One of my favorite storage events is the annual Flash Memory Summit in Santa Clara, CA. The 3+ day summit attracts design engineers, product managers and hands-on business executives who buy and sell flash memory components, solid state disks (SSD) and related tools. I’ve attended the summit for years and each year it gets bigger and the presentations get more professional — as does the market for products that rely on flash (think smart phones, tablets, cameras, computers and enterprise data centers).
I attended session after session for all 3 days with my enterprise storage product marketing hat on. I did not consider that odd until a (storage) industry colleague pointed out that my business (Marketingsage) is a PR and lead generation firm.
I mention that because, unlike the PR and lead gen. posts on this blog, this posting looks at the categories of enterprise flash-based products and touches on the high-level go-to-market strategies. The posting is also laden with acronyms that require some product knowledge (other PR people can find a dictionary on the SNIA web site . I’ve been marketing and selling storage related products for 20+ years (hard drives, virtualization, SaaS, SSD). If that’s not your thing you can stop here.
Component SSDs for Enterprise
Despite the poor economy, there’s a real market for both the server-side SSDs and SAN-based SSDs. The 2011 market is estimated to be worth $1-billion. Seagate has reportedly shipped 1-million hybrid flash-enhanced HDDs. Intel reportedly shipped 500,000 SSDs in a single quarter. Surveys estimate that 56% of enterprises either have an SSD or are currently evaluating them. Analysts estimate the market unit CAGR is expected to be over 50% through 2015. Impressive numbers!
The big numbers refer to SATA, SAS and PCIe SSD that go into servers or are arrayed in storage systems, not necessarily to the storage systems themselves. They are mostly components of more complex solutions that deliver thousands of IOPS.
Form a marketing point of view these SSDs are sold in the same way we sold high-end HDDs when I was at Seagate and IBM. Everyone wants the OEM business. Those that miss an OEM design cycle will sell through distribution/resellers. It’s not quite so black and white yet because some notable Early Adopter end-users are purchasing directly from the SSD manufactures to build their own high performance servers, but it will get there in 5 years or so.
STEC and Fusion IO are the SSD firms that everyone is watching. However, Virident had its tachION PCIe card at the summit. LSI had its WarpDrive. Marvell also had a PCIe card, as did our friends at TMS. It seemed like almost everyone had 2.5-inch SATA or SAS drives, but Anobit had a 3.5-inch “enterprise” SSD.
Frankly, the SAS, SATA and PCIe devices are fast looking like commodities. However, as competitive as this market is getting I envy the marketers. I personally find product and channel marketing strategy to be the most mentally stimulating. The fact that it’s very hands-on, difficult and requires experience makes it enjoyable. Unfortunately most will fail because the typical OEM-dependent manufacturer is not “wired” to succeed in other channels.
Standalone Memory Array SSDs for Enterprise
At the high-end of the enterprise market are standalone SSDs that deliver millions of IOPS. These devices typically sit in the SAN. I heard an analyst estimate that some 70,000 units have gone to enterprise customers, but I can’t add context to that number.
Standalone SSD are increasingly popular alternatives to large racks of HDD-based RAID because flash prices continue to make them more economical. Nevertheless, these enterprise SSDs are a big-ticket purchase. As such they are currently bought by large enterprise, government and military organizations that have mission critical (usually Oracle) databases managing very high transaction volumes (think stock exchanges, telecom, etc.) and/or a very large number of simultaneous users (think Facebook, Google, etc.) SSDs are also becoming essential in virtualized data centers, including the growing number of cloud-based infrastructure providers.
Until recently, my firm (Marketingsage) spent the last 8 years helping Texas Memory Systems market these Fibre Channel and Infiniband SSDs.
Despite the SSD hype, the enterprise SSD system market is clearly still in the in Early Adopter phase where visionaries seek breakthrough advantage (speed) and require complete solutions (help with Oracle or VMware integration). Of course, Oracle (who bought Sun) has the advantage and is well positioned. However, I think SolidFire, WhipTail Tech, and Schooner Information Technology also get the need for an application-based approach. They target those providing Infrastructure as a Service (IaaS aka cloud) with significant know-how and feature rich SSDs.
When the mass market arrives, the risk-averse pragmatists and conservative customers will favor vendors with a recognizable brand, case studies and lots of certifications/endorsements. These customers will seek value products — good-enough speed, application specific features, assured interoperability and a competitive price. Of course, the mass market is global so a well established channel is required to hold real market share. Advantage Oracle, HP, Dell, IBM, EMC…the usual big gorillas.
From a marketing point of view the high-end enterprise market requires a well-oiled machine. Unlike the OEM sales model, there are tens of thousands of potential customers, not just a handful. These customers are application centric, not necessarily storage centric, so the marketing communications strategy is different and lead generation is critical. Additionally, the sales cycles are long and purchase decisions involve many people so a sophisticated nurturing system and lots of sales tools are required.
SSD Caches for Enterprise
With the high price of SSD in mind, there’s a renewed focus on hybrid or cache implementations. The concept of caching is not new and sales of older RAM centric cache appliances are (privately) reported by several vendors to be very weak. However, I believe the new breed of higher capacity flash cache implementations can carve out a distinct market segment.
The new cache systems are using automated tiering where “hot” files, hypervisors and volumes are served from fast SSD (or RAM) while lesser used files remain on cheaper HDD. The Pareto principal (80/20 rule) is assumed to apply, dramatically reducing the amount of expensive SSD required to deliver similar performance to an all SSD system.
GridIron Systems‘ TurboCharger is a promising high-end Fibre Channel appliance that sits in the SAN. It will compete in the standalone SSD market with all the same challenges and rewards (high margins) that come with solution sales.
At other end of the market is the $1000 class LSI MegaRAID controller card. This card uses off-the-shelf SATA/SAS SSDs and cache for standard HDDs. Of course, it’s a component product, but it has a nice retail-friendly box.
Micro Tiering Cache Software. This shiny new, not-quite-shipping, segment is very interesting because Linux or Windows installed driver software are used with SAS, SATA or PCIe SSDs and hard drives to automatically cache IOs. VeloBit, Nvelo, FlashSoft and Enmotus are now beta testing their software in real-world customer environments. Like the LSI hardware controller cache software prices start below $1,000.
As a marketer I can see several ways for these firms to succeed. The OEM component and system integrator strategies are a winner with so many commodity-like SATA, SAS and PCI SSD on the market. However, I was once director of marketing at a software firm that turned its driver software expertise into a valuable branded line of high-speed storage hardware products. That’s a completely different strategy focused on a brand. Anyone remember FWB’s Hammer storage line? Maybe not, but if you were a high-end Mac user in the mid 1990 you probably read the reviews.
Challenges Marketing Enterprise SSD
Once the product strategy is set, the day-to-day challenges are all about messaging and execution. Most prospective customers still think of SSDs in a generic way: they’re fast, but expensive. As they learn more they have to decide on what type of SSD implementation is best for their situation — server-side or SAN, cache or primary storage. They’ll have to weigh the pros and cons of MLC, eMLC or SLC. They’ll face the FUD of the performance specifications — are the performance claims reliable, sustainable and will they degrade with use? They’ll also take longevity in to account because SSDs wear out and under some conditions will even lose data.
Whatever the vendor’s position there are a lot of cases to be made, and countered. That means technically credible (not “fluffy”) sales tools like write papers, case studies, videos, sales presentations, websites, brochures, etc. More importantly, the value propositions need to be made to potential customers, not just the SSD pundits.
At the end of the day buyers will choose the vendors they believe they can trust. Those will include the brands they personally recognize from editorials, advertisements, trade shows, sales pitches (personal and email) and experience. They’ll also rely on recommendations — resellers, consultants, analysts and their peers on social media sites.
User references will trump hype with customer prospects, the press, analysts and investors. So if a marketer is to really contribute to a firm’s success he or she need to deliver a steady stream of sales-ready sales leads. With the multi-quarter sales cycles associated with enterprise SSDs, August leads are often next year’s sales.
Of course, Marketingsage can help!
About the Author
David X. Lamont is an accomplished marketer of IT products and a partner at Marketingsage, a PR and lead generation firm that specializes in marketing data storage, data management and enterprise software products. He can be reached by email at blog [at] marketingsage.net. Fellow marketers and IT professionals are invited to join his network on LinkedIn and to subscribe to this blog (see sidebar).