Innovate the Future

Original Web Article: Dell puts customers on fast track to storage efficiency

Review Summary: 
Deduplication is a critical component to maximizing storage utilization efficiency and minimizing bandwidth requirements to offsite storage and processing. But, with shifts in solid state storage and RAID technologies, deduplication is quickly expanding beyond backup.
Review/Analysis:  
Dell is expanding its services models. It has to. Otherwise, it will stay a manufacturer of commodotized products battling to keep its share of razor thin margins.
 
Dell’s new efficient storage management services are just what the doctor ordered. Why? Because very few people know what the heck deduplication actually is! And why it is important!
 
Deduplication in its simplest form is removing redundant or duplicate data and indexing it in some way so that data retrievals return the right data. 
 
People who have actually heard of deduplication assume it has something to do with making offsite backup less expensive. Foundationally, that is exactly correct. There are two primary flavors: dedup it before you send it across the wire and dedup it after it arrives at the other end.
 
But, deduplication can be applied in-line before the information is ever written to primary storage. The problem is that deduplication can be slow and hard disk drives are already slow enough. Plus, when you add in processor and storage virtualization, you start to create a major disaster if the servers or drives crash.
 
All of the problems are about to be eliminated. Prices are dropping drastically on solid state drives (SSDs). Utilization of solid state drives can cost more than traditional hard drives, but they eliminate the disk bottleneck and eliminate most of the wait that processors have historically had to do.
 
In addition, release of new technologies like PMC-Sierra’s 6Gb/s RAID-on-a-chip further accelerates I/Os and embeds the survivability factors needed in a virtualized environment.
 
Dell hasn’t announced services in this space yet because the combination of RAID-on-a-chip, solid state drives, in-line deduplication and virtualization is still evolving. But its time has come. The costs are coming down, the needs for compressing data centers are increasing (power, ROI, virtualization) and the technologies are all converging.
 

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

Original Web Article: Cisco Won’t Take on Amazon in Cloud

Review Summary: 
You can actually hear those old ‘network equipment’ roots at Cisco wrapping around and strangling the neck of Cisco’s potential in new markets.

Review/Analysis: 
After over 30 years in high-tech and twenty-five patents I feel confident in my judgement that Cisco has excellent technology. They also have superb testing and packaging. Who can argue with their past numbers? If anyone can deliver a winning infrastructure, Cisco can.
 
The world of the Internet and data centers is shifting at a staggering pace. Cisco helped accelerate the shift by alienating HP and IBM when they announced their new enterprise servers and their Unified Computing System. 
 
But, the shift is far more than who is an equipment vendor, a software vendor and a systems integrator. Companies like HP want to do it all and do it well. That is why HP bought EDS. To become the management layer of their customers’ technology assets. Once you manage it, you can replace it with your own technologies.
 
In the SMB space, Dell is doing the same thing with its alliance with ATT(NYSE:T) and its ProManage offering. The combo, if properly executed, could provide a superb new area of dominance for Dell. Because Dell will manage the infrastructure not just sell the equipment.
 
Almost all software companies, either publicly or privately, are talking about creating versions of their products that are ‘good enough’ and that function in the cloud. Oracle(NASDAQ:ORCL) is doing Fusion (time will tell if Oracle can succeed at segmenting its massive applications). The goal is to lower the cost of entry and snag new customers. Once snagged, they are largely owned. And Software as a Service and Cloud Computing are the perfect ways to control the destiny of your customer base.
 
If Cisco wants to compete against HP, IBM and others in their own back yards then Cisco needs to get on the same evolutionary roadmap. It is not just about selling servers, de-depulication, storage, etc. It is about actually providing and CONTROLLING the future of the infrastructure of the customers.
 
Components to provide the infrastructure of the cloud will commoditize over time. Maybe a short period of time. Competition is fierce, is growing meaner by the hour and is accelerating the commoditization. IBM(NASDAQ:MSFT) and now HP understand that it isn’t enough to sell equipment. You have to own the customer’s infrastructure, manage it, deploy it, replace it. Microsoft(NASDAQ:MSFT) new that in the software space 20 years ago.
 
Cisco probably doesn’t want to compete against potential customers like Amazon(NASDAQ:AMZN) in the cloud computing space. Eventually Cisco will have to compete against the Cloud as a Service providers…because Cisco’s former partners and now their competitors are already doing so.

 

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

Original Web Article: Why Dell should buy Palm

Review Summary:
Dell needs to move quickly if it is to keep its numbers up as PCs continue to commoditize. Dell needs a new consumer play and there isn’t time to sit around architecting one. Dell needs Palm. 

Review/Analysis:
Dell is a great company. Smart people. Good products. Global infrastructure. Commoditizing markets. Thin margins.
 
Three choices: 1) Hunt for another EDS, or piece-meal acquisitions, and try to compete in the services space with HP and IBM. 2) Attack the small to medium business (SMB) market. 3) Expand their considerable presence in the consumer space.
 
So, let’s look at the three choices:
 
Enterprise: If they want to spend a lot of money they could try for an Accenture(NYSE:ACN) or Computer Sciences Corp. or even CapGemini. For less money they could get a Keane. Where would that leave them?
 
Small/Medium: The SMB market had been hard for all of the big boys to crack. ATT(NYSE:T), Verizon(NYSE:VZ), HP, IBM…no one does it well. Can Dell?
 
Consumer: Dell has nailed the consumer market before. There are many options, but Dell has to get away from dependence on PC sales.

Almost everyone assumes Dell is going to do the first one and attack the enterprise space along with HP and IBM. Why do they assume this? Because the money is in services, solutions and recurring contracts. But, the risks to Dell are staggering. Dell is not an enterprise service company. It will have a hard time changing that perception and its management are, well, the wrong folks for entering the enterprise market.
 
Dell has already showed its interest in the SMB market. With the announcement of the expansion of their ProManage managed services and an agreement with ATT, Dell just might be able to pull this one off where others have failed.
 
What is Dell really good at? Packaging. Consumer products. 
 
Will Dell abandon its roots and enter a highly competitive IT enterprise services market with everyone fighting tooth and nail? Will Dell risk its future on the small/medium business market where almost everyone has already failed?
 
Dell is a great product company. They need to use that greatness to their advantage. Leading consumer electronics companies are having hard times right now. Look at Motorola. Probably too expensive, but a possible merger? Look at Palm. Having some problems, but really good foundational technologies.
 
Palm could give Dell the fast entry it needs. With Dell’s international network of assemblers Dell could slash production costs and help work the kinks out of Palm. Palm would give Dell the technologies it needs to come to market first with many new consumer offerings.
 
HP’s iPaq is a non-competitor. Motorola(NYSE:MOT) is missing the boat. RIM hasn’t figured out what cool device looks like. The Sony(NYSE:SNE) Satio and other devices are still two quarters away.
 
A match made in heaven. But, Dell better move fast.

 

 

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

Original Web Article: H-P Recruits Alcatel for Cisco War

Review Summary:
Cisco(NASDAQ:CSCO) jumped into the enterprise server space with the introduction of its Unified Computing System (UCS(JNB:UCS)). Now it is competing against its former partners IBM(NASDAQ:MSFT) and HP. Did Cisco(NASDAQ:CSCO) under estimate the fallout?

Review/Analysis:
In March, 2009, when Cicso announced its entrance into the enterprise server market, Cisco(NASDAQ:CSCO) broke through the traditional barriers that existed between the network vendors and the server vendors. Many speculated that Cisco(NASDAQ:CSCO) might have gone too far (’Cisco Steps on Server Giants’ Toes’). The biggest projected impact would be on major Cisco sales partners IBM(NASDAQ:MSFT) and HP. 
 
Cisco’s(NASDAQ:CSCO) move was not unexpected. In fact, the push-me/pull-you between Cisco and HP had been yanking back and forth for years. HP wanted to enter the home networking market and Cisco(NASDAQ:CSCO) balked. HP avoided emphasizing some of its products to avoid irritating Cisco which purchased well over $500M in equipment from HP.
 
HP is not all innocent in this game. HP had been prepping for a long time  to move into many territories that could have been construed as Cisco(NASDAQ:CSCO)’s. The expansion of the ProCurve line with the acquisition of Colubris started to show HP’s cards and Cisco(NASDAQ:CSCO) undoubtedly started to twitch.
 
Undoubtedly, the acquisition of EDS by HP brought home to Cisco the need to quickly get into the IT infrastructure and enterprise server markets. Otherwise, Cisco would be partially stuck in the same tar pit that is crushing Nortel(TSE:NT) and has had a strangle hold on many other telecom equipment providers. Cisco(NASDAQ:CSCO) had to move and move fast or be left behind as an also ran in the enterprise solutions space. 
 
The Alcatel-Lucent(EPA:ALU)(ALu)/HP ten year agreement is a great deal for HP. Even without many details, it is obvious that the HP/EDS group will be doing a major overhaul of the Alcatel-Lucent data centers and EDS will be absorbing ALu staff.  HP will also benefit from the expanded offerings of ALu’s(EPA:ALU) products and exposure to major ALu customers. 
 
I think Alcatel-Lucent(EPA:ALU) got the short end of the stick in the agreement. The volume of sales from the HP alliance will likely be small, and there are lots of very good competitors in the product areas that Alcatel-Lucent(EPA:ALU) is bringing to the agreement. But, it’s better than emulating Nortel.

 

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

Original Web Article: Them’s Fightin’ Words: Cisco Says HP-Microsoft Alliance Cuts Out PartnersReview Summary:
The recently announced alliances between HP & Alcatel(EPA:ALU) and HP & Microsoft(NASDAQ:MSFT) takes another swing at Cisco. Cisco(NASDAQ:CSCO) better stop ducking and start swinging. 

Review/Analysis:
When Microsoft(NASDAQ:MSFT) and HP announced their expanded alliance and the investment of $180M on unified communications and collaboration, Cisco(NASDAQ:CSCO) said it “lacks the power of Cisco’s network”. I knew HP had their own global network for their Halo product suite, but I concurred in principal with Cisco. Not anymore.
 
When Alcatel-Lucent(EPA:ALU) (ALu) and HP announced their alliance today and that Alcatel-Lucent(EPA:ALU) would provide software components and HP would do ALu’s data centers, they forgot to mention the network capabilities that Alcatel-Lucent(EPA:ALU) brings to the collaboration table. I suspect that these are not a direct part of the ALu/HP alliance, but are Alcatel-Lucent’s(EPA:ALU) cards to play.
 
Undoubtedly, we are looking at a three way alliance forming between Alcatel-Lucent(EPA:ALU), HP and Microsoft. The possibilities boggle the mind.
 
Cisco(NASDAQ:CSCO) is good. Cisco is very good. But, I am betting on the new threesome to win in the collaboration market.  

 

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

Original Web Article: Dell Looks To Ramp Up Acquisitions For Growth

Review Summary:
Michael Dell is no slouch and is leading his company into new arenas. Dell recently moved on the SMB space with ATT. Now Dell is gearing up for acquisitions. Data Centers? Hand Helds? New Arenas?

Review/Analysis:
The commoditization of the PC and pursuit of recurring enterprise contracts has caused major shifts in market players HP (acquisitions of LeftHand, EDS), Oracle(NASDAQ:ORCL) (acquisition of Sun(NASDAQ:JAVA)), Cisco(NASDAQ:CSCO) (acquisitions of Richards-Zeta and Pure Digital) and IBM(NASDAQ:MSFT) (acquisitions of Transitive and Exeros). Dell has no choice but to follow suit. Or does it? Many are speculating that Dell will attack the same enterprise data center space. 
 
Michael Dell has a history of innovation. He can think way outside the box. The current box: data center consolidation, outsourcing, virtualization and storage changes (deduplication, RAID-on-a-chip, SSD).
 
So, the question is will Dell act conservatively and jump into the same box with IBM(NASDAQ:MSFT), HP, Oracle(NASDAQ:ORCL) and Cisco. Or, will they attack the consumer arena (that has been so good to them) in new ways. Apple(NASDAQ:AAPL) did it and won big. Dell is very capable of doing the same thing.
 
Since Dell has already announced new positions within the SMB space, I would look for them to do two things over the next six months:
 
1) Strengthen their position in enterprise.
2) Evolve their position in the consumer space.
 
Possible acquisitions in the enterprise space: NetApp(NASDAQ:NTAP), Brocade(NASDAQ:BRCD), Emulex(NYSE:ELX), QLogic, BMC, 3Com(NASDAQ:COMS)
Possible acquisitions in the consumer space: Motorola(NYSE:MOT), Palm, IRiver, High Tech Computer.

 

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

Original Web Article: PMC - Sierra Up 71% Since SmarTrend’s Buy Recommendation

Review Summary:
PMC-Sierra’s(NASDAQ:PMCS) new 6Gb/s SAS chipset is only part of the reason that PMC-Sierra(NASDAQ:PMCS) is on the upswing. The real reasons start with the ‘blink’ factor and Cisco(NASDAQ:CSCO), HP, IBM, Oracle(NASDAQ:ORCL), Sun(NASDAQ:JAVA), Brocade(NASDAQ:BRCD), ATT(NYSE:T) and many others. Who would blink first and shift between the competitor vs vendor categories.

Review/Analysis:

 The astounding rise in PMC-Sierra’s(NASDAQ:PMCS) stock price is driven by much more than the release of a faster RAID chipset. 
 
In the past, it was easy to place a major company in a particular category or market like telecom, data center, system integrators, etc.:
 
- Network Vendors - Cisco(NASDAQ:CSCO), Alcatel-Lucent(EPA:ALU), Nortel…
- Server Vendors - HP, IBM(NASDAQ:MSFT), Dell…
- Storage Vendors - EMC, NetApp…
- Telecom Providers - ATT(NYSE:T), Verizon…
- System Integrators - IBM(NASDAQ:MSFT), Accenture(NYSE:ACN), CapGemini…
 
The world has changed in the last six months. I have been waiting for the last five years for someone to ‘blink’ and start competing against their vendors and customers. Oracle(NASDAQ:ORCL) blinked and bought Sun. Cisco(NASDAQ:CSCO) blinked and entered the enterprise server market. And now the shifts are occuring at lighting speed as companies realign with new partners, make new acquisitions and enter new markets.
 
The key market of the hour is the data center. This includes outsourcing, cloud computing, consolidation, virtualization, deduplication and many other buzz words du jour.
 
And now there is a perfect storm in the storage arena. In-line deduplication combined with raid-on-a-chip combined with solid state drives allow data to move almost as fast outside the processor as inside. Virtualization allows maximum usage and sharing of processor and storage resources. Cloud computing allows sales to new customers that could afford the old data center models. Software as a Service allows utilization of best of breed (or good enough) platforms by customers who previously couldn’t afford to utilize packages like ERP.
 
The changes that are coming:

Everyone wants to get into the ’solutions’, ‘management’, ‘data center’, ‘virtualization’ markets. The goal is to find a customer base that has deeper pockets, is less subject to churn, can provide stable recurring revenue and can be counted on for expanded purchases.
 
The easily defined categories of the past ‘telco’, ‘vendor’ and ’service provider’ have all been muddied since the bubble popped in 2001. HP bought EDS. IBM has Global Services. Cisco(NASDAQ:CSCO) is shifting into servers and data centers. ATT and Verizon are doing cloud computing. 
 
Reviewing Verizon Business’ “data center” offerings shows them to be mostly co-location opportunities backed by a ‘global IP network’. “Virtualization” is a consulting offering to evaluate your servers using VMWare tools to try to bring in VMWare and new servers.
 
Making an alliance with Accenture will probably not help a great deal. Accenture is a large enterprise player. Large enterprises will listen to Accenture and then buy their data center/management services from a large, flexible service integrator with a proven track record and a large pool of available consultants.
 
Perhaps VzB should consider the SMB markets? They could:

 

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com