The chief threat to the storage vendors is Amazon and Google. They are building massive storage service business and they do not buy their gear from the Storage vendors. They cable together their own storage farms from commodity disks and servers. The storage vendors do not make a dime.
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On the surface, this may be true. But if you understand what the storage vendors are actually doing – at least the ones that will survive – the landscape is very different.
For disclosure purposes, I am a NetApp employee (for a long, long time actually), so take that fully into account here. I will avoid speaking specifically about NTAP or its competitors’ offerings except where it is super-relevant to your statement above.
Flash storage has changed the landscape for everyone. Western Digital, Seagate were the largest HDD manufacturers, and they’re not doing as well. They sold drives to the major storage vendors (EMC, NTAP, Dell, NMBL, PSTG, etc.)… until they couldn’t. The small startup vendors that came out with flash-based point products have done ok… until they didn’t. See NMBL and PSTG stock price for confirmation. Point products are fine until your need for features/flexibility outgrow the glossy brochure or raw speed of just having flash storage in-house.
The larger storage vendors – NTAP, EMC, IBM, and to some extent, HPE still – all bought disks from WD, Seagate, Hitachi, etc… until the cost/GB for flash became attainable. Some of those vendors, including my employer, did a great job incorporating flash into their products, and some didn’t.
Two or three years ago, those companies that looked (or are looking) at flash only as the “next thing we have to be offering” were probably already doomed. Cloud-based storage offerings began being more compelling, and interweb speeds fast enough to make cloud storage actually usable for the masses. So those companies that embraced the cloud, or a “hybrid cloud” offering were probably on the right path.
Storage vendors that have cloud or hybrid-cloud offerings are absolutely making money – and quite a lot of it. The vast majority of users that opt for cloud storage still need to keep some things in-house, and it makes a boatload of business sense to be able to manage all of that storage together – for efficiency, cost, employee training and many other reasons.
Again, I have some built-in bias, so take that into account…
IBM, in my opinion, is a dead shell of a company. Might continue to dole out big dividends, but they’re eating their own and not innovating much in terms of storage, so you can mostly ignore them in this realm.
The EMC/Dell merger finalizes next week, and there’s so much FUD from that, that all the other storage vendors will benefit for awhile as customers run to safer territory. And the new Dell will suffer from talent drain as they go private and have to tighten the belt even further, so mid-term there’s even some viability concern for R&D.
Nimble is a point player. If you want fast iSCSI only, great. But they’ve never made a profit, and the market has evaluated the stock price accordingly.
Pure Storage is also a point player. Probably IPO’d too early, and won’t be able to show enough to keep the price up.
NetApp is one of the few storage vendors that looked past just offering fast, local storage when it was sexy. While the stock price floundered, the recent jump seems to have correctly accounted for the “ok, you do know what you’re doing in this changing landscape” factor. No guarantees, and no insider info here, just my $.02, but having the most widely-deployed file system in the world available for use in-house, on fast flash arrays, in the cloud, or on ALL of those simultaneously, is a pretty compelling argument to me as a shareholder, and customers – the ones writing the checks – seem to agree.
