It’s been over a month (and three hurricanes in America) since I’ve posted a blog. More than a few of you’ve noticed – thanks for the prodding…
It’s been a busy summer, on nearly every front. Customer activity hasn’t slowed down, and the good news surrounding the (otherwise unfortunate) economic crisis embroiling many customers (especially those in the financial services industry, a heavy concentration for Sun) is that it’s whipping up the winds of change. Customers facing spending pressure, or tiring of vendor price increases have new options, and there’s a new appetite to explore those options (nothing like mandates from the CEO to reduce spending by 50%).
One of my more interesting recent meetings wasn’t with a customer, though, it was with an equity analyst from a global financial institution. Equity analysts publish research that feeds the investment community – their (free) research and financial analysis accompanies buy/hold/sell recommendations to investors (who hopefully generate trading fees for the analyst’s employers).
This one analyst hadn’t historically followed Sun, and was in the process of developing his first rating. He wanted to focus on our storage plans – more and more of the customers whom he interviewed were focused on storage, and many were talking up a specific open source software technology: ZFS. (Before meeting with me, he’d talked to colleagues in his own IT shop, and was impressed to find some who admitted to running ZFS at home – nothing like touching your customers where they live… if you’d like to have ZFS sent to you, click here or on the LiveCD shown at right.)
Granted, you can see an increasing focus on storage at Sun – the acquisition of MySQL is as much a storage acquisition, as an enhancement to Sun’s developer offerings. Discussions of flash memory, the economics of archiving, the Lustre parallel file system, all point to an increasing focus on what Sun sees as an exceptional opportunity for customers (and thus, investors). Storage and computing are converging – and we’re about to bring the trends that transformed the server industry a few years ago (mass engagement in open development communities, and scale achieved via clusters of commodity parts vs. proprietary technologies) to the historically closed and proprietary storage industry.
Now, the notion of “engaging customers in open development communities” doesn’t sit well among some traditional storage analysts (or our competition) who believe “Storage is too mission critical to tolerate open source software.” Although I appreciate that wisdom and experience, I think the market’s more nuanced than that – mission critical environments don’t tolerate unsupported software, true, which is why we offer 24×7 commercial support for ZFS (on Sun hardware, and Dell, even). But broad global adoption of key open source projects will continue to drive change deep into the world’s datacenters. Gartner’s prediction that 90% of world’s companies will run open source software didn’t specify where they’d be running it – “everywhere” is the safest bet.
But back to the equity analyst – he patiently asked, “Great theory, but when will you see revenue results?”
“Last year,” I responded. “You’re seeing it accelerate.”
As many folks know, we shipped our first ZFS based storage systems in 2007 – known as Thumpers. Thumpers finished up this last year generating around $100m in billings, up 80% year over year. From a capacity perspective, we delivered roughly 90 petabytes of Thumper storage in FY2008, to some of the most demanding storage installations on earth (up ~200% y/y). What’s fueling the growth? Adoption of ZFS is a clear driver (this chart gives you a sense of where we’re seeing adoption – thus revenue opportunity). But ultimately, customers are recognizing they can save money, space and power. Thumpers are roughly twice the capacity in half the space at half the cost of the competition – $1.20/Gigabyte. (They also run Windows and Linux with the same hardware economics).
Now, our view is “OpenStorage” (systems built from commodity parts and open source software) will grow far faster than the proprietary storage market. We plan on driving that growth, and over the next few months, you’ll see a tremendous amount of storage innovation targeting the growing breadth of customers wanting better/faster/cheaper/smaller options. Expect to see flash, zfs, dtrace, and good old fashioned systems engineering play a very prominent role in an aggressive push into the storage market.
And in case you missed our announcement last week, our progress was validated by industry analysis – IDC said customers are growing their disk storage business with Sun far faster than with any of our proprietary competition. And at three times the rate of the overall market’s growth. A great place to start.
If you’d like to know more, and might be interested in taking a Thumper system for a free trial run, just click here and pick the country in which you’re located. We supply most systems at Sun for free trials across the globe (yes, we even cover shipping to you). If you like the system, please buy it. If not, we’ll take care of getting it returned to Sun, you owe us nothing. (That’s the closest we can get to free hardware downloads…)
As I said to the analyst, you need only look to the results we’re already delivering to see the linkage between open innovation and revenue growth. ZFS won’t transform demand for our legacy products, but it’ll certainly transform the opportunity and industry unfolding before us. But don’t just get our opinion, the best folks to validate our approach aren’t at Sun, they’re among the storage buyers finally feeling the winds of change – at their backs.