Major Changes For A Major Industry
The story of the storage industry in 2018 was, as always, one of growth. The year saw the rise of artificial intelligence both as a part of ways to better manage storage but also, when it came to headlines, the development of a new group of converged infrastructure platforms based on flash storage and Nvidia GPUs. The storage industry also hosted one of the year's biggest IPOs, and saw a shift in market share away from many of the top U.S. brands to both the upcoming Chinese vendors and to the hyperscale data centers.
It was an exciting year, one full of surprises. Click through the slideshow to relive the memories, both good and bad.
10. Storage Gets A.I.
Artificial intelligence and machine learning have been steadily creeping into storage products for use in detecting and mitigating potential issues before they impact data.
The big news for 2018, however, is multiple vendors, including Pure Storage, NetApp, and IBM, introducing new converged infrastructures combining all-flash storage with Nvidia's DGX-1 GPU servers to provide a platform for running artificial intelligence applications. IBM went a step further with a separate offering using its Power-based servers in place of the Nvidia GPUs.
This is a significant start to what could be an important technology going forward. Businesses are adopting artificial intelligence in a wide range of applications ranging from autonomous driving cars to finance to healthcare. Those applications need the performance and bandwidth to run applications that may be interfacing with hundreds or thousands of sensors, and pre-configured platforms combining all-flash storage and GPUs are a good base.
9. NetApp Ascends
NetApp just a few years ago appeared to be on the ropes. It was undergoing a painful transition to a new storage operating system and was late to the all-flash storage market -- causing folks to wonder when the company might be acquired.
No more. NetApp has in the last year not only grown its overall storage market share, this year it’s both the leading vendor and the fastest-growing vendor of all-flash storage in revenue terms. Even more important, NetApp has gone farther than any storage vendor in finding ways to integrate its storage technology with public, private, and hybrid clouds via its Cloud Fabric platform which allows data to be managed and migrated seamlessly across those different mediums.
NetApp didn't become top overall storage vendor, but in 2018 it became the storage vendor at the top of those categories that were the most important.
8. Dell EMC Recovers
Dell EMC is another company that raised concerns about the future of its storage business, although those concerns were not as long-lived as those of NetApp. While the merger of Dell and EMC gave the combined organization a strong software-defined storage play with VMware's vSAN offering, Dell EMC had a very unwieldy storage business with two clashing corporate cultures, clashing channel models, and many products on its line card. As a result, the company's storage sales actually retreated a couple of quarters.
While those issues have yet to be completely overcome, Dell EMC has seen a strong recovery of its storage business in the last few quarters, with the fastest growth in sales of any of the major top vendors helping to increase its already huge market share. Dell EMC is once again firing on all cylinders.
7. Pure Storage Grows Up
What a difference a year made for Pure Storage. The company hit the ball out of the park in November with a unified hybrid cloud and new cloud data service strategy that, while new, gets it ahead of nearly every other storage vendor except NetApp, which had a couple years head start.
Pure Storage actually beat everyone to the artificial intelligence platform market with its Nvidia partnership, and has pretty much filled in the holes in its software business.
6. Funding Soars
Venture funding for storage vendors continued at extremely strong levels, including such whopping rounds as:
* $250 million, Cohesity, hyper-converged secondary storage, in June.
* $106 million, Actifio, data-as-a-service technology, in August.
* $94 million, Cloudian, object storage software, in September.
* $93 million, Qumulo, cloud NAS technology, in June.
* $80 million, Druva, cloud data protection, in August.
* $75 million, Egnyte, enterprise file sync and share, in October.
* $68 million, Wasabi, cloud-based data protection, in August.
* $60 million, Datrium, unified primary and secondary storage, in September.
* $30 million, Ctera Networks, global file services, in October.
* $25 million, Zadara, cloud storage, in August.
* $23 million, CNEX Labs, high-performance SSD controllers, in October.
* $20 million, ClearSky Data, primary & secondary storage management, in December.
5. Acquisitions Thrive
2018 was also a great year for investments of another kind: acquisitions. Some of the biggest storage industry acquisitions included:
* Data Direct Networks (DDN) acquired Tintri out of bankruptcy, as well as Intel's Lustre-based file system.
* Violin Systems, known as Violin Memory before declaring bankruptcy and then recovering in 2017, acquired X-IO.
* Kaseya, a powerhouse in the professional services automation (PSA) business, acquired Unitrends.
* Consolidation in the cloud storage business as Carbonite acquired Mozy.
4. Chambers Invests
Data protection and data management technology developer Rubrik in August got an endorsement of its technology and its future path that many companies could only wish for: an investment from John Chambers.
Chambers, Cisco's chairman emeritus and former CEO, took an unspecified investment stake in Palo Alto, Calif.-based Rubrik, and joined it as a board adviser. He said in a blog post at the time that he had seen Rubrik co-founder and CEO Bipul Sinha build his company into one with a clear path to becoming a multibillion-dollar business and "one of the world’s next great enterprise technology companies."
For Sinha, the investment from Chambers was more than a source of funding to help carry the company towards an IPO. Sinha told CRN that Chambers, with his experience running large enterprise companies, would actually become a mentor to him, offering advice on how to grow Rubrik.
3. Dropbox IPOs
While 2018 was not a big year for storage vendor IPOs, one company in this market, Dropbox, successfully completed one of the biggest tech IPOs of the year.
Dropbox, the San Francisco-based provider of cloud-based storage, had been flirting with an IPO for a couple of years, but waited for the right time. And 2018 was indeed the right time, at least to start. The company priced its IPO on March 22 at $21 per share, and sold 36 million shares to raise a total of $756 million and an initial market capitalization of over $8.2 billion. The share price closed the following day at $28.48, and by June rose to a high of $43.50. Alas, the heady times were not fated to last, and by mid-December share prices were in the low-$20s per share.
2. Tintri Fails
Tintri, one of an early group of all-flash storage array providers, and the one best known for its VMware-aware storage capabilities, ended its 10-year run in the summer of 2018.
Tintri in late June of 2017 went public with an IPO that brought the company just over $60 million -- far below its original expectations of nearly $110 million. A month later, the company reported a loss of $25.3 million on revenue of $34.9 million for its second fiscal 2018 quarter, which ended July 31. That was the firm's first quarterly fiscal report after its IPO. By June of 2018, the company approved a reduction of about 200 employees, giving it a final head count of 40 to 50. OEM hardware builder Flextronics Telecom Systems, which made Tintri's all-flash storage array hardware, in mid-June told Tintri it planned to terminate its contract. Tintri in late June warned it "[did] not expect to have sufficient liquidity to continue its operations beyond June 30, 2018."
Not all was lost, however. DataDirect Networks, Mountain View, Calif., in July purchased Tintri's assets for an undisclosed sum, and in late 2018 launched and upgrade to Tintri's product line.
1. Market Shifts
The storage market is going through a couple of major shifts, as exemplified by IDC research in the third quarter of 2018
While total worldwide enterprise storage revenue rose in the quarter by 19.4 percent to $14.0 billion, the all-flash part of the business saw the best growth in that market 39.3 percent to reach $2.15 billion. The hybrid flash and disk storage business grew much slower at 16.0 percent to $2.6 billion. Take away all-flash and hybrid-flash, and the disk-based business grew 17.1 percent.
The bigger shift was in vendor rankings. Dell EMC and NetApp both enjoyed strong growth in the third quarter, while HPE, Hitachi, and IBM all saw contractions, according to IDC. A trio of China-based storage vendors--Huawei, Lenovo, and Inspur--saw double-digit growth, ending up in a statistical tie with Hitachi and IBM, IDC said.
However, the biggest share went to the ODM direct business, which generally meant cloud hyperscalers. There, sales grew 45.8 percent to reach $3.9 billion, or 27.7 percent of the market.