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Bumpy ride predicted as HPE storage absorbs Nimble SANs

Merging the Nimble Storage product line with HPE gear and engineering teams creates overlap and competition for its R&D budget. Other storage startups see an opening.

Executives at storage startups predict a bumpy road ahead for the Hewlett Packard Enterprise storage portfolio as it makes room for hybrid SAN vendor Nimble Storage.

The foremost challenge is winnowing product overlap between Nimble's predictive flash arrays and its own midrange HPE storage, said Kieran Harty, CTO at competing hybrid and flash vendor Tintri, based in Mountain View, Calif.

HPE's flagship storage product is the 3PAR StoreServe arrays that range from entry-level to high-end enterprise use cases. HPE also sells MSA hybrid arrays, StoreEasy NAS and StoreVirtual hybrid arrays to small and midsize data centers.

Nimble sells its Adaptive Flash hybrid and Predictive All Flash AF-Series arrays mostly to midmarket customers. HPE last week said it would pay $1.2 billion for Nimble, and the vendor expects to close the deal in April.

"There is a huge overlap in the combined product line. HPE 3PAR started at the high end and pushed down [with array models] in the $20,000 price range," Harty said. "Nimble Storage goes from the very low end to fairly high end. I think the product positioning is going to be messy and quite confusing for customers."

There also could be confusion as HPE storage teams compete with their Nimble counterparts for priority in the research and development and engineering budgets. As the flagship platform, 3PAR is expected to take precedence.

"It's always hard for engineering teams to give up their baby, but somebody has to give up something for HPE to rationalize the product line," Harty said.

HPE could use Nimble to phase out StoreVirtual -- formerly LeftHand Networks' technology -- and return 3PAR to the high-end enterprise market, said Rob Commins, vice president of product marketing at hybrid array vendor Tegile Inc., based in Newark, Calif.

"The 3PAR software has really strong federated data protection and replication that Nimble Storage does not have. This gives HPE an opportunity to have a big-iron play to go against [Dell EMC] VMAX," Commins said.

The Nimble deal comes a month after HPE completed the buyout of hyper-convergence vendor SimpliVity. Mohit Aron, founder and CEO of converged secondary storage vendor Cohesity Inc., based in Santa Clara, Calif., said the line between hyper-convergence and SAN arrays is blurring. Aron also founded hyper-converged pioneer Nutanix, which was SimpliVity's chief rival.

"With both Nimble and SimpliVity, HPE now has the technology components to strengthen its hyper-converged offerings -- albeit for primary workloads -- across small to large enterprises," Aron said.

But HPE has a spotty history of handling cultural integration, said Mike Grandinetti, chief marketing and corporate strategy officer at Reduxio Systems, based in South San Francisco, Calif. And now, it is trying to integrate two storage vendors simultaneously.

"The fact they're trying to digest not one, but two storage companies in such a short period doesn't bode well for a vendor that already struggles to integrate its acquisitions," Grandinetti said.

Late to market twice, will Nimble disappear inside HPE storage?

By acquiring Nimble Storage, HPE hopes to reverse several years of declining storage sales. Like other networked storage vendors, HPE is seeing reduced demand for storage hardware as companies adopt hybrid clouds and web-based storage services.

Nimble Storage goes from the very low end to fairly high end. I think the product positioning is going to be messy and quite confusing for customers.
Kieran HartyCTO, Tintri

HPE will try to use Nimble's cloud-based InfoSight analytics monitoring to improve its entire storage platform by integrating it with other HPE storage arrays. HPE's enthusiasm for InfoSight can be taken as a sign it is looking for data management as much as a storage platform.

That is how Bipul Sinha sees it. Sinha is CEO of data protection and management startup Rubrik, based in Palo Alto, Calif.

"Nimble's rise and subsequent acquisition by HPE ... signals that storage is fast losing its strategic value in the minds of buyers. In this fast-changing climate, customers value data management far more than they value infrastructure," Sinha said.

Nimble was a public company, but its long-term survival as an independent company was threated because it never turned a profitable quarter. Nimble started out selling iSCSI arrays in 2008, but was late to the market with Fibre Channel support and all-flash models it needed to land larger customers.

"Nimble was constantly chasing something that was a little bit out of reach. It's very hard to recover if you miss twice," Harty said.

Ash Ashutosh, CEO at Actifio Inc., based in Waltham, Mass., said Nimble blundered by focusing on the low end of the market. Ashutosh served as Hewlett Packard's chief technologist after selling his previous startup, AppIQ, to HP in 2005, before founding copy data management pioneer Actifio.

Ashutosh said Nimble launched hardware when the "commoditization of storage had just begun," with proprietary arrays gradually yielding ground to scale-out hybrid flash systems based on standard servers and software-defined storage.

"Nimble came out by serving the lower end of the storage market. But unless you're a massive consolidator, you cannot build a sustainable business based on being the lowest-cost provider," Ashutosh said.

Does consolidation mean more opportunity for startups?

Adding Nimble to the HPE storage portfolio could create new sales for remaining independent startup vendors, Tegile's Commins said.

"There is a significant portion of the channel that's not enamored of doing business with HPE. It takes about a week to get a proper configuration quoted for 3PAR. We independents can turn a quote in an hour. The channel loves that," Commins said.

Reduxio's Grandinetti agreed, noting that potential Nimble customers may be rethinking their purchase in light of the HPE news. "It clears a path for us to acquire customers that were in Nimble's pipeline," he said. "We were beating Nimble in deals anyway, but this just makes it easier."

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