Isilon Systems Inc. is unveiling bigger and less expensive clustered NAS systems to help it compete with larger vendors making a push into clustered storage.
Isilon has qualified 1 TB drives, resulting in a set of two new nodes that boost its capacity to 256 TB in a standard rack. The IQ12000 node contains processors, to offer performance, while the EX12000 is a storage extension node that offers capacity. Each contains 12 Hitachi Data Systems (HDS) 1 TB SATA-II disk drives, providing 12 TB of capacity in each 2U node.
Isilon's Wall Street woes
The capacity increase and price decrease come as Isilon experiences growing pains as a public company. After a string of disappointing quarters following its December 2006 IPO, chief technology officer and founder Sujal Patel replaced Steve Goldman as CEO last month. Isilon's earnings report from last quarter is on hold while it conducts a review of the timing and treatment of revenue recognition from certain sales.
With the financial problems and disappointing quarters, Isilon has been held up as an example of what can happen if a company turns public too early. It certainly hasn't helped that Network Appliance Inc. (NetApp) and EMC Corp. have started to take clustered NAS more seriously.
NetApp has been keenly aware of Isilon's presence in the market. There has been talk that NetApp has lowered prices to win deals from Isilon. NetApp executives spoke of special pricing bundles during their earnings conference call last week but did not mention specific products. NetApp competes against Isilon with its OnTap GX clustered software sold mostly to high-performance computing customers.
According to Brett Goodwin, Isilon's vice president of marketing and business development, Isilon has run up against NetApp's OnTap GX clustered storage system five times this year, and Goodwin claims Isilon won four of those deals. Goodwin said there have been instances when NetApp has dropped its prices to try to push Isilon out, which he termed a "typical incumbent reaction, a short-term type of tactic." He added, " We've been telling NetApp customers they should all try to get the 'Isilon deal' while it lasts."
With EMC preparing to offer a clustered NAS system next year, financial analysts have identified Isilon as particularly vulnerable to the current market conditions. But Data Mobility Group analyst Robin Harris said the outlook for Isilon is better from a technology standpoint. "There's no doubt in my mind clustered storage is going to heat up in the next year," he said. "They've been having tough sledding with Wall Street, but in terms of their product, they're well-positioned." Harris predicted EMC's entry will validate the market, but that Isilon will continue to win deals by charging less.
One new Isilon customer, a systems architect at a major entertainment company who asked not to be named because his company's purchase of Isilon's products has not been formally announced, said he has a two-node 24 TB configuration running in production alongside 250 TB capacity from another vendor. The company sought out Isilon after its current vendor, which he also asked not be named because he has been a public customer reference for it, was unable to add storage on the fly.
"We have a large investment with this other company, and we're happy with them otherwise, but their product is very expensive and there's no way to add storage flexibly, and there's no way to scale performance along with storage," the user said. The entertainment company also realized that Isilon's system was cheaper --and, the user noted, "We're not spending $10,000 or $20,000 , we're spending hundreds of thousands."
However, price alone wasn't enough to clinch the deal. The systems architect said he didn't think earlier versions of Isilon's product were ready for prime time. "We heard mixed stories from references on different issues relating to earlier claims they made about the performance of their file system, and we were leery of putting it into production here," he said.
But he was happy with his own test results. "I pounded a 256-node cluster nonstop for two solid weeks," he said. "I added nodes and took them offline in the middle of running processes, and it didn't fail once. If the [two-node production] cluster holds up for a year with no problems, we will start phasing out the other solution."
The user said he had one quibble with Isilon's product: the cost of software, which must be added along with each node. "With our other vendor we only had to buy the software once," he said. "There are some features we could have gotten with Isilon that we decided to leave out because the cost wasn't worth it."