​Reseller News Roundtable - Examining the storage state of play for Kiwi partners

Dell, EMC, Hewlett Packard Enterprise, NetApp, Westcon and partners discussed the changing role of storage in New Zealand.

“The world has gone crazy,” remarks James Kennedy-Moffat, Sales Director, NetApp, when opening the discussion at the Reseller News Roundtable - Shifting the role of storage: How the channel can rise to the enterprise challenge.

“Now I’m the cool guy in the room because storage and the Intellectual Property businesses have is King.”

In assessing the state of play in the storage market across New Zealand, Kennedy-Moffat believes businesses up and down the country now see data, and the information that comes with it, as the “most important” part of the technology equation.

While it wasn’t always like this, in the modern era, the role of storage within enterprise has changed.

Traditionally, money and people were long considered the key assets of organisations but in the 21st century economy, data and information are now also considered crucial enablers of growth.

In this Information Age, the importance of managing data assets has become of paramount importance, with a greater focus on storage solutions to better understand the characteristics, structure and limitations of a data-driven culture in the digital workplace.

As such, flash-based storage in particular continues to move from being an expensive niche technology targeted at a few workloads to a more mainstream option across enterprise.

Analyst firm IDC points to the broader availability of products, a growing level of familiarity with the benefits of solid state technologies, and declining prices as adding to the momentum of flash-based storage, as a tsunami of data continues to crash over New Zealand organisations.

“The impact of flash has been quite prevalent in New Zealand,” adds Arron Patterson, Chief Technology Officer, EMC. “We’re seeing a reasonable proportion of storage deals heading in that direction, with a heavy flash bias.

“Storage has always been a little bit of a black art, when specific skills around designing solutions were required. That’s starting to broaden out however and we’re seeing more cases for large object stores, and specific storage for specific use cases.

“New Zealand by and large has tended to go down the hybrid array route, but we’re also starting to see more differentiation in the types of workflow deployed.”

Arron Patterson - Chief Technology Officer, EMC
Arron Patterson - Chief Technology Officer, EMC

Industry figures cite increasing availability of flash-based products across a broader range of use cases, as vendors improve messaging and drop component prices to help mitigate the biggest concerns to enabling even broader adoption of flash in the future.

Of course, some end-users believe they do not have the workload demands or budgetary appetite for flash-based storage systems, but on the whole, the pace of adoption of flash-based storage solutions, backed by numerous offerings from suppliers of enterprise storage systems ranging from start-ups to the tier 1 vendors, is ample proof of a tremendous interest in this technology.

“In New Zealand, we’re absolutely ahead when it comes to flash,” adds Richard Prowse, Business Manager - Storage Platforms, Hewlett Packard Enterprise.

“Because of the Kiwi culture and the fact that even our largest enterprises are not unmanageable, we’re starting to see flash dominate.”

For Prowse, in overlooking the development of the storage and data platforms for Hewlett Packard Enterprise in New Zealand, such domination represents challenges for the rotational data storage market, which he believes remains relevant through legacy-based systems.

“Flash domination is to be expected,” he adds. “Organisations are expecting second to none user experience and if you want to be instant and ready to go, flash is a way of achieving this.

“We find that if flash is at a price point that is sustainable and efficient, then businesses in New Zealand will adopt flash and as a result we’re seeing a huge move across all of our cases, as well as bringing new customers into flash.”

The Dell perspective, led by Andrew Diamond, Director of Storage and Data Management and James Arnold, Country Manager - concur that flash is dominating the storage scene in New Zealand, in reflection of global trends.

With all leading vendors in agreement, it seems clear that all solid-state technology will become commonplace in primary storage systems soon.

Diamond, in drawing on his specialist storage background, believes flash represents a “transitional technology”, as businesses seek new ways to address traditional objectives.

“Historically speaking,” observes Diamond, “businesses look at storage for reliability, efficiency and performance.

“With flash we’ve nailed performance as the technology white papers over those concerns and issues.

“But now we’re at the point where the technology is outpacing our demand from a workload perspective.

“That means developers can be a little bit more lazy than they have been in the past but the real knock-on effect, and the real opportunity, lies in our partners abilities to sit down with their customers and to really understand what they are doing, how they are operating and how they can help derive real business value.”

Diamond’s analysis of the shifting role of storage, from the user side of the fence, is simple; “They’re not looking for storage as storage anymore.”

Instead, businesses are seeking more bang for their buck, around analytics, data management, archiving capabilities and the like, as they search for data service providers who can deliver this value.

“Businesses are looking for more intelligence out of their storage,” he observes, “the business use has changed.”

With the room in agreement that the flash market in on fire in New Zealand, the end result is the emergence of vendors aggressively flash optimising offerings to provide improved performance, longer endurance, higher reliability, and lower effective dollar per gigabyte.

There is no question about the importance of flash's future in the data centre, and although the initial market entrants with flash-optimised offerings were all start-ups, at this point, all the traditional enterprise storage vendors have joined the party.

James Kennedy-Moffat - Sales Director, NetApp
James Kennedy-Moffat - Sales Director, NetApp

“Flash is on the upward curve,” adds Kennedy-Moffat, when forecasting local market trends for 2016.

“Flash has come in, it’s super cheap and offers different types to deploy. But it won’t be around for very long before we go to something far more persistent.”

Alluding to Diamond’s earlier comment, Kennedy-Moffat believes the transitional nature of the technology will ensure that flash isn’t around forever, despite its impact on the market today.

“Back to my earlier point of the world going crazy,” he adds, “it’s because any technology that is new, and any technology that is not common, businesses by and large pay a premium for it.

“Historically, businesses have paid top dollar for new technologies which flood the market and change everything.

“But the price of flash has dropped so quickly that everyone can now afford to deploy it, at least in some form so it should follow the old rule of thumb - it’ll expensively disrupt the market then over time, cheapen and decline.”

Market trends

At a macro level, global information security spending will reach $US75.4 billion in 2015, an increase of 4.7 percent over 2014.

Delving deeper into the spend, high-profile data breaches continue to impact board-level decisions, as the need to not only protect information, but also recover data gains greater importance.

But as cyber-criminals continue to target organisations of all sizes, IT managers responsible for company and customer data recognise the need to take security to the next level.

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This is not a New Zealand-only initiative of course, as organisations at a global level recognise the importance of incorporating security in storage strategies to keep data secure in the event of a breach.

“If it doesn’t tick the security box, then it doesn’t matter,” adds Arnold, in representing Dell in New Zealand. “Cyber security is absolutely top of mind from the individual to the large enterprise to government and everyone is somewhere along that journey.

“But you can’t defend against anything because they are already in, full stop. Businesses must understand the actions needed to take in the assumption that an attack is enviable, and also how to mitigate the damage of such a breach.

“This awareness is coming into play quite significantly as organisations look at different ways of managing security.”

As Arnold points out however, the broad issue of security can at times make for vague discussions and out of touch technology and strategies.

“Crucially,” he adds, “businesses can’t stop the other things they have to do and with this explosion of data, they now need to understand what data to keep and what data to get rid of.”

James Arnold - Country Manager, Dell
James Arnold - Country Manager, Dell

Take the Sony hack as a recent case in point, or the Target breach, or even the Home Depot attack, the point remains that enterprise data security has become a growing concern, as the rise of external threats continues.

From a partner perspective, the rising tide of security concern at a business level has crossed over into storage, with organisations now realigning priorities and rolling out new protection initiatives.

“Of the businesses we are selling to, security is a huge concern,” says Jon Waite, Chief Technology Officer, Computer Concepts Limited. “If it isn’t top of mind among Kiwi decision makers, it is certainly very close.

“For storage, what we find is that as you tick each box in terms of performance and what the platform can deliver, the big problem focuses around security.

“There’s lots of innovation in the market at present but they are not answering all of the security questions in one platform.

“It’s definitely a challenge for partners when looking at managed storage services, storage-as-a-service and we consider security above everything else.”

Waite, when discussing the decision making process of the Christchurch-based tech company, says CCL looks at two key areas when selecting storage technology, which stand tall above performance and price issues.

“Firstly, can we get support for it in New Zealand?” he explains, “and secondly, is it secure?

“Then we examine performance and cost conditions but if we can’t tick those two boxes first, then we don’t proceed any further.”

Jon Waite - Chief Technology Officer, Computer Concepts Limited
Jon Waite - Chief Technology Officer, Computer Concepts Limited

Unsurprisingly, security remains the top priority for CIOs and IT decision makers in New Zealand, as they continue to be influenced by the never-ending stream of cyber attacks, across all sectors and verticals.

But when the security box is ticked, what next? What happens to the data? And where does the innovation come from?

Data assets

“The answer differs by organisation,” Arnold adds. “Some organisations have a good understanding of the data they are housing, and collecting, where it is and what they what to do with it.

“Others, and this is probably the larger amount, think what is the data we are collecting?”

Arnold says because data derives from all kinds of sources and enterprise avenues, businesses continue to remain in the dark about where their data is stored, and perhaps crucially, how they can use the information to innovate.

“That’s one of the challenges for the reseller community,” he adds, “to provide such a service back to customers.

“What is the data that you are collecting? What do you want to do with it? What is the business driver?

“The discussion must focus around what businesses are trying to achieve and working backwards from that.”

Gartner findings show that in 2015, 80 percent of CEOs claim to have operationalised the notion of data as an asset, yet only 10 percent say that their company actually treats it that way.

While many companies rely on data every day to make decisions or to create a better customer experience, and business leaders and IT executives continue to wax about how their company’s information is one of their most important assets - in reality, few treat it that way.

“In New Zealand, everyone sees the vision and can figure out that the Internet of Things and all these devices are producing vast streams of data, but challenges still remain,” Prowse adds.

“Truthfully, some organisations are embracing data at a local level, and are working out strategies and extracting value. But not all.

“I think the biggest challenge lies in finding IP that can be utilised as a commercial advantage, when goes back to business reasons.”

Richard Prowse - Business Manager - Storage Platforms, Hewlett Packard Enterprise
Richard Prowse - Business Manager - Storage Platforms, Hewlett Packard Enterprise

While Prowse accepts Kiwi organisations recognise the value of data, the sheer information overload remains the biggest barrier to innovation.

“How do I use this?” asks Prowse, offering a deeper insight into how businesses in New Zealand think when it comes to data. “If I’m a bank collecting data such as customer interactions, visa transactions etc, how do I capitalise on this information?

“It’s not going to be a penny drop moment for businesses but once they figure this out, on their journey, the way data is used in business will change.”

As pragmatic New Zealanders, Prowse asks how businesses can take smaller databases in the banking, telco and retail spaces as examples, and utilise the information for a value output.

“Businesses want instant results, they don’t even want to wait a day,” he adds. “If they’ve just ran a marketing campaign then they want to have the results and essentially fail fast. App developers are also driving a lot of need for storage and we’re still on the upstream journey in this respect.”

Data, in truth, can only take an organisation so far, adds Kennedy—Moffat, citing the real drivers as the people.

“The value lies in the intersection of the data sets,” he explains. “Where do they intersect to give us the most meaningful data and it is the ability of the human mind to see where that value lies.”

Storage drivers

Patterson, drawing on six years of experience as Chief Technology Officer in the New Zealand market, believes enterprise has only “scratched the surface” in terms of innovation and disruption, but encouraging trends are emerging locally.

“New Zealand businesses are doing some cool stuff with data,” he adds, believing that most industries are “ripe for disruption.”

The majority of CIOs across both sides of the Tasman however, as Patterson observes, expect the biggest challenge to business to come from a disruptive technology they’ve never heard of within the next five years.

“New start-ups based in the cloud, not carrying legacy systems, are looking to create this new value proposition,” he adds.

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“And for enterprise this creates a challenge - how can they latch onto this?”

Patterson believes the inability of enterprise to disrupt remains a contributing factor to the shifting dynamic of the market, and its subsequent impact on storage technologies.

“Enterprise innovates but doesn’t disrupt,” he explains. “True disruption is addressing a problem that your customers don’t have but large organisations are intrinsically set up to deal with problems that their customers have, not to expand on this.”

Most CIOs understand this, but for Patterson, they struggle to hang onto the notion meaning start-ups and innovative business models take centre stage, as businesses look to incorporate the new kids on the block to stay ahead of the game.

“The problems which these new start-ups are solving, and the manner in which they are solving them is creating a challenge for enterprise,” he adds. “How do we take those guys and put them inside our organisation to create new disruption?”

In New Zealand, and indeed the rest of the world, IT departments by definition are not designed to be disruption of start-up friendly.

But in examining the art of the possible, and understanding that to both survive and thrive innovation must be incorporated, the market is shifting and thus, impacting storage.

These new guys are not using traditional storage arrays,” Patterson adds. “They are using architecture that looks nothing like what we traditionally build enterprise applications on today so that’s going to seriously impact the market.”

To harness the streams of data flooding through enterprise doors, and the thirst for innovation at a boardroom level, the role of the Chief Digital and Data Officer aims to help - unifying organisations and bringing together different departments in the name of digital progress.

“Two teams compete within organisations, the business units who want to drive and outcome and IT, who does what IT does,” Arnold adds.

“Those aren’t always the same thing which is why new roles are coming into play in large enterprise to try and deal with that.”

As a result, Diamond believes the market is witnessing a shift in spend coming from enterprise, with storage tied into the new way purchasing technology.

“IT spend is now coming out of the business units who are the innovators in enterprise,” he adds.

“They are using those service catalogues, those innovations and the dev ops and the public cloud to be able to stand up and try things on a much more rapid basis to become more competitive in the market.

“IT departments are typically constrained by the policies of the organisations that they work in, sometimes that is policy they made themselves, but they are tying to change and become more agile and more responsive to business needs.”

Craig Murphy - HP Alliance Manager, Dimension Data
Craig Murphy - HP Alliance Manager, Dimension Data

Role of the partner

With the storage scene now set in New Zealand, and a clear picture emerging of where channel partners can capitalise and grow revenue, it is also worth nothing the shifting role of the reseller in the equation, as outlined by Craig Murphy, HP Alliance Manager, Dimension Data.

“In terms of managing the data explosion, organisations have barely got it under control,” he observes.

Coupled with the rise of flash, the need for security, innovation and data assets at an enterprise level, Murphy believes the trickle down effect leaves businesses perplexed as to how to efficiently handle the changes.

“Six months or a year from now, what will the storage market look like?” he asks. “Looking at data, businesses are struggling to see two or three years out which is why we are rolling out big picture projects with our customers.

“We’ve taken on more of a consultancy role because the way businesses manage and back up data is changing, and it is of huge concern.”

As a specialist in server and storage platforms, Murphy says at present, businesses are tasked with supporting hundreds, or even thousands of apps and workloads, all with varying performance and capacity requirements.

As such, flexibility and the avoidance of vendor lock-in continues to be high on the Kiwi priority list.

“Businesses are requiring elastic platforms that provide a flexible foundation from day one,” Murphy adds. “They are against vendor lock-in and as partners, we are now working back from those requirements to deliver solutions to customers.

“By starting big and working back, businesses can flexibility operate because they don’t know what the future looks like.”

Echoing Murphy’s comments, and in addressing the issue from a distribution perspective, Sam Taylor - Vendor Business Manager, Westcon says the jury is out on whether the entire channel is taking a similar lead, but accepts that innovation within storage is happening at a New Zealand level.

“It absolutely depends on the partners to be honest,” adds Taylor, who works closely with Kiwi storage resellers up and down the country.

“Some partners have been pushed by their customers which is common but those who are doing incredibly well in the storage space are those who understand that it’s all about business outcomes.

“It’s about choosing what workloads go where, whether on-premise or cloud and building strategies and business models to take to customers.”

Sam Taylor - Vendor Business Manager, Westcon
Sam Taylor - Vendor Business Manager, Westcon

In examining the state of play at a national level, Taylor sees a lot of investigation into Shadow IT, and who the new decision maker within the enterprise.

“It focuses around the whole unit of who is the decision maker and what is now becoming the business unit instead,” he adds.

“There is a real fear about what is out there, what don’t we know about where our data is sitting and can we wrap security around it?”

Consequently, Taylor says IT is changing to become the enabler and set the policy rather than the decision.

“That’s fine and we are okay with that,” he adds, “but there are the guidelines you must adhere to.

“There’ll always be partners who deal at a lower cost but the ones who are succeeding are the ones that know their customers.

“They know where the market is heading and they are able to have that conversation with the customer around this is what you’re trying to accomplish and here’s what we suggest and here is where we see the market going.

“It’s not just about solving the problem now, but it’s also about setting that customer up for the future.”

Again alluding to the bigger picture, with the storage scene in New Zealand now set, the key question remains - How can the channel rise to the enterprise challenge?

For the second part of the Reseller News Roundtable - check back to Reseller News next week for how channel partners can drive the storage conversation, react to industry trends and create opportunity in the Information Age.