It was the worst of times. The industry changes had been gathering for a decade almost and by this time were starting to hurt.
The cloud was taking over all new business and some of the old. Flash’s performance was making high performance easy and reducing storage requirements commensurately. Software defined was displacing low and midrange storage, which was fine for margins but injurious to revenues.
Both companies had user events in Vegas the last month, NetApp Insight 2017 last week and Hitachi NEXT2017 conference two weeks ago.
As both companies respond to industry trends, they provide an interesting comparison to watch companies in transition.
Company role
- NetApp’s underlying theme is to change the world with data and they want to change to help companies do this.
- Vantara’s philosophy is data and processing is ultimately moving into the Internet of things (IoT) and they want to be wherever the data takes them.
Hitachi Vantara is a brand new company that combines Hitachi Data Systems, Hitachi Insight Group and Pentaho (an analytics acquisition) into one organization to go after the IoT market. Pentaho will continue as a separate brand/subsidiary, but HDS and Insight Group cease to exist as separate companies/subsidiaries and are now inside Vantara.
NetApp sees transitions occurring in the way IT conducts business but ultimately, a continuing and ongoing role for IT. NetApp’s ultimate role is as a data service provider to IT.
Customer problem
- Vantara believes the main customer issue is the need to digitize the business. Because competition is emerging everywhere, the only way for a company to succeed against this interminable onslaught is to digitize everything. That is digitize your manufacturing/service production, sales, marketing, maintenance, any and all customer touch points, across your whole value chain and do it as rapidly as possible. If you don’t your competition will.
- NetApp sees customers today have three potential concerns: 1) how to modernize current infrastructure; 2) how to take advantage of (hybrid) cloud; and 3) how to build out the next generation data center. Modernization is needed to free capital and expense from traditional IT for use in Hybrid cloud and next generation data centers. Most organizations have all three going on concurrently.
Vantara sees the threat of startups, regional operators and more advanced digitized competitors as existential for today’s companies. The only way to keep your business alive under these onslaughts is to optimize your value delivery. And to do that, you have to digitize every step in that path.
NetApp views the threat to IT as originating from LoB/shadow IT originating applications born and grown in the cloud or other groups creating next gen applications using capabilities outside of IT.
Product direction
- NetApp is looking mostly towards the cloud.
At their conference they announced a new Azure NFS service powered by NetApp. They already had Cloud ONTAP and NPS, both current cloud offerings, a software defined storage in the cloud and a co-lo hardware offering directly attached to public cloud (Azure & AWS), respectively. - Vantara is looking towards IoT. At their conference they announced Lumada 2.0, an Industrial IoT (IIoT) product framework using plenty of Hitachi software functionality and intended to bring data and analytics under one software umbrella.
NetApp is following a path laid down years past when they devised the data fabric. Now, they are integrating and implementing data fabric across their whole product line. With the ultimate goal that wherever your data goes, the data fabric will be there to help you with it.
Vantara is broadening their focus, from IT products and solutions to IoT. It’s not so much an abandoning present day IT, as looking forward to the day where present day IT is just one cog in an ever expanding, completely integrated digital entity which the new organization becomes.
They both had other announcements, NetApp announced ONTAP 9.3, Active IQ (AI applied to predictive service) and FlexPod SF ([H]CI with SolidFire storage) and Vantara announced a new IoT turnkey appliance running Lumada and a smart data center (IoT) solution.
Who’s right?
They both are.
Digitization is the future, the sooner organizations realize and embrace this, the better for their long term health. Digitization will happen with or without organizations and when it does, it will result in a significant re-ordering of today’s competitive landscape. IoT is one component of organizational digitization, specifically outside of IT data centers, but using IT resources.
In the mean time, IT must become more effective and efficient. This means it has to modernize to free up resources to support (hybrid) cloud applications and supply the infrastructure needed for next gen applications.
One could argue that Vantara is positioning themselves for the long term and NetApp is positioning themselves for the short term. But that denies the possibility that IT will have a role in digitization. In the end both are correct and both can succeed if they deliver on their promise.
Comments?
Earlier this week I attended Hitachi Summit 2016 along with a number of other analysts and Hitachi executives where Hitachi discussed their current and ongoing focus on the IoT (Internet of Things) business.
Hitachi has been in the OT (Operational [industrial] Technology) business for over a century now. Hitachi has also had a very successful and ongoing IT business (Hitachi Data Systems) for decades now. Their main competitors in this IoT business are GE and Siemans but neither have the extensive history in IT that Hitachi has had. But both are working hard to catchup.
For one example of what Hitachi is doing in IoT, they have recently won a 27.5 year Rail-as-a-Service contract to upgrade, ticket, maintain and manage all new trains for UK Rail. This entails upgrading all train rolling stock, provide upgraded rail signaling, traffic management systems, depot and station equipment and ticketing services for all of UK Rail.
The success and profitability of this Hitachi service offering hinges on their ability to provide more cost efficient rail transport. A key capability they plan to deliver is predictive maintenance.
Hitachi said their new trains capture 48K data items and generate over ~25GB/train/day. All this data, will be fed into their new Hitachi Insight Group Lumada platform which includes Pentaho, HSDP (Hitachi Streaming Data Platform) and their Content Analytics to analyze train data and determine how best to keep the trains running. Behind all this analytical power will no doubt be HDS HCP object store used to keep track of all the train sensor data and other information, Hitachi UCP servers to process it all, and other Hitachi software and hardware to glue it all together.