Amazon deployed more storage capacity last year than any other single storage company. Conservative estimates put Amazon at close to an exabyte of data under management. AWS S3 is not only the largest single storage system ever deployed, its capacity dwarfs the shipping capacity of any one of the traditional storage companies: EMC, NetApp, HDS, Dell, HP and IBM. As a matter of fact, the combined capacity shipped by the traditional storage vendors is just over twice what Amazon, albeit the largest of the cloud storage providers but still only one company, ships in a year. While EMC, the best performing of the traditional vendors grew just around 30% last year, Amazon almost tripled in size. And that’s just Amazon. Microsoft who is fighting to stay relevant in the new world is following Amazon into this gigantic opportunity.
Is it the end? Do these numbers spell the end of the traditional storage company? Not necessarily. The storage company needs to evolve and, while doing so, it cannot lose sight of what is really at the core their business.
Enterprise storage has always been driven by value, not volume. The most successful storage companies in the world never made a single hard drive. Instead they assemble hard drives into arrays and created storage systems that made those drives useful to their customers. It does not matter if a hard drive is sold on customers’ premises or in the cloud. Enterprise storage has never been a business of hard drives. An enterprise storage controller is faster, more reliable, more functional than the sum of its parts. That’s why the traditional storage vendors still command the lion share of the value, a.k.a. the money, in storage.
Cloud storage providers, like Amazon, are the new hard drive. They are the new component makers: volume players shipping raw storage capacity at excellent levels of reliability and global availability. These companies are currently waging an aggressive price war on one another. Storage is the foundation to the entire compute cloud stack. It makes sense for cloud providers to heavily discount the storage or even give it away in exchange for customers that will then be forced to consume compute services. This is a high speed chase to the lowest possible price point. It is a race that the traditional enterprise storage vendors can benefit from by treating the cloud as a component, a new class of hard drive that brings cloud into the enterprise.
Enterprise storage vendors have an opportunity to breathe fresh functionality into their platforms. Cloud storage as native component built into the traditional storage architecture heralds a new class of storage system that can serve as the backbone for true global data synchronization while being able to absorb vast amounts of data on demand. It’s the best of both worlds. The simplicity, scale and global reach of the cloud with the functionality, the performance and the value of enterprise class storage.