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If you think Dell EMC will condense any of its overlapping storage products at Dell EMC World 2017, think again.
There has been a great amount of speculation about which storage arrays might be dropped since Dell said it would pay more than $60 billion to acquire EMC in late 2015. The merger created overlap throughout Dell EMC's combined traditional storage products, especially in midrange arrays.
Michael Dell spent a lot of time in the run-up to closing the deal assuring Dell's Compellent customers their platform would survive the merger. That will remain true through next week, when the vendor makes a crush of product releases at Dell EMC World 2017, which begins May 8.
Dell EMC is looking to pivot toward newer technologies such as flash, hyper-converged and cloud as sales of traditional disk-based arrays slip. Even with all this change, Dell EMC will hold on to its major array platforms. The traditional array families such as EMC VMAX, Unity and Dell SC (formerly Compellent) will survive but are considerably flashier. In many cases, they are flash-only, as is Dell EMC XtremIO, which has never been a hard disk drive system.
During an analyst day last month, Dell EMC president David Goulden said the vendor will eventually merge midrange arrays but will proceed at a slow pace. For now, the Unity platform from EMC and Compellent SC platform from Dell will continue.
"There will be a combined midrange family, but we don't have to rush into that because we have two very important families," Goulden said of the Unity and SC platforms. "We have been making moves to pull the storage portfolio together."
The vendor will instead focus on integrating flash throughout its storage lines at Dell EMC World 2017 and beyond. Its recent decision to discontinue its DSSD high-end NVM Express-based shared storage box was a step in that direction. Instead of selling a DSSD product that appealed to a limited customer base, Dell EMC will incorporate that technology into other products.
David Gouldenpresident, Dell EMC
"We're making that a feature of storage products rather than its own thing," Goulden said at analyst day. "We're focusing high-end storage products according to where their respective strengths are, as opposed to a broad overlap.
"You'll see us announce a lot of new storage capabilities at Dell EMC World," Goulden continued. "We recognize the storage market is in consolidation mode and the market is basically flat, but there are some great pockets of growth. There are a lot of things happening in the storage business. We're seeing hypergrowth in all-flash, we're seeing hypergrowth in converged infrastructure and we're seeing declines in traditional markets."
Dell EMC has the technology pieces for this changing world. It has more all-flash array platforms than any of its competitors. Its Vblock converged infrastructure (CI) partnership with Cisco still is the market leader in CI revenue, although the emphasis may shift to using Dell servers instead of Cisco in converged packages. Dell sells VMware vSAN software that powers hyper-convergence and Dell EMC VxRail vSAN-based hyper-converged appliances. It also has a raft of cloud technologies.
Dell World 2017 focuses on changing world
But changing from a traditional data storage vendor to a modern one can be difficult for a company the size of the new Dell EMC parent company, Dell Technologies. Arun Taneja, president and consulting analyst of the Taneja Group, said Dell EMC is unlikely to find smooth sailing through its transition.
"It won't be pain-free for them," Taneja said. "These intermediate periods can be disruptive."
Taneja said declines in traditional storage revenue experienced by all major vendors show the need to switch to newer technologies. But the new products based on software and commodity hardware bring lower margins than legacy storage arrays. That will help buyers more than sellers.
"New technologies are not making up for the shortfall, and the shortfall is dramatic," Taneja said. "Traditional storage sales are dropping like a rock, and these other new technologies are clearly the future. But they're way more cost-effective (for buyers). You can't do gouging with these technologies. If it's software-defined, people buy their own hardware. Even if you sell them the hardware, it's standard hardware. VMAX and VNX arrays used to be proprietary hardware. You could charge whatever you wanted to charge. Now, you have a 1U or 2U Dell server node, (and) everybody knows what that's worth. You can't charge nine times the cost for that."
Dell EMC's Goulden pointed out that traditional storage systems make up about two-thirds of storage revenue today, but the equation is shifting rapidly to the newer technologies.
"Our world and the customer's world are changing drastically ... that's changed forever," he said.
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