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Toshiba whips up small NAS and workstation disk drives in 16TB flavours

By
Chris Mellor
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Toshiba has introduced 16TB versions of its N300 small office NAS and X300 PC/workstation disk drives, adding two extra TB to the existing products.

The company’s first 16TB drive, the helium-filled, 9-platter MG08, made its in January 2019, and gave it a two dimensional magnetic recording (TDMR) head to cope with the narrow tracks on the platter. Each read head has two readers, slightly offset from each other, to cancel out inter-track interference noise. 

Toshiba TDMR diagram.

The N300 and X300 drives have a 512MiB cache, double that of their 14GB precursor  but spin at the same 7,200rpm. Toshiba has not published a data sheet for these drives but we understand they feature the same 6Gbit/s SATA interface as the 14TB N300 and X300.

The N300 supports use in NAS chassis with up to 8 bays and has a 180TB/year workload rating, with 24×7 operation. It has a three-year warranty while the X300 makes do with two years. We do not know the sustained data transfer rate and that number wasn’t supplied for the MG08 either. Possibly it’s not that impressive.

The 14TB N300 did 260MB/sec so the 16TB version should be in that area or better.

Yesterday Western Digital announced 18TB and 20TB drives using microwave energy-assisted magnetic recording (MAMR) technology. Toshiba is also developing MAMR technology. WD said its H550 18TB drive can be derated to 16TB but it has no pure 16TB drive offering.

The N300 and X300 should be available by the end of the year.

Scale adds Acronis backup to HCI set-up

By
Chris Mellor
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Scale Computing, the hyperconverged systems vendor, is OEMing Acronis Backup to add archiving and disaster recovery to its systems.

Scale’s HC3 includes a data protection suite which offers high-availability, backup, replication and recovery. It says many customers have augmented this to add protection features such as disaster recovery and support of NAS or SAN as target devices.

By OEMing Acronis Backup, Scale can now offer customers archiving, anti-ransomware and disaster recovery as well as Acronis’ backup facilities. These include supporting the public cloud and on-premises HC3 virtual disks, NAS and SAN as backup storage targets.

Scale Computing CEO Jeff Ready said: “Our technologies are highly complementary, and HC3 customers…will also benefit from the performance, ROI and TCO advantages offered by Acronis Backup.”

Jeff Ready, Scale Computing CEO

Acronis Backup has full bare-metal systems recovery, meaning a backup image can be restored to a server minus an OS. It also has universal restore to the same or dissimilar hardware, as well as  granular recovery levels from files and folders up through virtual machines to systems.

Blocks & Files thinks the Scale-Acronis tie-in may prompt other hyperconverged system vendors, such as Cisco, DataCore, and Pivot3 to offer similar deals integrating data protection, archiving and DR into their offerings.

Datrium already offers disaster recovery and NetApp teams up with Veeam with its Elements HCI product. HPE has RapidDR for its SimpliVity HCI system.

Dell EMC’s VxRail hyperconverged system includes backup and replication, with RecoverPoint, Avamar-based vSphere Data Protection and optional Data Domain for deduplicated backup and recovery. It also has Cloud Array which supports backups stored on the public cloud.

Acronis Backup is available for purchase from Scale Computing today.

Commvault buys Hedvig in storage and data management unification play

By
Chris Mellor
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Commvault is buying Hedvig, a software-defined storage startup, for $225m.

This is a bet on data unification and operational efficiency by Commvault, which cites a Gartner forecast that software-defined storage (SDS) running in the cloud will become the dominant method of building multi-cloud storage infrastructures by 2023.

Hedvig CEO and co-founder Avinash Lakshman said operational efficiency is achieved “via complete protocol consolidation (block, file, and object storage) on a single API-driven platform,” that spans geographies and multiple clouds, and covers primary and secondary storage. This is what Hedvig’s Universal Data Plane software, running on AWS, Azure and the Google cloud, provides.

Commvault CEO Sanjay Mirchandani said: “Hedvig’s technology is in its prime. It has been market tested and proven. We believe that the convergence of storage, multi cloud, and cloud native technologies, combined with our leadership in data management will accelerate the movement towards modern applications built on containers and microservices. Commvault will set the bar for the unification of storage and data management for the future.”

The data management vendor says businesses face data fragmentation with data reposing in multiple public clouds as well as on-premises. Data comes from different sources; on-premises and public clouds, virtualized and containerised servers and IoT devices. And it is stored in different formats; block, file and object.

Avinash Lakshman (left) and Sanjay Mirchandani (right)

Hedvig was founded in 2012 by Avinash Lakshman and his brother, VP of engineering Srinivas Lakshman. Total funding is $52m.

All Hedvig’s staff join Commvault and stay in their Santa Clara HQ, five minutes walk from Commvault’s office there.

The Commvault and Hedvig software products will continue to be sold stand-alone and a roadmap is being developed to bring them together.

This is Commvault’s first acquisition under the helm of Mirchandani, who was appointed in February, and it marks a change of direction for the company which hitherto has focused on organic growth.

The acquisition is expected to close in the fourth 2019 quarter.

VirtualWisdom gets closer to self-driving app vision

By
Chris Mellor
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AIOps is a Gartner-supported concept of performance and infrastructure monitoring.

AIOps

AIOps stands for artificial intelligence for IT operations and entails collecting performance data from applications and the IT infrastructure (system software, compute, storage, network) they use. This is analysed using machine learning, statistical analysis, heuristics and expert systems to automatically detect and respond to issues in real time. The ultimate goal is self-driving applications and data centres.

Gartner AIOPs diagram.

Performance monitoring suppliers that used to look at infrastructure components such as network gear or storage kit, and others that looked at applications are now having to look at the whole application-infrastructure stack. The goal is to develop integrated offerings that use machine learning because human analysis is too difficult and slow for real time responses to issues.

HPE is developing InfoSight to cover the whole data centre, and its recent Primera array includes InfoSight AI models which predict application performance using an on-board AI workload fingerprinting and headroom analysis engine.

VMware’s Project Magna is also developing a self-tuning capability with hyperconverged systems’ vSAN as its testbed.

To further its AIOps ambitions Virtual Instruments has released v6.2 of the VirtualWisdom app and infrastructure performance management software.

VirtualWisdom v6.2

VW v6.2 discovers and maps applications to the infrastructure, to monitor a whole app stack’s performance as it relates to an SLA. It applies real-time, AI-based analytics through an updated Wisdom AI engine. It’s said to work across hybrid data centres, meaning ones on-premises and in the public cloud.

The release includes Dell EMC Isilon integrationm with more than 1500 metrics collected at 10-second intervals, and several other new features;

  • Workload RightSizer – rightsizes VMs by scaling them up or down across an application, with settable policies for the amount of CPU and memory for each VM, host or cluster.
  • Workload Drift Analyser – real-time alerts when application workload behaviour is anomalous or is the root-cause of observed performance issues.
  • Predictive Capacity Management – Monitors, reports, forecasts and alarms against the capacity consumption rate with settable time period alerts before capacity exhaustion.

There was a supporting quote from Bob Laliberte, a senior analyst at the Enterprise Strategy Group; “Infrastructure issues must be resolved in near real-time to avoid impacting the business and its customers.”

Virtual Instruments CEO Philippe Vincent put out a prepared quote: “The future of IT operations is autonomous.”

VW v6.2 is not there yet but it is a little closer to delivering autonomy.

Our take

Blocks & Files thinks Virtual Instruments will need to partner with system vendors such as HPE and VMware, to integrate Virtual Wisdom with HPE’s InfoSight and VMware’s Project Magna so as to offer a heterogeneous AIOps capability.

Neither HPE’s nor VMware’s offerings will have the ability to look at third party-supplied app infrastructure components and that’s where Virtual Instruments and other external suppliers will be able to offer a helping hand.

VirtualWisdom 6.2 is available now.

Western Digital debuts 18TB and 20TB near-MAMR disk drives

By
Chris Mellor
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Western Digital has announced 18 and 20TB disk drives using a partial microwave-assisted magnetic (MAMR) recording technology implementation (ePMR). Sample shipments are due by the end of the year.

The path is now clear for WD to lift disk capacity to 40TB and beyond.

The Ultrastar data centre DC HC550 is a helium-filled drive in 16TB and 18TB versions. It uses either 8 or 9 platters and has conventionally recorded tracks. The drive implements a form of energy-enhanced perpendicular magnetic recording (ePMR) which has not been explained.

The 20TB DC HC650 has 9 platters and uses shingled magnetic recording (SMR), with zones of partially overlapping tracks, to cram in an extra 2TB of capacity over the HC550.

9-platter HC550/650 internals. Note the solid actuator hinge anchor to the left.

Current PMR (perpendicular magnetic recording) technology is reaching an areal density limit as the bit areas become too small to sustain a stable magnetic polarity. MAMR uses a more stable recording medium which can sustain smaller bit areas. But writing data now involves beaming microwave energy at the bit area to enable the magnetic polarity to be set by the read/write head.

Christopher Bergey, SVP and GM of WD Data Center Devices, told us in a briefing that WD has a 4-model range of data centre drives:  

The HC330 is the only 10TB air-filled drive with as few as six platters. Bergey said 14TB drives hit the market sweet spot, citing TrendFocus research saying that will be the dominant capacity point through to mid-2020. 

WD also has a 15TB HC620 which uses shingling but there is no pure 16TB drive in this list. Toshiba has a 16TB drive in its lineup as does Seagate with the 16TB Exos. Bergey said WD is skipping the 16TB level to progress straight to these 18 and 20TB capacity drives.

Shingled drives rule over flash

The company believes its host-managed SMR drives will become popular, and estimates half of its disk drive exabytes shipped will be on SMR by 2023.

Bergey said demand for high-capacity data centre disk drives will be sustained for several years. In other word they will not be washed away by SSDs using quad level cell or penta level cell flash. WD pointed to TrendFocus estimates of disk drive exabyte shipments to grow 36 per cent annually between 2018- 2023..

Also, WD cites Joseph Unsworth, Research VP at Gartner, who said, “In data centres, lower capacity/mission critical HDDs are increasingly being replaced by flash/SSD technology, however, the nearline capacity business critical HDD technology maintains a considerable advantage in ASP/GB. NAND Flash/SSD technology still has a long way to go to even reach 3X the ASP/GB so we still see a long-term (post-2030) opportunity for these capacity HDDs.”

HC330 and HC530 drives are available now. WD will sample the HC650 and HC550 drives to select customers by the end of the year, with qualification and volume shipments beginning in the first half of 2020. In other words volume ships of these drives are about nine months away.

In-drive SSD compression boosts performance and endurance – Seagate

By
Chris Mellor
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In-drive SSD compression bumps up over-provisioning capacity, reduces write amplification and extends endurance – how long the SSD lasts under warranty before wearing out.

The utility of data compression is strengthened with QLC (quad level) NAND flash drives which made their market debut in May this year. They have 33 per cent greater capacity than today’s TLC triple cell flash but endurance and performance is worse. This is because reading and writing the extra bit per cell is slower and wears out the drive more quickly.

So says Seagate which notes its Nytro 1551 TLC SSD drive compresses the data it stores.

In a presentation at last month’s 2019 Flash Memory Summit, Seagate managing technologist Erich Haratsch said the Nytro 1551 SSD’s compression algorithm is lossless and runs inline at full data rate in the drive’s flash translation layer (FTL).

The impact on read and write latencies is unquantified but low. However, less data after compression means the SSD writes less and therefore write performance improves.

Write amplification

A traditional FTL writes data in chunks with equal physical sizes that fit into a flash page. After compression the data chunks are varying sizes and the FTL has to write these to the media.

With random write workloads, write amplification – an SSD’s extra writes due to its internal processes – increases as over-provisioning decreases.

Slide from Seagate FMS 2019 presentation

For example, take a 12TB SSD, with 1TB over-provisioning – space set aside for use when flash cells wear out –  and write 12TB of data to it. This data is compressed by 25 per cent, with only 9TB actually written, leaving 3TB of empty space. In effect the drive’s over-provisioning capacity has risen to 4TB.

Haratsch’s take on in-drive SSD compression can be downloaded from the FMS 2019 site. 

For more reading Western Digital has a useful primer, Understanding SSD Endurance.

Also, check out our article, Samsung: Drive writes per day is not where SSD endurance is at.

VMware’s Project Magna applies machine learning to automate the data centre

By
Chris Mellor
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VMware is developing a cloud service to monitor software in customer deployments and tune it automatically to improve performance. This is Project Magna and its first target is vSAN in hyperconverged infrastructure.

It will work like this: customers select their key performance indicator – read or write optimisation or both. Magna examines their vSAN environment and compares it to the KPI average for stored and monitored deployments. If the site is below average, Magna changes it to bring it closer to the average.

When switched on via vRealize Operations (vROps), Magna Cloud Services records data from the deployed vSAN system and uploads it to a VMware data store, where it is analysed. A machine learning engine inside Magna identifies and implements performance tweaks.

vROPs displays the before and after state graphically so customers can see if performance has improved. VMware’s Project Magna people have yet to decide the intervals for system monitoring.

Reinforcement learning

Magna incorporates a reinforcement learning system that seeks so-called rewards. Magna looks at its own performance actions and strengthens those that boost customer vSAN performance

A VMware blog says: “Reinforcement Learning combs through your data and runs thousands of scenarios that searches for the best reward output based on trial and error on the Magna SaaS analytics engine. And this is automatically and continuously done across your vSAN clusters to ensure it’s always using the best settings to maximize throughput and minimize latency of your … hyperconverged infrastructure.”

Magna is also designed so that it does no any harm to systems it monitors, the blog states: “There are guard rails within the ML algorithms that will not decrease performance by any means.”

Project Magna is intended for all VMware’s software-defined data centre components covering compute, storage, network and security. These are vCenter, ESXi/vSphere, vSAN, VVols, NSX and Velo Cloud.

Magna is in tech preview and VMware has not committed to introducing it to a specific version of vSphere.

Cormac Hogan, a senior engineer at VMware, provides a more detailed introduction to VMware’s Project Magna and gives pointers for further reading.

HPE to make and supply Apeiron kit

By
Chris Mellor
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A couple of weeks ago Apeiron and its VC backer trumpeted a global OEM deal with HPE. There is less to this than meets the eye.

Making its debut in August 2017, Apeiron’s ADS1000 system can use Optane SSDs and delivers superfast performance, according to benchmark tests performed by ESG, an IT analyst firm. The Apeiron Data Fabric uses NVMe over Ethernet in a proprietary way and requires Altera FPGA-boosted HBAs and 40Gbit/s Ethernet switches.

President and CEO Chuck Smith came on board in January this year. He is an 18-year HPE veteran and, possibly coincidentally, Apeiron announced the global OEM partner deal with HPE in July. This see the ADS1000 integrated with ProLiant DL360 Gen10 servers. Apeiron gets to take advantage of HPE’s global reach, manufacturing capability and support. It does not mean that HPE sales will sell the integrated HPE/Aperion kit. In effect, HPE will build it and deliver it when Apeiron’s channel sell it.

VC Impact Venture Partners, called Apeiron one of its portfolio companies, when it announced the HPE OEM deal with a tweet;

Apeiron is one of many NVME-oF startups. Will it make the cut? The company appears to be tiny and funding is opaque. Certainly the operation is lean, with no heads of operations, sales, marketing or finance listed on its website or LinkedIn. There’s no PR agency and LinkedIn lists only 14 employees. CFO Rebecca Freeman left in May and sales veep Jim Steed left this month for a sales director role at Nutanix.

We sent questions to Apeiron last week and will update this story if and when it replies.

Toshiba buys SSD business, turns the LITE-ON

By
Chris Mellor
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Toshiba Memory Holdings Corp. is buying LITE-ON’s SSD business for $165m.

Nobuo Hayasaka, acting CEO of Toshiba Memory Holding Corp., released a prepared quote: “LITE-ON’s Solid State Drive business is a natural and strategic fit with Toshiba Memory and expands our focus in the SSD industry. This is an exciting acquisition for us, as it positions us to meet the projected growth in demand for SSDs in PCs and data centres being driven by the increased use of cloud services.”

LITE-ON is a Taiwan-based business supplying optoelectronics, storage, semiconductors and other devices. The company set up its LITE-ON Storage SBG SSD business in 2008 and designs, develops and makes SSDs in-house. The company uses Toshiba 96-layer flash in its EP4 PCIe SSD.

In May this year LITE-ON ranked third worldwide for PCIe SSD revenues as of the first quarter of 2019, as reported by Forward Insights.

Toshiba will own the LITE-ON SSD brands, operations, assets including equipment, workers, intellectual property, technology, client and supplier relationships and inventories, and gets access to its channels. These include LITE-ON’s relationships with PC suppliers such as Dell.

China syndrome

In January 2018 Anandtech reported that LITE-ON had signed a joint-venture deal with Tsinghua Unigroup to develop and build SSDs in Suzhou, China. The JV plant was planned for completion by the end of 2018. It seems reasonable to infer that Toshiba will get ownership of LITE-ON’s 45 per cent interest in this JV.

The JV, which was to start producing chips in the last quarter of 2018, would provide a separate source of NAND wafers for Toshiba, independent from its JV with Western Digital. Toshiba would also be able to bring modern 64-, 96- and 128-layer 3D NAND technology and fabrication expertise to the venture with Tsinghua Unigroup.

The deal would also bring access to the domestic Chinese market to Toshiba.

IPO and closure

Toshiba Memory Holdings’ IPO is now expected to take place in the first half of 2020. Timing has been delayed by Toshiba experiencing low NAND chip demand due to the US-China trade dispute.

The possibility of LITE-ON selling its SSD business to Toshiba was reported by Digitimes earlier this month.

The transaction is expected to close by the first half of 2020 and is subject to customary closing adjustments and regulatory approval.

Your occasional Storage Digest featuring Acronis, NetApp, Buffalo and more

By
Chris Mellor
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Shall we begin?

Acronis goes avidly into security services

Data protector Acronis has introduced a set of cyber services offering a combination of security risk assessments, vulnerability assessments, penetration testing, incident response services and awareness training. They are customised based on an individual’s role.

According to Serguei Beloussov, Acronis CEO, cyber threat assessments, best practices and preparedness training have been too costly and complex for anyone other than large enterprises to implement.  But now “with the launch of Acronis Cyber Services, we’re making enterprise-grade cyber protection solutions more accessible so every organisation can have the easy, efficient and secure cyber protection that’s needed today.”

Pay attention to the Buffalo

Buffalo EU has introduced the TeraStation 6000 NAS range for small and medium businesses. This is fitted with 8GB ECC memory and a 1.5GHz Intel Atom C3338 processor for the 6200N 2-bay desktop version and a 2.1GHz Intel Atom C3538 CPU for the 4-bay desktop (6400DN) and rackmount (6400RN) designs. It has storage options from 4TB to 32TB, a 10 GbitE network port and two 1 GbitE ports.

TeraStation 6000 NAS range.

It has Snapshot and iSCSI Volume Backup features. Snapshot takes images of the current data and creates restore points at fixed intervals. Backed up data is stored incrementally and in block units, so that each Snapshot captures the difference from the previous one, instead of backing up full data each time. This results in an efficient use of storage space and allows for a high backup frequency. 

NetApp performance on AWS speaks volumes

A NetApp blog looks at NetApp’s Cloud Volumes on AWS and their performance.

Cloud Volumes ONTAP is the ONTAP storage service running in AWS and Azure. The blog says NetApp, using FIO, saw up to 4,500MiB/s of sequential reads or 470,000 random read IOPS with a single cloud volume. It also reports up to 1,700MiB/s of sequential reads or 220,000 random read IOPS from a single EC2 instance.

The company used two separate sets of data, in its tests. One was a small 2GiB set to demonstrate theoretical maximums. The other was a larger 1TiB working set which caused IOs to traverse the entire storage subsystem, rather than rely upon data resident in storage memory. 

Shorts

Secondary storage hyperconverger Cohesity announced its DataProtect and DataPlatform products have gained VMware Partner Ready for VMware Cloud on AWS validation. With Cohesity, customers can back up and recover virtual machines (VMs) running on VMware Cloud on AWS. After completing an initial backup, users can archive VM backups to Amazon S3 and Amazon Glacier for long-term retention.

A 2019 Digital Storage for Media and Entertainment Report, from Coughlin Associates, provides 253 pages of in-depth analysis of the role of digital storage in all aspects of professional media and entertainment.  Projections are given out to 2024 for digital storage demand in content capture, post-production, content distribution and content archiving are provided in 63 tables and 128 figures. 

Analyst house ESG has a released a Technical Validation report looking at Dell EMC’s VxRail with Xeon Scalable Processors and Optane SSDs. The report states: “ESG testing validated that Dell EMC VxRail with Intel Optane SSDs provides the high performance and low latency that business-critical, virtualized workloads demand. The consistency of performance over time was particularly notable.” 

GigaOm author Enrico Signoretti has published Key Criteria for Evaluating Enterprise HCI report.

Igneous, an UDMaaS (Unstructured Data Management as a Service) startup, has used some its March $25m VC round to hire Mike O’Brien as chief revenue officer. His resume includes CEO roles and time spent at Dynatrace and Microsoft.

Microsoft wants to bring exFAT file system for SD cards and flash drives to the Linux Kernel. Read more in our sister publication The Register.

Paragon Software has released an updated Microsoft exFAT by Paragon Software driver with transparent read and write access to exFAT volumes from Linux, with additional performance optimisation for modern Linux kernels and lower CPU memory consumption.

Startup StorOne says TechData will be marketing its Storage-as-a-Service product, which uses Dell PowerEdge servers. It has achieved a total of fifty customers and a OEM partnership with an HCI supplier is likely to happen. StorONE also has a partnership with IBM concerned with small and medium business customers.

Prodigy Universal Processor developer Tachyum has joined the Compute Express Link (CXL) Consortium. CXL is a high-speed CPU-to-Device and CPU-to-Memory interconnect that offers high-bandwidth, low-latency connectivity between host processors, systems and devices, such as FPGAs, intelligent networking and storage accelerators, memory buffers, storage class memory and smart I/O devices. It joins CXL founders Alibaba, Cisco, Dell EMC, Facebook, Google, Hewlett Packard Enterprise, Huawei, Intel Corporation and Microsoft plus processor manufacturers AMD, ARM, and NVIDIA, as joint-CXL consortium members.

Pure Storage preps QLC flash storage array – analyst

By
Chris Mellor
-

Pure Storage could spring a 4-bit flash surprise on the industry next month, and attack nearline disk storage boxes.

This week, Aaron Rakers, a senior analyst for Wells Fargo, hosted investor meetings with Pure Storage’s chief architect Rob Lee and Matt Danziger, head of investor relations.

Pure did not discuss its product roadmap in the meetings but Rakers told subscribers: “We believe Pure could intro’ QLC NAND support for their arrays at the upcoming Pure//Accelerate end user conference in mid-Sept.”

He thinks Pure will use ”QLC to expand its TAM (total addressable market) into workloads that are not currently addressed – e.g. opportunities in second-tier storage applications; deepening encroachment vs. 7200 rpm enterprise HDDs.” 

Blocks & Files thinks Pure Storage QLC array will spark mainstream QLC flash adoption by the storage industry.

QLC SSDs are here. QLC arrays should follow

In May 2018 Pure Storage said the Flash Array //X system was ready to support storage-class memory (SCM) and QLC flash.

Pure Storage debuted the FlashBlade in 2016, making it pretty much the first all-flash array vendor to bring out a flash box for unstructured data workloads. Now it could be among the first to bring out a QLC (4bits/cell) flash box and use it for secondary data, attacking nearline 7,200rpm disk drive boxes.

Nearline or secondary data storage is dominated by disk drive arrays using 8TB-16TB hard disk drives spinning at 7,200rpm. Current TLC (3bits/cell) flash SSDs are too expensive for this workload, costing 10X – 20x more per TB than disk.

However, QLC flash changes the price differential . This adds another bit to TLC flash cells, increasing capacity by a third and lowering the $/TB cost.

Storage array costs could go down with the use of QLC flash, opening up the general nearline storage array market to flash boxes.

Vendors, such as Intel, Samsung and Toshiba are introducing QLC SSDs.

Startup VAST Data introduced the first QLC flash-based array in February 2019 but they do not feature in mainstream enterprise storage array product lines.

That could soon change.

Blocks & Files believes Western Digital could also introduce a QLC flash tier in its 2-tier IntelliFlash arrays and Toshiba could use QLC NAND in its partner-built KumoScale arrays. 

Dell earnings show it pulling away from the competition

By
Chris Mellor
-

Dell Technologies pulled in £23.4bn revenues in the second fiscal 2020 quarter, up 2 per cent, and eked a massive $4.5bn profit, thanks to an income tax provision.

In a statement Jeff Clarke, Dell Technologies vice chairman, said: “We are in the early stages of a technology-led investment cycle. IT spending remains healthy and our business drivers remain strong.”

No macroeconomic enterprise buying slowdown here – yet, so take that, HPE and NetApp.

Wells Fargo senior analyst Aaron Rakers pointed out Dell experienced “softer enterprise IT demand, though orders, ex-China, grew +4 per cent Y/Y.”

Analyst Patrick Moorhead of Moor Insights and Strategy, said: “Any growth in enterprise spend was good in this environment.” Yes, there was a “12 per cent decrease in servers and networking. [But] competitively, many companies were down so I’m not concerned. Overall storage was flat, but judging by the NetApp train wreck and Dell’s growth in all-flash, the company may have increased overall storage unit market share.”

Some headline numbers:

  • Cash flow from operations – $3.3bn
  • Cash and investments balance – $10bn
  • Diluted EPS – $4.83
  • $2.0bn of gross debt paid down in Q2 ($2.4bn year to date)
  • $17.0bn of gross debt paid since the EMC merger – leaving $36.4bn gross core debt.

CFO Tom Sweet said: “Operating income, gross margin and deferred revenue are up double digits, our PC business produced record results, and we saw record cash flow.” He also mentioned “growing operating income and EPS faster than revenue”.

Turning to that outrageous profit; Dell made a loss before income tax of $111m and then along comes a negative $4.62bn income tax benefit and, hey presto, we have a $4.5bn profit. Without that there would have been a loss.

Segment strengths

The main Dell businesses are:

  • Infrastructure Solutions Group (ISG) – revenues dipped 7 per cent to $8.6bn
  • Client Solutions Group (CSG) – PC revenues grew 6 per cent to a record $11.7bn
  • VMware – revenues rose 12 per cent to $2.5bn
  • Other businesses (Pivotal, Secureworks, RSA, virtustream, Boomi) saw $619m revenues up 8 per cent.

Within ISG, server+networking revenues were $4.4bn, down 12 per cent on the year, while storage was flat at $4.2bn. A chart shows how revenues for the two product lines are tracking each other closely after a gap when storage revenues fell back. But that period of storage weakness is over. In fact Dell is seeing slightly rising storage demand with orders up one per cent.

There was operating income of $1.1bn, up 4 per cent Y/Y to 12.2 per cent driven by better component costs and a higher storage mix. Dell reported strength in Isilon filers and its Unity XT midrange storage array. Hyperconverged VxRail orders grew an outstanding 77 per cent – as Dell basically slaughtered most of its HCI competitors.

It also saw growth in converged infrastructure.

Number one boasts

Dell said it is growing faster than competitors and cites IDC numbers which show it is the leader in external enterprise storage with 34.4 per cent share; leads in storage software (17.5 per cent); ranks first in all-flash arrays (34.2 per cent), and is first in hyperconverged systems (32.2 per cent).

It’s also number 1 in servers in revenues and units terms.

Earnings call

There was enterprise softness but not an enterprise buying slowdown.

In the earnings call Clark said: “We’re seeing a clear split between enterprise infrastructure and PC spending globally. In enterprise infrastructure the market is softer than we and the industry anticipated.” 

“We expect to remain soft through the balance of the year, particularly in China. We feel really good about our ISG execution in Q2 given the market context. In the first half, we acquired approximately 21,000 ISG customers, up 11 per cent from the prior year.”

The storage side of ISG looks good: “Our storage business remains healthy in Q2 with orders up 1 per cent and first half orders up 4 per cent. Our sales team remain optimistic about our portfolio and positioning as we head into the second half of the year.”

ISG servers were less good this quarter; “Outside of China, our server orders were up 1 per cent and we expect to gain share this quarter in North America and EMEA, when IDC publish its results next week. Our server ASPs remain strong, up high single digits, as customers are increasingly buying higher end system support for their … high value workloads.”

Enterprise sales softness was more apparent in servers than storage. A revenue weakness in China was due to Dell withdrawing from some hyperscaler business that wouldn’t be profitable.

Comment

Dell has turned EMC into a solid partner of ISG’s storage and server businesses. The combination of VMware’s software and Dell servers in hyperconverged systems plus the coming MidRange.NEXT product line should strengthen and consolidate the overall storage offer further.

Dell’s hyperconverged systems performance outstrips the competition by so much that distant competitors, such as Cisco, could walk away from this market.

Overall, Dell dominates the storage industry and is set to dominate it more. Some relative weaknesses include:

  • All-flash array HW/SW versus Pure Storage and others,
  • Data protection software vs Acronis, Commvault, Druva, Rubrik, Veeam, etc.
  • High performance computing, where Qumulo, DDN, HPE (Cray ClusterStor) and WekaIO look stronger 
  • Hybrid cloud – where NetApp’s Data Fabric looks good
  • Metadata management versus Hammerspace
  • File lifecycle management and tiering (InfiniteIO, Komprise), 
  • Secondary storage management vs Actifio, Cohesity, Delphix and others
  • Tape. 

But these are largely outliers, as seen from Dell’s mainstream market’s viewpoint. Why bother when it can make bigger returns by extending core products and taking share from everyone else?

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Blocks & Files is a storage news, information and analysis site covering storage media, devices from drives through arrays to server-based storage, cloud storage, networking and protocols, data management, suppliers and standards. We publish news, views, opinions and analysis of storage industry events and developments, aiming to keep storage users, developers, consultants, marketeers, salespeople, support staff, analysts and everyone else involved in IT storage up to date with what’s going on.

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