This week, EMC is knocking on doors to tell the world that it is raising the bar in the storage-on-demand market with a new offering called OpenScale. Is the market-leading storage company on the verge of delivering a unique product or service, or is it simply grabbing the spotlight until an EMC competitor returns fire? While EMC's enthusiasm for the announcement leads me to believe it's the former, enterprise storage players Hewlett-Packard and Sun claim that it's the latter.
OpenScale, according to EMC CTO Mark Lewis, represents a significant enhancement to EMC's current storage utility offering, which has been available since 1999. At the very least, it may be a boon to EMC's existing storage-on-demand customers.
Like other utility offerings in the industry, a storage utility treats storage as though it were electricity delivered on demand. In the case of OpenScale, EMC is the equivalent of the power company and, like electricity, the available storage capacity scales with the demand and the customer pays on a monthly basis for only the storage consumed.
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When customers satisfy their storage needs through EMC's OpenScale program, the storage is kept on premises close to the systems that need it. As Lewis said in my interview with him earlier this month, EMC doesn't deliver storage as a utility over the Internet because the company believes that the Internet introduces too much latency into performance-bound applications. In the case of OpenScale, even with the storage on the customer's premises, EMC is responsible for ensuring that the storage runs as reliably as a utility, while the customer is responsible for the information management strategy (how the storage gets used). All of EMC's offerings have a phone-home capability that allows EMC to remotely diagnose the health of a storage system and deliver a fix over the Internet or by dispatching a technician to the affected site.
What does OpenScale represent that's different from EMC's previous utility-based offerings? According to Lewis, the company has written billing software that completely removes the human component from the billing process. OpenScale sweeps through all of a customer's EMC-based utility-offered storage systems and aggregates the billing information into one monthly bill. Although other factors, such as storage switch port allocation, contribute to the pricing, the primary pricing vector of EMC's storage-on-demand is capacity usage.
Lewis noted two important benefits to automating the utility billing process. First, managers can get up-to-the-minute information on storage usage across the entire storage infrastructure, including drilling down to see how storage usage is allocated to business units or other entities. More importantly, removal of the human component means that EMC can deliver the utility less expensively, driving the total cost of storage down, and allowing the utility to scale up to meet the customer's capacity needs using automation rather than manual labor. I'm avoiding the phrase "total cost of ownership (TCO)" since, with the utility model, the infrastructure isn't owned.
With utility computing in vogue, it's only fitting that a leading storage provider would be doing everything possible to keep its offerings on the cutting edge. But is it enough? Neither HP nor Sun (both of whom have utility offerings) thinks so.
Bud Broomhead, Sun's new business ventures and network storage senior director, counters that OpenScale doesn't represent an advancement in storage of any sort. "Sun has been offering utility-based computing since 1997," says Broomhead. "Going to any number of places to gather storage statistics and scrape logs to put together one bill doesn't require a lot of heavy lifting. We use the collection feature of NetConnect to aggregate that data and the rest of the software that puts together the bill is in-house stuff."
Likewise, Nick van der Zweep, HP's director of utility computing, says HP has offered automated billing for its utility offerings (including storage) for some time. In fact, van der Zweep offers some of his own updates regarding pricing for HP's storage-on-demand offerings. "HP's usage-based storage pricing now follows the way we do usage-based pricing for servers. Suppose you could lease a server for $1,000 per month. With our usage-based pricing for servers, your bill might be anywhere from $500 to $1,100. That scared customers because they thought they could end up paying more than what it would cost for a monthly lease. So, we capped it at the lease amount, and now we've done the same for storage. It made sense for pay-per-use storage to follow computers because with servers, the amount of CPU capacity can fluctuate greatly. Whereas before, when, once you stored something, that was it. But now, with people running Web sites and databases on a 24/7 basis, the database can't be shut down in order to be backed up. So, instead, they're making a point-in-time copy in the storage device, which temporarily causes the storage usage to spike. Then, when you back that copy up and release it, the spike goes away. Storage usage is not as volatile as computer cycles, but it is volatile; for customers like these, metered storage makes a lot of sense."
Note that van der Zweep mentioned making servers available as a utility as well. Beyond the automated billing, which all three companies claim to do, both Sun and HP make CPU bandwidth available in the utility pricing model as well. Both companies argue that just about any company interested in consuming storage on a pay-per-use basis would probably be interested in acquiring CPU bandwidth that way as well. Not surprisingly, both companies offer "bundled" utilities consisting of both CPU and storage, which they argue is a more useful offering.
Bill Mooze, Sun's utility computing senior director, says this type of bundled offering enables customers to view the infrastructure as a shared pool of resources. In an almost grid-like fashion, different departments' utilization of the utility can ebb and flow as their demand for CPU, storage, or both, goes up or down.
"Equally important," say Sun's Broomhead, "is the business model." Like EMC's Lewis, Broomhead claims that going the utility route allows companies to better match infrastructure costs to business objectives. But, according to Broomhead, the true test is whether the business model of the utility provider reflects that kind of thinking. "Instead of billing based on capacity or CPU utilization, we put it in terms that business managers understand. If you're an insurance company, your business isn't measured on how much storage or CPU an insurance claim consumes. It's measured on how many claims are successfully processed. To reflect that, Sun will bill its utility offering on a per-transaction basis such as number of claims."
I have to admit, if I'm a business manager, there's a certain attraction to making IT a direct cost of goods sold instead of an overhead item that is doled out based on fuzzy math.
How do you tell which pricing model-transaction-based or capacity-based -- will mean lower costs for your company? There are no guarantees that transaction-based pricing is more economical, but it's easier for the accountants because IT shifts from an overhead cost to a direct cost. Sun and HP negotiate the rate on a per-customer basis.
In addition to a model that closely mirrors that of EMC's capacity-based pricing, HP offers transaction-based pricing for its utility offering, also known as Utility Data Center (UDC). HP's van der Zweep says, "We charge by the transaction as well. So, we might charge for the number of SAP transactions someone has." Describing the transaction-based plan's flexibility, van der Zweep said: "It can encompass servers, storage, software, or any combination thereof. Since transactions are very specific to each customer, we look at the hardware needed to support a customer environment and the types and volumes of transactions we can support and then propose a cost model for that customer. We also have other chargeback models for UDC. For example, we have a standard offering for Microsoft Exchange called Exchange on Demand. For that, we charge by the number of mailboxes."
Despite HP and Sun's contention that EMC's OpenScale storage scaling (and subsequent billing) is not unique, EMC's director of open software marketing Pat Cassidy cautions that you have to read the fine print and that there are subtle and potentially significant differences among the various offerings. "We're pretty sure that no one else has a completely automated network storage billing solution in place," he says.
Also buried fine print, claims Cassidy, is what happens when the capacity requirement reaches a certain threshold where more infrastructure-- such as a storage attached network (SAN) switch-- has to be installed. "With most offerings," says Cassidy, "when you reach that threshold, the provider has to bring in all sorts of people and the pricing gets renegotiated. With EMC, there are thresholds where more equipment has to go on site, but the process is significantly more transparent. With other offerings, if you want the ability to scale beyond a certain threshold without human intervention [on the customer side], you'll have to make a commitment up front to the provider."
HP's van der Zweep admits that there are two ways to acquire capacity on demand from HP. In one way, similar to what Cassidy describes and part of HP's Utility Data Center plan, the customer must negotiate a storage-on-demand contract with a fixed maximum of storage and only gets charged for what is actually used. "You elect the peak capacity," says van der Zweep "and then, yes, you have to come back and work with us if you're going to exceed that capacity. However, in that situation, we don't manage the storage for you. You manage it for yourself. It's just pay-per-usage (PPU) storage and for that, we charge strictly on a capacity basis. But, if you want something like what you've described from EMC, where EMC manages the storage and the scaling process is completely transparent to the customer, we offer that from our managed services organization instead."
Van der Zweep notes that, like EMC, HP offers robust billing and reporting across all of a customer's utility-like services. Citing BMW as an example, van der Zweep says, "BMW has something like 50 different devices in their datacenter for all of their storage, and we run and manage it like a utility and the reporting and billing aggregates all of it." In terms of having to renegotiate a contract after certain infrastructure-improvement thresholds are required, van der Zweep says: "Our prices go down as you consume more. So, if the storage needs start to escalate dramatically, we wouldn't go back for a renegotiation of the contract but the customer might come back and to see if he can get a better deal."
Likewise, Sun's Broomhead describes a couple of Sun alternatives for going with utility-based storage that were virtually identical to the what HP offers. "Sun can offer utility-based storage in a variety of ways and one of those ways is through Sun's Professional Services (SUN PS) organization" says Broomhead. "You can order up a frame [i.e., a storage rack] that's not very populated with disks and call for them as you need them. If you want to self-manage it, you can have a deal like that. If you want us to use NetConnect to monitor it and have us bring more disk in as you need it, we can do that through SUN PS. In a situation like that, there's total transparency to the customer."
Finally, a primary sticking point that both HP and Sun raised is: Who's responsible should the system fail to work? "From what I can tell from the EMC announcement," says Sun's Broomhead, "this is only available directly from EMC." HP's van der Zweep draws the same conclusion, saying that the new offering puts EMC in competition with its partners. Indeed, our news story quotes Tony Marzulli, EMC's vice president of open software marketing, as saying that "EMC's utility plan will not include outsourced storage, in which customers leave storage operations to another company." EMC's Cassidy confirms that, right now, OpenScale is only available through EMC, but that they are working closely with a potential, unnamed partner.
In contrast, both van der Zweep and Broomhead say HP's and Sun's utility programs offer ways for consultancies and business partners to either offer the utility themselves, or get involved in the deal. In HP's case, HP is the utility provider, but the company has a standard pricing sheet for offerings like Exchange-on-Demand that HP's business partners can resell. Sun's Broomhead says the company offers all the technology necessary for a SunTone certified partner to host the utility themselves. While Sun PS could be the utility provider and people can come direct to Sun, "virtually all of our utility business has been through partners," Broomhead says.
I was told by two of the three companies to be careful about comparing apples and oranges. This invariably was a reference to completely outsourced storage vs. other storage-on-demand offerings. EMC doesn't consider what it does to be outsourcing-- even though the storage belongs to EMC, and the company is responsible for monitoring the storage system's vital signs and ensuring that scaling, reporting, and billing are completely transparent to the storage-on-demand customer. While OpenScale could be a great step for EMC and its customers, it sounds a lot like outsourcing to me, and customers should be comparing it to other storage-on-demand offerings from other companies-- regardless of how the required transparency is delivered. In the end, you have a problem that needs to be solved and you get what you pay for. The cost --- and your confidence that the solution provider can fulfill their promise --- is what counts most.
What makes more sense to you? Consuming your utility by capacity or CPU utilization or by the transaction? What are your personal experiences with utility providers and their promises? Does it matter to you solution providers deliver on-demand computing or just that they can do it? Share your thoughts with your fellow readers using ZDNet's TalkBack. Or write to me at email@example.com. If you're looking for my commentaries on other IT topics, check the archives.