Comment Holding up Compellent as an example - and with an emphatic sideswipe at some business ethics - Compellent CEO Phil Soran opened his company's CDrive conference today by saying: "Big business isn't going to pull us out of this recession. Nor big computer computers. It's the small and medium-sized businesses that are going to have to pull us out."
Soran lamented a decline in business ethics, mentioning - amongst other things - a survey finding that 45 per cent of law students had cheated in their studies. He encouraged people to be ethical, focussed on efficiency, enthusiastic and entrepreneurial, and declare: "Screw the recession up."
Compellent results backed up Soran's sentiments, with his company being the only publicly-owned storage company currently exhibiting growth in profits. For its first 2009 quarter (Q109), Compellent recorded revenues of $28.1m, up 53 per cent year-on-year and 4 per cent sequentially. Net income was $1.0m ($0.03/share) compared to Q108's net loss of $1.6m (-$0.05/share). It was Compellent's fourteenth quarter of record revenue numbers, and it was fueled by 98 new customers in the quarter. The company now boasts 1,376 customers.
Some 45 per cent of the quarter's revenues came from existing customers. Average customer spend peaked at $22,652 in Q308 and has fallen sequentially since to $20,422. The gross margin is 52.8 per cent, up from Q108's 52.2 per cent.
Operating expenses rose from Q108's $12.05m to $14.03m. But within that, both R &D and sales and marketing spend rose while general and administrative expense fell to $1.4m from the year-ago quarter's $1.7m. The company is being run very tight reins. Soran said Compellent hit the $100m/year run rate in Q408. With these results demonstrating an ability to almost scythe through recessionary constraints, are we looking at the next billion dollar a year storage company here?
Asked if people at Compellent were getting the scent of the possibility of it becoming a billion dollar company, Bob Fine, Compellent's director of product marketing, said: "Absolutely." Soran has also been musing about the need to keep the spirit of the founders alive. He knows that few founders are still at their companies when it becomes a billion dollar a year earner.
Road map 2009
The whole Compellent product idea is built on having a single architecture that can scale. Soran and his team are very keen to say that they have a storage architecture of sufficient granularity (the tracking of blocks on drives), on which they can layer more and more functionality. They say that, for example, their automated placement of blocks of data on different tiers of storage is unique, based on a block's meta data and activity level. That means the company's Storage Center FC/iSCSI SAN product can adopt solid state drives (SSD) with no real upset at all and with no need for manually setting up volumes based on an SSD tier of storage in the array.
Customers are already testing Compellent arrays with STEC SSDs plugged into drive slots in the Xyratex-sourced array enclosures. Compellent marketing head Bruce Kornfeldt said: "You will not need a lot of SSDS to get really good performance with Compellent. Everyone else will have to have 8 or 10 SSDs. We'll only have to have four (and) existing customers can slot SSD into drive slot and, with the latest firmware, their controller will recognise it."
Coming later this year is a hoped-for qualification from Cisco for Compellent storage hooked up to Cisco's UCS virtualised and unified blade server and networking system. In probable connection with this, Fibre Channel over Ethernet (FCoE) support is coming.
It seems that both Emulex and QLogic are possible sources of this technology, QK+Logic iSCSI and FC cards being shipped by Compellent currently. Emulex points out that its Gen 2 converged network adapter (CNA) card will be half the size of the Gen 1 card and include iSCSI, TCP/IP offload, FCoE, 10gigE, RDMA, and iWARP - think host clustering - in its single ASIC. The company expects that the equivalent QLogic product will only have FCoE and 10gigE. Emulex can offer, it says, better use of server and controller ports.
SAS drive technology will be introduced into Storage Center in the third quarter of this year. There will still be the option of a Fibre Channel link to host servers, and that will rise to 8Gbit/s speed. A card swap will be all that is needed to accomplish that, but the direction is for SAS use inside the arrays, with 6Gbit/s SAS 2 helping out. Initially, the maximum number of SAS drives in a Compellent array will be limited, probably to around a hundred.
Virtual controller ports will be introduced with the current need for reserve ports abolished. This and the SAS drive option will provide for lower-cost entry-level product. This will also lead to port failover within a controller.
There will be a new version of the snapshot facility, known as Replay Manager 5.0. and a parallel release of the Enterprise Manager software, also version 5.0. Consistency groups will be added, and it will be possible to map hundreds of servers, a thousand or more perhaps, in a single operation.
With Replay Manager 5.0, it should be possible to achieve a Recovery Point Objective (RPO) of zero. Marty Sanders, VP for technology services, said: "Users will be able to move volumes between Storage Centers with no downtime - they'll have live transparent volume movement between storage centres (like vMotion) with no disruption and no changes to running apps."
Compellent will offer a Portable Volume facility, a means of jump-starting replication by avoiding an initial great long online session to transfer data. You can copy and encrypt it instead to one or more 1.5TB USB-connected external drives, which are physically carried over to the remote site. Then only changes, the deltas, are replicated online.
Protection is being enhanced to cope with double drive failures, RAID DP.
Sanders mentioned that 10,000rpm Fibre Channel drives will probably go away. Compellent uses Seagate drives and Seagate is going to price 10Ks at the same level as its 15,000rpm drives. There might be low-power 10K drives left in Seagate's lineup but the direction is to the elimination of 10K FC drives.
And in 2010
Turning to 2010, Compellent will introduce 10gigE iSCSI, both as a target and an initiator. Synchronous Live Volume will be introduced, meaning two separate Compellent SANs can run in active:active mode with automatic failover, and obviously, a sufficiently high bandwidth link will be needed between them.
The CDrive audience requested tighter NAS integration, more scalability and more performance. Currently, Compellent provides a Windows Storage Server-based NAS gateway. High-end NAS vendor Exanet - which has the leading SpecNFS benchmark score - is a sponsor of Compellent's CDrive and used by Compellent's channel when more NAS features are required than the Windows-based product can provide. No decision has been made about how this better NAS functionality will be delivered by Compellent but it should be delivered.
A new Series 40 controller will be introduced. Yes, Compellent is aware of Nehalem and evaluating it, but no Series 40 processor decision has been made yet. SAS 2 is also expected in 2010 with customers simply adding a 6Gbit/s SAS 2 card into their Storage Centers. Compellent also expects to introduce 2.5-inch small form factor drives as well, possibly with either 24 drives in a 2U enclosure or 48 in a 4U box.
Compellent also has distributed data centre support on its roadmap, some time after Synchronous Live Volume.
Unchanging basic business model
Compellent has no intentions of changing its basic business model of having a single architecture-based upgradable product line with a single and perpetual license for all software features and sales fulfilled by the channel. It will assist in sales but the channel gets the deal - always.
Its aim is to provide efficient storage with no wasted space and a highly efficient management interface with smart automation of functions. It sees no need to introduce new product lines to introduce new features like SSD, citing EMC's introduction of its new CX4 Clariion as the only way for Clariion users to get both SSD support and future FCoE support. That means CX3 users have to upgrade and re-license software and so forth.
Compellent users simply upgrade their existing controllers, possibly with nothing but firmware, and get new Storage Center features like SSD and FCoE support.
This single line product range could be a imitation for Compellent. Certainly, rivals will say so, asserting that the product architecture is mismatched to customer needs at the very low-end and the very high-end, however good it is for Compellent's sweet spot of the small and medium enterprise.
Compellent will rebut this, saying every other storage supplier could choose to do what it is doing but has decided not to, based on technology limitations or business model need. Compellent is a disruptive fore in the storage industry because of his deliberate avoidance of architectural or business model-based storage product limitations.
This is a company that has started getting a huge amount of self-confidence. Its people and its channel partners are thinking privately and beginning to say publicly: "If we can grow like this in a recession with the competition cutting prices and introducing new products left right and centre, then think what we can do when the recession ends."
The Compellent people don't believe cloud computing - private cloud computing Cisco, HP, and IBM style - will fundamentally alter the storage market's structure. There will still be a strong, strong market for external attach storage with unified virtualised blade server and networking systems.
Soran and his team are beginning to think that, yes, they have actually come up with something as good as NetApp was when it was founded. (Soran has just read Dave Hitz' autobiography, How To Castrate A Bull</em., by the way). They really do have an architecture, a business model, and a culture that they can use to grow Compellent to a billion dollar a year company, leaving fellow second generation SAN suppliers 3PAR and Pillar Data way behind. Maybe they are right. Maybe Compellent is the chosen one, the next golden storage child. We'll see - it will be an eventful ride. ®