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EMC’s federation delivers IT control and LOB outcomes by balancing core storage and software innovation

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As social, big data, cloud and mobile computing industry disruptors fuel growth of storage and increase the prominence of data in enabling better business outcomes, EMC drives a consistent message of …

As social, big data, cloud and mobile computing industry disruptors fuel growth of storage and increase the prominence of data in enabling better business outcomes, EMC drives a consistent message of infrastructure and business transformation. While EMC’s core storage capabilities add value for customers with subpar or nonexistent data warehousing, data increasingly has more value when it is in use and in motion. EMC is positioning for longterm relevancy by solving the technical problems occurring across the information life cycle, thus building lasting revenue streams that will include new business associated with the need to manage and derive meaning from the
data explosion.

This document is a special commentary featuring analyst opinion on how EMC's ability to balance core horizontal strengths with its foray into software-defined data
center, hybrid cloud and big data marketplaces.

Published in: Technology, Business

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  • 1. TBRT ECH N O LO G Y B U SIN ESS RESEARCH , IN C. TBR EVENT PERSPECTIVE EMC’s federation delivers IT control and LOB outcomes by balancing core storage and software innovation EMC World 2014 Las Vegas, May 5-7, 2014 Authors: Stuart Williams, (stuart.williams@tbri.com), Vice President, Research Matthew Healey, Principal Analyst Geoff Woollacott, Senior Analyst and Engagement Manager Krista Macomber, Analyst TBR Perspective EMC’s ability to balance core horizontal strengths with its foray into software-defined data center, hybrid cloud and big data marketplaces hinges on sales and ecosystem execution As social, big data, cloud and mobile computing industry disruptors fuel growth of storage and increase the prominence of data in enabling better business outcomes, EMC drives a consistent message of infrastructure and business transformation. While EMC’s core storage capabilities add value for customers with subpar or nonexistent data warehousing, data increasingly has more value when it is in use and in motion. EMC is positioning for long- term relevancy by solving the technical problems occurring across the information life cycle, thus building lasting revenue streams that will include new business associated with the need to manage and derive meaning from the data explosion. The “redefine” theme presented at EMC World 2014 represents a challenge to customers, partners and the EMC federation to address the tipping point in IT differentiation from hardware to software, as EMC works to bridge the gap between existing and next-generation IT infrastructures. As software-defined management, “as a Service” delivery and data analytics become differentiators, EMC has adopted a stronger federation-led focus to better target emerging opportunities. EMC positions the ease of use and simplicity of the software-defined enterprise as a critical offensive weapon in today’s business environment, and applications increasingly lie at the heart of this discussion. One size does not fit all in today’s workload- and outcomes-focused market, and EMC’s best-of-breed approach is compelling, but adds complexity.
  • 2. www.tbri.com TBR As EMC’s storage story becomes more nuanced with new consumption models and contributions from VMware and Pivotal, work remains in training direct and indirect sales channels to articulate business benefits to customers. Differentiation will be further challenged by competitors such as Dell and NetApp that share EMC’s concept of bridging second- and third-generation platforms as a software-defined data center (SDDC) value proposition. EMC’s tie-ins to VMware cloud management and broader software-defined management capabilities, as well as its ability to drive standardization around cloud, big data and mobile applications by leveraging Pivotal to tap the open source software developer ecosystem, will build on core infrastructure strengths and enable EMC to capitalize on emerging opportunities. As EMC goes to market with cross-federation solutions, such as the EMC Hybrid Cloud Solution, leveraging targeted go-to-market overlays that address the IT department, developers and business users will help the organization overcome technological and solution complexity and close sales. Impact and Opportunities Increasingly, EMC will align portfolio innovation and messaging to highlight software-led storage competencies to tap long-term revenue growth opportunities ViPR lies at the heart of EMC Information Infrastructure’s rising ability to bridge second- and third-generation architectures. EMC has an “everything but the kitchen sink” software-defined storage strategy, including intentions to integrate its ViPR and data protection capabilities, which are an extension of the vendor’s on-premises hardware strategy and of how it achieved industry-leading revenue share in the storage array marketplace. However, portfolio and partnership tie-ins with VMware add complexity to EMC’s software-defined storage strategy and threaten to confuse customers. TBR believes EMC Information Infrastructure’s ability to articulate how VMware’s hyperconverged vSAN complements its software-defined storage capabilities and provide the backbone to the broader federation’s SDDC, hybrid cloud and big data strategies will dictate its differentiation in today’s evolving storage marketplace. EMC announced the addition of geo-replication and distribution capabilities, ScaleIO integration, and commodity hardware support through OpenStack integration with the launch of ViPR 2.0 at EMC World, bolstering the platform’s cloud-scale positioning. These capabilities enhance the data management controller’s ability to reduce operating expenses and reduce the IT administrative burden for customers by bringing cloud flexibility and agility to on-premises storage environments. Additionally, consistent automation of file, block, object and HDFS infrastructures in ViPR 2.0 will improve reliability and further reduce costs. EMC increasingly leads with ViPR and ScaleIO as infrastructure differentiators, which is a big step forward in adapting to increasingly software-led functionality across the IT industry for a vendor that traditionally differentiates on robust hardware. EMC’s Elastic Cloud Services (ECS) appliance, the formerly code-named Project Nile, was launched at EMC World and is designed to deliver public cloud flexibility, simplicity and agility in private cloud environments. ECS shows how EMC’s infrastructure value proposition will increasingly lie in bundling commodity hardware with value-add software into appliances focused at solving targeted IT pain points. ECS addresses rising customer requirements for public cloudlike simplicity and agility in on-premises IT environments while reducing integration and deployment complexity. EMC’s focus on enabling “as a Service” IT delivery with its infrastructure solutions will improve the vendor’s ability to target service providers — keeping this vertical its fastest-growing one during 2014. TBR believes that cost savings as compared to Amazon Web Services (AWS) and Google public cloud services will be a leading selling point, as gigabyte savings are a huge draw at the exascale level. We anticipate that ECS will increasingly accompany pure-play ViPR deployments as driving forces behind EMC’s software-defined storage strategy, as the EMC sales force is more accustomed to selling appliances than it is to selling stand-alone software offerings.
  • 3. www.tbri.com TBR EMC focuses on continued innovation and new avenues to competitive displacement to position flash as a supporting pillar of next-generation workload optimization Despite the increasing focus on the business federation, EMC World 2014 highlighted a series of flash storage- focused announcements, including the acquisition of startup DSSD. TBR believes the acquisition underscores that EMC is not slowing down its investment in flash technologies as strategic tools in addressing requirements for improved performance of next-generation workloads. The vendor’s blend of acquisitions and R&D enable rapid innovation as well as capabilities across this workload spectrum. As leading vendors also discuss the complexities of mixed flash/drive across the information life cycle, EMC will differentiate on simplicity of operations. DSSD’s rack architecture will add a tier to EMC’s server-side flash capabilities that will better accommodate data- intensive next-generation workloads such as Hadoop and SAP HANA. EMC underscored that DSSD is a technology acquisition, rather than a product acquisition, that will be folded into its portfolio to improve its ability to capture critical long-term growth opportunities, with specific product announcements to follow later this year. As flash continues permeating across the data center, DSSD will be an important flash portfolio tie-in to cloud and big data workloads, affording further differentiation in these marketplaces. Armed with DSSD, a $1 million guarantee for in- line and online data services on its all-flash XtremIO arrays through Sept. 30, and a new competitive buy-back displacement program, EMC will be on the offensive during 2014, working to penetrate competitors’ flash storage install bases as an inroad to bridging traditional and emerging IT infrastructures. EMC Information Intelligence Group focuses on secure and effective collaboration and building “as a Service” capabilities to bridge customers’ existing IT infrastructures with the cloud Updates announced by EMC’s Information Intelligence Group (IIG) during EMC World 2014 indicate that EMC is adapting this portfolio to enable secure, more efficient and more effective collaboration across the enterprise as another asset in its hybrid cloud portfolio. This strategy receives notable fuel from Syncplicity, which EMC acquired in May 2012 for its cloud-based file synchronization and sharing capabilities. As enterprise mobility management (EMM) becomes a rising concern among CIOs due to accelerating enterprise adoption of bring-your-own-device policies, EMC announced the Syncplicity Connector for SharePoint application for improved mobility and data protection. While VMware will lead the EMC federation’s end-user computing (EUC) strategy by providing foundational EMM technologies through its January AirWatch acquisition, Syncplicity will provide front-end synchronization and sharing of documents for end users regardless of the data’s physical stored location — which is a differentiator against public cloud-based offerings such as Box. TBR believes this strategy will position the EMC federation as a stronger competitor against new (AWS, Box) and longer-standing (Citrix) players in the EUC space during 2014. As EMC embraces its federated approach on its path to bridging second- and third- generation IT platforms, Pivotal will provide crucial support around enabling IIG to deliver SaaS. The Pivotal CF-based EMC Supplier Exchange solution was launched at EMC World 2014 as IIG’s initial foray into public cloud-based SaaS. Supplier Exchange extends private cloud-based Documentum deployments to the public cloud to improve the scalability, multitenancy, automation and external collaboration capabilities of the enterprise content management solution. Highlighting that IIG also remains focused on innovating to support traditional deployment model opportunities, the company launched at EMC World 2014 its InfoArchive product suite aimed at improving archive optimization and cost efficiencies while mitigating risk by reducing sprawl across the archive environment. Although not a SaaS solution, InfoArchive is open and accommodates structured and unstructured data as customers deal with growing heterogeneous data pools. VMware hones in on virtualizing key applications to accelerate adoption of its cloud technologies and improve its ability to articulate better business outcomes for customers VMware leads the EMC federation’s SDDC and hybrid cloud strategies, and TBR believes the server virtualization leader offers a compelling vision and portfolio centered on enabling customers to leverage existing investments in technology during the transition to a cloud-based architecture. However, as today’s hypervisor environments become increasingly heterogeneous, VMware’s goal of virtualizing 100% of applications to extend its lead in the
  • 4. www.tbri.com TBR space and drive its vision of “hybrid cloud forever” becomes important to the stickiness of its technologies and, as a result, the success of its strategy. As VMware sets the stage for better business outcomes for customers through the virtualization and management capabilities alongside the applications it supports, partners will help VMware talk to new customers. For example, VMware CEO Pat Gelsinger announced to audience applause at EMC World 2014 that SAP HANA is now available as part of vSphere 5.5. This integration is significant, as it will enable customers to access the advanced capabilities that HANA offers in lower-cost and more flexible software-defined and hybrid cloud IT environments. As business value and competition increasingly come from next-generation applications, Pivotal enables the EMC federation to deliver powerful, foundational cloud and big data tools “When the data fabric changes, everything else changes,” said Pivotal CEO Paul Maritz. Maritz’s organization will keep EMC Information Infrastructure and VMware in touch with these disruptions. With the bold assertion that Cloud Foundry will become “the Linux of the cloud,” he introduced integration of Pivotal’s commercial Cloud Foundry distribution with VMware vCloud Hybrid Service (vCHS). TBR believes this space bears watching, as Pivotal competitors such as Red Hat, with its OpenStack-led strategy, also work to establish early leadership in the nascent but rapidly growing PaaS marketplace. Pivotal’s blend of enterprise-ready solution sets with a lower-cost, price- per-core model focused on charging customers for analyzing rather than storing data, and its rich ecosystem of developers through Pivotal Labs, are differentiators that will result in continued product adoption and revenue growth for the company. This strategy will position Pivotal as the driver in the EMC federation’s focus on providing choice that enables customers to unlock the value and power of data. Commoditized compute and storage price points underpinning the cloud require EMC to redefine its go-to-market strategy Maritz noted at EMC World 2014 that constraints on software development for business value creation have been lifting with each generational shift in the computing industry. Today, cloud lifts virtually all hardware constraints, enabling software to drive the industry. Software decisions now demand direct connection to the business, and in connecting to the business, software shifts purchase decisions. On one hand, the shift requires selling software-centric solutions and outcomes to lines of business. On the other hand, it requires concentrated selling efforts for fewer buy points for base layer infrastructure, given end customers will buy IaaS from the channel. EMC’s business partner revisions represent a major step toward redefining the EMC selling motion. EMC has to move from its core strength with the on-premises end-user data center decision makers and focus its attention on the disintermediation layer, where channel partners hold court. With this channel evolution, EMC takes steps to migrate the selling functions up to the unified federation layer through a single portal and clearly defined rules of engagement, carving out profit pools for the different channel entities existing within what EMC hopes will be an ever-expanding ecosystem served to varying degrees by the federation. Channel partners face serious challenges in the transition given the working capital constraints associated with small business. EMC knows the channel’s importance will only increase during the transition as Compute as a Service shifts monetization opportunities for partners at the same time as end-customer consumption patterns evolve. The blueprint appears logical and empathetic to partner business pain points. Integral to the program’s success will be the ongoing sales transformation process internal to EMC that keeps the ecosystem whole and thriving as the overarching industry shift accelerates at unprecedented rates. Event Overview EMC World 2014 featured executive discussions and hands-on technology demonstrations to show press, analysts, partners and customers how the vendor is leveraging its federated business structure to address customers’ cloud, big data and mobile requirements. Speakers included Joe Tucci, chairman of the Board of Directors, president and
  • 5. www.tbri.com TBR CEO, EMC Corp.; David Goulden, CFO, EMC Corp., and CEO, EMC Information Infrastructure; Paul Maritz, CEO, Pivotal; Pat Gelsinger, CEO, VMware; and Jeremy Burton, president, Products and Marketing, EMC Corp. Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators. Serving a global clientele, TBR provides timely and actionable market research and business intelligence in a format that is uniquely tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis. TBR has been empowering corporate decision makers since 1996. For more information please visit www.tbri.com. ©2014 Technology Business Research Inc. This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce.