In the past two years, we have been privy to two exciting bidding wars that ended in two-billion dollar payouts
for both 3Par and Data Domain. Despite the fact that they were in two
different ends of the storage market, there is a lot to be learned from
both of these companies. The key factor is that both companies focused on the task at hand. They essentially did one thing really well. In the case of 3Par, it was
simplifying block storage in the enterprise, and in the case of Data
Domain, it was simplifying backup storage. Each company's focus made users' jobs easier, and users voted with their dollars.
Both companies focused on infrastructures
that were unconventional. 3Par
sold with a Fibre Channel block-storage system when IP
and NAS are all the rage in primary storage. Data Domain entered the
market with a primarily IP-based disk backup system when Fibre Channel
VTLs were all the conventional offering. In other words, you don't have
to do what the market is telling you to do, you have to do what makes
the most sense for your product's capabilities.
Both companies became identified with a single feature, for the most
part, that they rode to the promised
land. Neither was the first out with that feature
nor were they the first in the overall category. In the case of 3Par,
the
feature was thin provisioning and in the case of Data Domain it was
deduplication. Clearly, they do more than this, but the companies, either
by luck or design, realized that
becoming the poster child for a particular capability would allow them
to focus their limited resources and capture the attention of busy
users. It is also interesting to note that those two features had something
specific in common: they allowed users to do more with less in a
tangible way. We always talk about how customers are being forced to do
more with less, but thin provisioning and deduplication actually make that
happen. Performance is nice, but saving money and keeping things
simple are critical.
When both companies started promoting their
technology, the incumbents in the space called those features too risky
and dangerous, until of course they brought out or OEM'd the feature
themselves. Most importantly, when thin provisioning and deduplication
started to become commonplace, 3Par and Data Domain didn't abandon the
technologies. They kept promoting how their implementation was better
and more mature, keeping their focus instead of deciding to come out with a newer better
feature. Both companies had a track record of
ignoring the twinkling lights of opportunity and
kept focused on the big payoff at the end of the road. 3PAR did enterprise,
tier one storage. Data Domain did disk-to-disk backup systems. They were
not dabblers in other areas of the market. I see companies all the time
that try to be primary storage vendors but will also try to sell their
solutions for backup, for archive and anything else that might capture a
customer or two.
Another key similarity is that in both cases these were complete
systems. While the systems were largely driven by software, that
software was delivered with hard drives and controllers. While I like
software-only solutions and virtual appliances may change this, clearly
customers and companies tend to buy complete systems instead of kits. While both 3Par and Data Domain are or have been clients of Storage
Switzerland, this is really not so much a tribute to them as to their
methodology. If you want to be successful in the storage market, you
need to provide complete systems based on a single software stack, that
are simple to use, even in the enterprise, and you need to stay focused on
your area of the market even when times are tough.
