouds with Mark Peters, longtime industry analyst from Enterprise Strategy Group. Datera livestreamed two virtual tradeshows in a pre-COVID-19 world — the first from HPE Discover, its worldwide customer event, from Las Vegas in June and the second from the Silicon Valley Convention Center in November, to worldwide audiences. (Pardon the interruption, but let me quickly tip my hat to the Datera team that made this happen: well done Eric, Tom, Brett, Dominika, Laura and crew.)
December: Amazon Web Services Announced The Availability of AWS Outposts for On-Premises Hardware Systems.
Amazon made its long-awaited AWS Outposts, an on-premises proprietary compute and storage hardware platform compatible only with AWS cloud services, available and ready to address, as a last resort, the 56% of data not moving to the public cloud. Long live the enterprise data center.
Exiting 2019: Fastest Growing Storage Companies in 2019…Were Software Companies
17 of the 20 fastest growing storage concerns across the landscape in 2019 were software companies. That’s right, software companies. SDS platforms like WekaIO for HPC file use cases and Datera for Tier 1 block led the way while others bit off important albeit important challenges like data protection, file virtualization and multi-cloud access. Marc Andressen, early Internet innovator and VC behind some of the largest and most successful technology startups of the last two decade
s, said in 2011 that “software is eating the world” and this statement has now clearly touched down in the enterprise storage business. Of the major array players only Pure Storage, with its lead in all-flash arrays, was able to claim a spot on the list. It makes sense given that powerful flash and NVMe drives have hit a production volume that has reduced unit costs to a virtual stalemate with spinning disk drives, making better performance and reliability available in a server package priced at a fraction of the total cost and flash markup charged for classical arrays.
Entering 2020: Software-Defined Storage Market Will Become 3X the Array Market
Industry analyst Dennis Hahn, longtime industry player, launched his inaugural market projection for software-defined storage, projecting an $86B market by 2023 on the back of 28% annual growth. 
His effort wisely combined the move to hyperconverged infrastructure (HCI), which incorporates a storage layer in the hash, and standalone software-defined storage systems, like Datera, into a single projection, since both are key alternatives to classical storage arrays and deliver a public-cloud like experience on-premises.
Entering 2020: Worldwide Enterprise Storage Systems Market Revenue Down 5.5% to $28.6
Within a week of projected solid growth for software-defined, Eric Burgener and his team over at IDC lowered their original gloomy forecast for classical hardware storage systems from a 1.3% uptick to a decline of 5.5% for 2020, 
with that trend continuing for the foreseeable future, all against a backdrop of 50%+ growth in data. While many key hardware players struggled with their revenue numbers at the end of 2019, Pure Storage and Huawei stood out for their positive momentum, yet their results couldn’t and won’t reverse the slide at the category level.
So Where Does That Leave Us?
2019 exposed every key macro trend in enterprise storage—software is growing, hardware is slowing, all-flash environments are showing and cloud services are on-going. On the surface, this doesn’t look that complicated, but not many predicted it and stood by it. Geekonomics gives a hearty salute to David Floyer of Wikibon, who five years ago predicted the bifurcation between software and hardware based approaches. He termed the software approach “Server SANs,” a superior term for using software to turn servers into storage area networks — now standalone storage as well as even HCI — and the tapering of hardware-centric storage.
No one is predicting the imminent expiry of any storage category, since my experience over two decades and in particular the last several years in the industry tells me that large organizations from the Fortune 1000 to public and educational institutions will put all of them to use. And let’s not forget that data is growing 61% per year and it’s going to need to go somewhere. But the growth numbers clearly tell us who has the best outlook as we move forward.
So What’s Next?
Andressen’s well-argued thesis is that digital disruption has come or is coming to every industry, from mainstream industries like retail, entertainment and transportation that were offline to now, ironically, even digital storage, an industry that has been online from the onset. Software is simple eating this world too, with the only questions being how fast and by whom. 2020 will be THE seminal year in answering them.
Sources
- Datera Joins HPE Complete to Accelerate Enterprise Transition to Software-Defined Storage
- DC: Increased Services, Pullback From Public Clouds Huge IT Disrupters
- WW Enterprise Storage Systems Market Revenue Down 5.5% to $28.7 billion in 2020
- Why Software Is Eating The World
- AWS Outposts Now Available – Order Yours Today!
- Introducing Anthos: An entirely new platform for managing applications in today’s multi-cloud world
- Server SAN Projections 2016-2026