NASHUA, New Hampshire -- At Dell's offices in New Hampshire, there's a Facebook-esque graffiti wall employees are encouraged to drawn on, and someone has sketched rifle crosshairs over the name NetApp.
Dell has a lofty goal in mind: to become the world's number three storage vendor, and the first step is to surpass the number five player -- the Sunnyvale, California-based NetApp.
Given that Dell is a $60 billion tech company, that goal may not sound so lofty. But in most people's minds, Dell is still synonymous with personal computers. That Dell is even on the leaderboard in enterprise storage says a lot. The company's New Hampshire office houses its EqualLogic division, one of five storage companies Dell has acquired in the last five years. The office was built by onetime computer giant Digital Equipment Corporation in 1980, and as with so many of Dell's acquisitions, the idea is to bring back the sort of engineering culture that pervaded DEC in its heyday.
The staff has even restored the engineering history placards that lined the hallways when DEC owned the place. "There's a lot of innovation going on in this facility right now," said Lazarus Vekiarides, head of software engineering at EqualLogic. "As we move forward you’ll start to see some more interesting things coming out of here and elsewhere in Dell."
With those engineering placards -- as well as those carefully placed crosshairs -- the office is a symbol of the new Dell. The company now offers everything from PCs to servers and storage to big tech consulting services, and thanks all those acquisitions, it plans on doing more and more of its own research and development. But the office is also representative of a much larger shift across the world of big tech.
As businesses migrate their data centers onto virtual servers, reducing the number of physical servers they need to run applications, server sellers like Dell feel the squeeze. But virtual servers require more storage, so the big server sellers -- including not only Dell but HP and IBM -- are doubling down on the increasingly hot market.
Virtual World
Vekiarides calls the move to virtual servers a "complete platform refresh." Virtual servers are more flexible and efficient than running operating systems and applications directly on physical servers. Not only are individual businesses moving their operations to virtual servers, companies like Amazon are offering up virtual servers over net via "cloud services," so that business can run applications without any physical servers of their own.
Ultimately, says Vekiarides, "a typical user of computational services will probably never see a physical server."
The side effect is that virtualization shifts computing infrastructure away from distributed pizza-box-style servers, and toward centralized densely packed racks of processors and disk drives. In the past, only larger companies used centralized storage, says Andrew Reichman, a principal analyst at Forrester Research. Today, a big shift is underway because many small and medium-size businesses are using popular server virtualization software VMware. "When you use VMware you really have to use centralized storage to get the benefits," Reichman says.
Four years ago, Dell was a server seller trying to accommodate the shift to virtual servers. But the dedicated storage systems that go with centralized servers were missing from Dell's lineup. The company initially filled this need by reselling products from the storage market leader, EMC. But Dell wanted to own their own technology and chart their own course. So after lining up the pieces it needed to go it alone, Dell officially divorced EMC last year.
Buying power
Dell's acquisition of EqualLogic in 2007 was the beginning of the company's transformation, and 2010 was the year it kicked into high gear. That year, Dell bought two other storage outfits -- Exanet and Ocarina -- then got outbid by HP for third: 3Par. But Dell quickly bounced back and bought an outfit called Compellent, and last year, it added RNA Networks.
Each of these acquisitions provides a different piece to the puzzle. EqualLogic's storage area network (SAN) connects servers to arrays of disk drives. Servers talk to the disks in the same way they talk to internal hard drives, and store data in small chunks, or "blocks".
Compellent also makes a SAN, but it boasts what's called automated tiering. The drives that store data can be organized in hierarchies, or "tiers", based on how fast they are and how much they hold. Faster, smaller storage technologies like solid-state disk drives are near the top of hierarchy and slower, larger technologies like hard disk drives and tape backup are lower down.
It makes sense to store data that's accessed frequently, which tends to be newer, on faster media, and less frequently accessed data, which tends to be older and more voluminous, on slower, capacious media. Compellent's system automatically figures out which tier a given piece of data belongs on and moves it among tiers when the data's status changes. "It's a better mousetrap in a lot of ways than what the entrenched vendors have been selling for years," says Reichman.
Meanwhile, the Israel-based Exanet offers a network-attached storage (NAS) system. This is like a SAN, except the storage appears to servers as an extension of the file system and data is stored as files. Then Ocarina makes deduplication software, which is similar to file compression software but works on whole files rather than strings of bits. It scans data being stored and replaces duplicate copies of files with small digital placeholders. Given the many copies of files organizations store, this technology saves a lot of disk space.
Lastly, RNA Networks pools the memory of a set of servers into virtual memory. The key is "having really high performance, fast media in your server and having that be a logical extension of your SAN," says Travis Vigil, Dell's head of enterprise storage marketing.
But these acquisitions weren't just about the technology Dell acquired. The company also landed substantial engineering organizations. It now has 800 software engineers working on storage in five facilities, half of them in EqualLogic's Nashua building. When Dell opened its new office in Silicon Valley, it called the place a Research and Development Center, and its staff includes the former employees of Ocarina.
Bits and Pieces
On the R&D front, the first order of business for Dell's engineers is making all the pieces work together. The concept is to extend Compellent's automated tiering, dubbed Fluid Data, across all of the Dell storage technologies. Allow someone to start with a low-end storage array and eventually grow to have the largest Compellent product, and the same data will have been automatically migrated through the entire chain of products, says Vekiarides. "That's the vision. The technology is available in bits and pieces today. And every year we'll get more and more of it in place."
Dell is working on two key pieces of technology to make this happen. The first, based on Exanet technology, allows for file-based tiering across product lines. The second, based on Ocarina technology, allows for common deduplication across product lines. "If you have common and consistent deduplication, you don't have to hydrate and dehydrate as you move from platform to platform," says Vigil. "You can move that data with maximum efficiency in its deduped form."
It's a nice vision, but Dell has a lot of integration work to do to make the vision a reality, says Reichman. "If they can take all of these good technologies that came from these acquisitions and make them fit together, and continue that philosophy of moving data automatically over time, then I think Fluid Data becomes more than the tagline for Compellent."
At the same time, Dell has to keep an eye on the future. Three technologies are on the company's radar: solid-state disks (SSDs), cloud gateways and object storage.
SSDs and other Flash technologies are increasingly becoming a requirement for enterprise storage. This week number one player EMC released Flash-based cache. Dell is working in a similar direction. Our vision is to have a customer that has solid-state disks in the servers, said Vigil. Dell is looking to do this as "a logical extension -- call it a tier 0 -- of the SAN, with common management with your storage tools," he said.
Several companies are also developing gateway products that extend storage systems to public cloud services. Cloud is becoming a tier of storage, but ultimately it needs to be a feature rather than a standalone product, says Vekiarides. "Three years from now, if your storage doesn't have some capability of tiering off to a service provider cloud whenever you need some bursting capability, you're going to be a third-rate vendor."
Object storage is another wave of the future. It's particularly useful in building cloud storage infrastructures. In object storage, data is stored in logical groupings -- for example, the set of files that make up a multimedia document.
In the Beginning
But Dell's goal of being a top three storage vendor isn't realistic -- at least according to Forrester's Reichman. But he believes that although the company won't make as much headway as it would like among the big enterprise businesses, it has a chance to be very successful in the "midrange market" -- i.e. among smaller outfits.
"There's a lot of things that make me feel like top-tier, big-iron storage architectures -- the pure enterprise class -- is a shrinking market," Reichman says. "In some ways, maybe Dell will be happy to be more focused on the mid-range. I think in the long run that's going to be the bigger part of the market."
At the very least, Reichman says, Dell has the right strategy. "They certainly have deep pockets and they certainly can do R&D," he says. "It's not a bad starting point."
