IBM leads the shift from server… to cloud… driven data storage

Eric Herzog (Chief Marketing Officer and VP of Global Channels for IBM’s storage division) held an analyst meeting at the beginning of February, which gave me an excellent chance of catching up on the division’s progress. IBM typically reports only its storage systems hardware revenues in its quarterly financial reports, but disclosed in its Q4 quarterly financial call that its storage software accounted for 42% of the storage division’s revenues in Q4, which implies that its total divisional revenues were $2.6 billion.

Hardware shifts towards all flash, NAS goes to software

The mix of hardware revenues includes Storwize products (an increasing number of which are installed in VersaStack solutions – a converged infrastructure range jointly owned by Cisco).

Buying Texas Memory Systems (TMS) back in 2013 enabled IBM to build an ‘all-flash’ story at an appropriate time, when startups were challenging the major storage systems supplier who were understandably slow. Since then it has introduced Storwize systems alongside its more expensive FlashSystems, which originally came from TMS.

IBM’s latest storage system announcements include:

• New Ultrium 8 tape drives, which double the capacity in the same footprint, reduce server impact during backups to speed performance by 20%, added 256bit encryption to improve security and addressed regulatory requirements in its WORM cartridges.
• Introduced new FlashSystem and updated all-flash VersaStack systems based on new capacity drives.
• It announced its support for Cisco’s MDS 9132T 32G fabric switch for its storage networking.
• Launched the TS7700 virtual tape solutions for its z Systems.
• Announced NVMeoF (Non-Volitile Memory PCIe over Fabric) capabilities for its FlashSystem 900 to be introduced in the first half of 2018.
• In April last year it introduced the Elastic Storage Server – a combination of a Power 8-based server, huge storage capacity and Spectrum Scale software.

Like other storage systems suppliers IBM has to add value over and above the raw capacity increases which constantly give users ‘more for less’. Its announcements show that it is trying to look after its existing customers by working on older technology (such as tape) as well as on leading edge product areas such as NVMeoF and software Defined Storage.

Software – Spectrum gains new offerings

Back in 2015 IBM corralled all of its storage software products under the Spectrum brand. Originally the naming was based on generic functions, but its latest offerings include the technology-specific title ‘NAS’. Its latest announcements include its:

• Spectrum Protect 8.1.5 – adding automated ransomware detection and audit logging and tracking of meta data for requirements of the EU’s GDPR regulation coming in May this year,
• Storage Utility Offering – allows its customers to convert their purchasing from capital to operational expenditure to OPEX for storage systems installed on premise, which builds on the fact that a large proportion of IBM’s storage system sales involve some Global Financial Services participation and
• Spectrum Protect Plus on the IBM Cloud, which allows secure backups to be made when storing them on the IBM Cloud; it indicated that versions for AWS and Azure will come later.

When the Spectrum Storage range was introduced I had trouble remembering which product names were renamed. Now I have difficulty because there are so many different offerings. So my table is designed as an aide memoir: 

Table – IBM Spectrum offerings, functions and relationships as of February 2018

Source: ITCandor, 2018

IBM also offers the Spectrum Storage Suite, which bundles Spectrum Accelerate, Archive, Control, Protect, Protect Plus, Scale and Virtualize with Object Storage together. Customers pay for those elements that they put into production on a ‘per TB’ basis, and can use all of them without extra cost for test and development. It claims that this offers big savings over buying the software products separately. It’s a testament to the way IBM has developed the Spectrum range so that all the products work together – not something that can be said for a number of other major storage systems vendors’ software.

Cloud – backup and resilience

IBM and AWS are the two-horse leaders of the cloud services (IaaS and PaaS) market. Despite data storage being a major driver of cloud adoption, many users are still put off by regulations and security concerns. Many governments around the world require company data to be held in country, which reduces the number of cloud suppliers to those with data centers close by. IBM has a strong reputation for secure computing and has data centers in many locations (see Figure), which will help it expand its business.

Source: IBM, 2018

In addition to the numerous enhancements to its Spectrum range (many of which have specific relevance for cloud usage), its recent announcements also include IBM Cloud Object Storage. This offering allows users to use and manage object-based storage on-premise or on the IBM Cloud through S3 RESTful APIs with a minimum configuration of 72TB. It offers cross-region, regional and single data center options for adherence to data location regulations as well as standard, vault or cold vault storage classes. Data ‘at rest’ is secured using server-side encryption, while data ‘in motion’ is secured using carrier-grade Transport Layer Security/Secure Sockets Layer (TLS/SSL) encryption.

The chances of future success

It’s refreshing to see a storage systems supplier doing well in a difficult market. While users get more for less by (Moore’s Law driven) capacity increases of spinning and solid-state storage alike, IBM has continued to focus on high performance, high security offerings with competitive price tags attached. Today Dell/EMC and HPE are the leaders of both the storage systems (see Figure[1]) and server markets; despite partnering with Cisco for VersaStack, IBM is at a disadvantage. In future I’m sure the cloud (where IBM is the leader) and software (where it is second only to Dell EMC) will be more important than servers for driving storage systems sales and IBM, as the joint leader in cloud services and a leader in storage software (see Figure) will no doubt take full advantage.

[1] Based on ITCandor’s market model December 2017