M&A and business things

First up, Tegile was acquired by Western Digital (WDC). This is in part due to WDC’s desire to be a one stop shop vertically integrated supplier for storage parts, systems, etc. This is how all of the storage parts OEMs needed to move, though Seagate failed to execute this correctly, selling off their array business in part to Cray. Toshiba … well … they have some existential challenges right now, and are about to sell off their profitable flash and memory systems business, if they can just get everyone to agree …

This comes from the fact that spinning disk, while a venerable technology, has been effectively completely commoditized. It is an effective replacement for tape systems … and yes, I disagree strongly with a number of people I tremendously respect, on this particular matter. Tape is, apart from specific niches, dead. Tape vendors, tape drive vendors, are not long for this world, and are struggling mightily … though maybe not as intelligently as they could.

Over time, flash (TLC and QLC) will IMO get cost competitive per GB stored with spinning disk. Then the only thing holding back a full on switch over to flash will be manufacturing capacity issues. Until then, spinning disk will likely remain dominating the slower and colder tiers of storage.

When that crossover hits, disk will be the new tape.

Many years ago, in grad school, a buddy leaving the program wrote all his directories out to vax-tape, because, you know, vaxes … and tapes … are forever. I gotta ask him how that is working out. I have 30 year old floppies I can still (barely) read. Not so sure on vaxes. Or vax-tapes. I may have an old DLT cartridge from backups of my home Indy from 20+ years ago sitting around. No way to read that tape. Drives don’t exist anymore. I do have some ATA drives from that time period, and the capability to attach them and read them.

Which is more permanent?

Ok, back to the vertical integration. WDC seems to be doing some of the right things. They are investing in building an ecosystem that a customer can purchase offerings across a wide range of capabilities. This is IMO a sound direction, though it will require careful work to avoid competing with one’s own customers.

Second, Coho Data closed. I’ve been saying this for years, but … storage arrays as a market are slowly drying up. Somewhat of a long tail, but this is part of the reason EMC sold itself to Dell. The storage array market of all flavors and shapes (flash, disk, …) is contracting. More competitors are pursuing larger pieces of a shrinking market. Part of what drove WDC to buy Tegile, and build the rest of their plan appears to be a desire to have a foot into not only that market, and help control the flux into other markets that it also has a presence in, but also to manage the changes in that market by helping to shape how it evolves.

Coho died as the market is crowded, and non-differentiated hardware combined with an effectively random software stack of dubious actual value (which is the approach of a fairly large number of these groups) is not a viable strategy. Though with the right pedigree founders and connections, it appears you can liberate quite a bit of money from VCs in the process of failing.

Curiously, differentiated hardware, stuff that actually adds value to the software layers above it, do not seem to be in vogue for the past decade or so. But the new hotness is also NVMe-over-fabrics. Basically lets take the SAN model … and use PCIe as an interconnect. But … we need to encapsulate the PCIe into infiniband or … ethernet … packets, first.

So now we have too many of those folks proudly making benchmark guesses as to where their systems will matter, and what they can deliver. While what I see are actual numbers falling far short of what I was doing 2+ years ago. On a shoestring budget. With no venture backers.

I am not being bitter … ok … maybe a little … but I am being blunt. There are too many of these companies out there, without a valid defensible difference.

Yeah. I am not happy Coho died. It won’t be the last though.

We are into the culling phase of the market. Weaker organizations will be shut down. IP sold for a song.

Coho won’t be the last. Just on the leading edge.

Another aspect worth mentioning is the impact of clouds upon this. I’ll touch on this in a future post.

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