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24Aug/12Off

3PAR: Helping and Hurting HP ?

Here I go, another blog post starting with question. Yet another post sparking speculation on my part due to an article by our friends at The Register who were kind enough to do some number crunching of HP's latest quarterly numbers were storage revenues were down about 5%.

Apparently a big chunk of the downward slide for revenues was declines in EVA and tape, offset to some degree by 3PAR and StoreOnce de-dupe products.

I suppose this thought could apply to both scenarios, but I'll focus on the disk end, since I have no background on StoreOnce.

Before HP acquired 3PAR, obviously EVA was a juicy target to go after to replace EVAs with 3PARs. The pitch was certainly you can get a hell of a lot more done on less 3PAR than you can with more EVA. So you'll end up saving money. I've never used EVA before myself, heard some good aspects of it and some really bad aspects of it, I don't think I'd ever want to use EVA regardless.

I am sure that 3PAR reps (those that haven't left anyways - I've heard from numerous sources they outclass their HP counterparts by leagues and leagues), who are now responsible for pitching HP's entire portfolio obvious have a strong existing bias towards 3PAR and away from the other HP products. They try to keep a balanced viewpoint but I'm sure that's hard to do, especially after they've been spending so much time telling the world how much these other products are bad and why the customer should use 3PAR instead. Can't blame them, its a tough switch to make.

So, assuming you can get a hell of a lot more done on a smaller/fewer 3PAR system(s) than EVA  - which I think is totally true, (with some caveat as to what sort of discounts some may be able to score on EVA, 3PAR has traditionally had some strict margin rules where they have no problem walking away from a deal if the margin is too low), add to that the general bias of at least part of the sales force, as well as HP's general promotion that 3PAR is the future, and you can quite possibly get lower overall revenue while the customers are saving money by having to buy fewer array resources to accomplish the same (or more) tasks.

3PAR revenue was up more than 60% apparently, on top of the previous gains made since the acquisition.

It would be very interesting to me to see how much consolidation some of these deals end up being - traditionally NetApp I think has been the easiest target for 3PAR, I've seen some absolutely massive consolidation done in the past with those products, it was almost comical in some cases. I bet EVA is similar.

Now the downside to the lower revenues, and I've seen this at both Dell and HP - both companies are feeling tremendous pressure to try to outperform, they haven't been able to do it on the revenue side, so they've been squeezing on internal costs, which really can degrade services. Overall quality of the sales forces at the likes of HP and Dell have traditionally been terrible, compared to the smaller company counterparts (at least in storage). Add to that the internal politics and region limitations that the companies place on their sales forces further complicates and frustrates the quality people internally as well as customers externally. Myself I was unable to get anything out of a local HP/3PAR account team for months in the Bay Area, so I reached out to my friends in Seattle and they turned some stuff around for me in a matter of hours no questions asked, and they didn't get any credit (from HP) for it either. Really sad situation for both sides.

I don't have much hope that HP will be willing or able to retain the top quality 3PAR folks at least on the sales side over the medium term, they, like Dell seem focused on driving down costs rather than keeping quality high, which is a double edged sword. The back end folks will probably stick around for longer, given that 3PAR is one of the crown jewels in HP's enterprise portfolio.

For some reason I'm immediately reminded of this quote from Office Space:

[..] "that is not right, Michael. For five years now, you've worked your ass  off at Initech, hoping for a promotion or some kind of profit sharing  or something. Five years of your mid-20s now, gone. And you're gonna go  in tomorrow and they're gonna throw you out into the street. You know  why? So Bill Lumbergh's stock will go up a quarter of a point."

 

One of 3PAR's weak points has been at the low end of the market, say sub $100k deals, is a space 3PAR has never tried to compete in.  Apparently according to The Register the HP P4000/Lefthand side of things is not doing so hot, and also seemed to be HP's go-to product for this price range. This product range is what HP used to be excited about, before 3PAR, I attended a storage briefing at a VMware User group meeting just before HP bought 3PAR, expecting some sort of broad storage overview, but it was entirely Lefthand focused. While Lefthand has some interesting tech (the network RAID is pretty neat), for the most part I'd rather pay more and use 3PAR obviously.

I wonder what will happen to Lefthand in the future, will the best of it's tech get rolled up into 3PAR? or vise versa? Or maybe it will just stay where it's at, the one good thing Lefthand has is the VSA, it's not as complete as I'd like to see it, but it's one of the very few VSAs out there.

Dell has been busy trying to integrate their various storage acquisitions whether it's Compellent, Ocarnia, Exanet, and I think there was one or two more that I don't remember. Storage revenues there down as well. I'm not sure how much of the decline has to do with Dell terminating the EMC reselling stuff at this point, but it seems like a likely contributor to the declines in their case.

TechOps Guy: Nate

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  1. I’ve felt that since the aquisition HP is only interested in selling the 3par to the large enterprises. Small companies like the ones that I have worked at aren’t getting the pricing discounts we used too and are forced to look elsewhere. We’ve looked at Nimble and some of the other players out there, but I really like 3par as I know it works, I wish they would fix the pricing issues and retarget the Small – Medium size enterprises like they used too.

  2. Yeah that certainly has been a problem, I know shortly after they acquired 3PAR they had specific price bands where each product line was going to market at. They wanted to preserve the low end Lefthand, and so far that hasn’t worked out well. The cost increases have been hard to take from a SMB side for sure, also I think bigger discounts are harder to come by given how so many companies are in the “channel”, my company for example has been relegated to a channel position – so I have no account team anymore (not that the team we had was remotely as effective as the teams I had in Seattle).

    I hope HP adopts a similar pricing model to Compellent when it comes to software licensing, they have a good model. The more I think about it at least now I really do think Compellent makes a really good platform as a slightly lower tier than 3PAR. As one guy up in Seattle used to tell me “Compellent is the poor man’s 3PAR”. (Seattle’s Compellent team didn’t like that but the bay area guys don’t care as long as you buy their stuff 🙂 ) I’m going to be meeting with Compellent again soon to get an updated road map. I priced out a configuration earlier this year and it was pretty good.

    If you haven’t taken a look at them check them out they have some neat stuff, my major complaint is they don’t support direct attach, while they do offer a large number of ports for connectivity. Oh, and their website sort of sucks. They are looking into when/if they will post SPC-1 results for me.

  3. iSCSI as a whole when it comes to the market as I see it appears to be lagging. The iSCSI market for the most part is where Dell has the advantage. The Equallogic arrays are frankly better then the Lefthand rigs. I see way more EQL in the field, especially in the SMB side of the house, where iSCSI is most dominant.

  4. Yeah I suspect your right – though it seems Nimble is ravaging Equallogic in that space at the moment, even with Dell’s latest auto tiering Equallogic I don’t think that product can stand up to Nimble over the medium term. I bet as a stand alone appliance Lefthand is dead, though I hope it will live on through the VSA, since that market seems to be one worth being in on the real small SMB. It’s certainly a niche they can exploit anyways.

    thanks for the comments Gabriel and Justin!!

  5. Equalogic is a pain to scale, I dislike the reliance on my 10gb network for inner device data tiering, etc. It just feels like they missed a major component.

    I saw a demo of the compellent stuff shortly after Dell acquired them, I found it interesting, but mostly copycat 3par, which was a huge trade up from when i saw them the first time 3 years prior and they were touting data IO SLA guarantees buy placing data bits on particular sectors of the platter… which I Felt was a huge waste of time. They didn’t highlight that as much in the demo, but in talking to the SE after the demo it is still a major feature of the device if you wish to have it.

    I’ll wait until Nate beats the crap out of a compellent device, before I jump with both feet on that platform. 🙂

  6. I think you are mistaken. I think it’s 3par copying Compellent. They’ve had data progression for a long time now.


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