10 Storage Predictions For 2016

Top Of Mind In 2016: Restructuring And Consolidation Of The Storage Industry

Storage customers have had time to digest the benefits, capabilities and limitations of new storage technologies including software-defined storage and private and public clouds, and are increasingly turning to those technologies to store data. This trend already has manifested itself in falling revenue for traditional storage arrays and the fast rise in sales of all-flash storage.

Such trends will make for a rocky 2016 as storage vendors jockey for position in their new world order. It's only January, and the year has already seen a couple of huge venture investments in storage companies while it digests NetApp's surprise acquisition of SolidFire in December. This is only a preview of what's yet to come.

2016 indeed will be a very interesting year for storage. Here's a look at some of what's on the horizon.

10. Storage Pricing To Shift From Backup To Recovery

The cost of storing data has traditionally been on a per-GB or per-TB basis. However, as the cost of the capacity for storing data, whether on-premise or in the cloud, drops to near zero, while the cost of not having access to data continues to soar, this will change.

A couple of vendors, including cloud providers like Google and Asigra, are already basing all or much of the cost of storage on how much is recovered or restored, and not on how much was stored. This is a disruptive model that will require storage providers to toss out existing price lists, but it better reflects the cost of providing storage capacity. Therefore, 2016 will see further adoption of this pricing scheme.

9. Microsoft To Grab Cloud Storage Share From Amazon

Microsoft has shown it has the patience to develop solutions customers need, even when it is late to the market. In 2016, the latest iteration of that patience will become evident as Microsoft grows its business storage cloud at the expense of rivals, particularly Amazon.

Microsoft knows what business customers want and has built its Azure cloud for them. So while Amazon and Google grab the headlines this year, watch for Microsoft to grab an increasingly large share of the data stored on the cloud.

8. Hyper-Converged Infrastructures Break The Compute-Storage Tie

The biggest selling point of hyper-converged infrastructure solutions is the close tie between compute, storage, networking and virtualization resources in a single appliance, making them easy to deploy and manage, even if they also become pretty expensive in large implementations.

However, that close tie is also the primary impediment to further adoption of the technology. Need more compute? Buy a node with more compute and storage. Need more capacity? Buy a node with more compute and storage.

This tie will finally break in 2016 as hyper-converged infrastructure vendors finally live up to promises to provide simple and easy-to-deploy platforms for on-premise and private clouds. Expect them to offer customers the ability to scale each component separately.

7. Hybrid Cloud Storage Will Reign

The experimentation phase of the public cloud storage is done. Clients know what public cloud storage can do. More importantly, they know what public cloud storage can't do in terms of maintaining security of data and keeping long-term costs down.

In 2016, the storage industry will firmly put public cloud storage where it belongs, at the end of the storage life cycle for those workloads where performance is not an issue, including disaster recovery, long-term archiving, temporary capacity bursts and sharing of data.

By year-end, storage implementations without a cloud component will be rare. A majority of new storage implementations will feature on-premise private storage clouds to handle the high-performance and/or high-security workloads, and be tied to a public cloud or two to handle the workloads managed best by the cloud.

6. Software-Defined Storage Moves To Almost-Mainstream Status

The past couple of years have seen the idea of software-defined storage, which separates the functionality of storage arrays from the underlying hardware and makes it possible to configure storage devices on commodity hardware, move from industry buzzword to realty. This move was pushed by smaller vendors with nothing to lose on the storage hardware front, but has now been taken up by large storage vendors who have everything to lose if the industry adopts the technology en masse.

2016 will see software-defined storage solutions increasingly accepted by clients, especially in enterprises where other new storage paradigms such as the cloud are already accepted. The benefits of software-defined storage solutions will increasingly be evident as leading-edge solution providers find ways to sell around big iron, especially as storage refresh cycles start.

5. Servers Become The New Storage Platform

The move to take storage away from traditional storage arrays and move it to new infrastructures including software-defined storage and the cloud means servers will reign as the new storage platform. This trend has quietly been under way as seen by a firming of industrywide server shipments and a rise in server revenue, and will accelerate in 2016.

For this year, watch for continually richer server configurations featuring increasing amounts of memory and storage capacity. Such configurations allow for increased capabilities when used with software-defined storage architectures, as well as provide the performance to take advantage of workloads that can be moved to the cloud.

This will also result in a continuing erosion in traditional storage array sales, which in turn will drive even richer server configurations in what will likely become a never-ending cycle of change.

4. Cisco Will Become A Storage Vendor

Cisco has to make a storage play in 2016. That is, it has to make a play that will turn out better than Invicta, which came from its acquisition of startup Whiptail.

Cisco is the last of the big enterprise server vendors without a strong storage play. The company has done well with partnerships with such storage vendors as EMC and NetApp. But despite reassurances from Dell and EMC that Dell's acquisition of EMC won't impact the Cisco relationship, few in the industry seriously believe it.

Cisco's next move appears to be an OEM relationship with Springpath on hyper-converged infrastructure. But Cisco will probably make an acquisition in 2016. It missed an opportunity to buy SolidFire, but could still acquire longtime storage partner NetApp and get SolidFire anyway. After Whiptail, however, Cisco will be careful about acquiring startups.

3. Lenovo Will Become A Storage Vendor

Did someone call Cisco the "last of the big enterprise storage vendors without a strong storage play?" Lenovo would likely disagree, given that it is now the volume server builder after its IBM x86-based server acquisition, with big aspirations to be a major enterprise data center force.

What is holding Lenovo back is the lack of a world-class storage business. Lenovo only has to look at Dell to see how to turn what was essentially a commodity PC and server builder into an enterprise powerhouse. The key was storage, which Dell got with acquisitions of EqualLogic and Compellent.

Lenovo in 2016 has to get into the storage business, and do so quick if it wants to take advantage of its world-class ex-IBM server technology. It could do so with OEM relationships, although its current OEM partner of choice, EMC, is going to Dell. Or it could go the acquisition route. Candidates include IBM's storage business, or NetApp if it thinks big. Just as likely might be a software-defined storage startup that could give it the keys to building its own storage business from scratch.

2. Dell Will Close EMC Acquisition, Hard Choices To Follow

Dell by the end of 2016 will be a completely different company from what it was in 2015. Dell will close its planned acquisition of EMC this year as expected, as it already has too much invested in the deal to pull out now. But why would it pull out? Dell CEO Michael Dell is one of the savviest executives in IT today, and he is going into this deal with eyes wide open.

A novice will see in Dell and EMC two companies whose storage array sales are sagging. But look closely. These two companies have some of the industry's best storage software, all ready to run on one of the industry's best server platforms. And what is a storage array? Software and a serer.

For 2016, don't expect a big consolidation of product lines after the acquisition closes. That will come in 2017 or 2018. The initial focus will be on combining two different corporate cultures that have fought each other for years, with the technology changes to come after the R&D teams get together.

1. NetApp Will Do Something

NetApp's 2016 is harder to predict. On the one hand, it will continue to be a potential acquisition target, with possible suitors including Oracle, Lenovo and, of course, the perennial favorite Cisco. But with NetApp's surprise acquisition late last year of SolidFire, and given NetApp's spotty acquisition record but new strong leadership in CEO George Kurian, there will likely be some time before something big happens.

Watch for NetApp to finally, officially, publicly be an acquisition target in 2016 once the smoke from NetApp's surprise SolidFire move clears up. And watch a bidding war open once the first potential acquirer announces its bid. NetApp, as the last of the big independent storage vendors, is just too valuable for anyone to give up quickly.