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Taneja Blog / Data Center Systems

IBM Back in the Growth Game with Cleversafe Acquisition

On October 5, 2015, IBM announced the acquisition of Cleversafe, a provider of object-based storage software. IBM intends to continue to make Cleversafe’s product available both in the form of software and appliances, much as they are they are today from Cleversafe. However, in addition to that IBM has already integrated Cleversafe’s dsNet software into SoftLayer whereby a customer can purchase dedicated object storage, similar to the way they purchase Swift-based object offering today. Over time, IBM intends to also make multi-tenant public cloud offering based on Cleversafe software available via SoftLayer. No timetable was provided for this.

At Taneja Group we have been concerned about IBM’s decline in storage revenues over the past 15+ quarters. But some of the more recent actions give us hope that IBM is fighting hard to get back into the game. Fundamental changes are taking place in the computing market, in general, and storage in particular, as the industry moves toward a software defined world. This is affecting all legacy players, not just IBM. For IBM the reconstruction work started a few years back when it acquired Texas Memory Systems, who was a pioneer in the all-flash storage market before the term “all-flash" even existed. That acquisition has yielded a strong product offering in the form of FlashSystem 900 and FlashSystem v9000. These products have been revenue saviors and continue to gain market share in a fast growing market. SoftLayer acquisition was another feather in IBM’s cap, as it gave them a basis to deliver cloud offerings, both public and dedicated and stemmed the flow of workloads to AWS, Google and Microsoft Azure. It also became a strong point of differentiation relative to EMC who has had no such offering. 

We put Cleversafe acquisition in the category of “brilliant”. Why? One, given the incredible volume and velocity of unstructured data and the inability of traditional storage architectures to deal with them, we believe any storage company worth its salt needs to own a strong object storage technology. Two, not all object storage technology is alike, even though on the surface they all say the same things. Cleversafe pioneered the concept of object storage—they practically commercialized erasure coding single handedly, for heaven’s sake—and they are by far the market share leader (granted, in this somewhat nascent market). Yes, IBM has an implementation of Swift in their SoftLayer offering but that is not going to give it a point of differentiation in the market—Cleversafe’s dsNet will. Three, ultimately the world of computing is going hybrid and this offering gives IBM the foundation to offer on-premise, dedicated cloud and public cloud incarnations of this product. Over time, we are convinced IBM will be able to move workloads easily between these platforms, exactly what the customer wants to do, albeit with total security. Exactly what Cleversafe technology brings to the table. Four, while an object interface is available on the Spectrum product line today, the underlying storage is still block-based, with all the plusses and misuses that implies. We could add a few more reasons this acquisition makes sense but we will stop here. Enough to say it just makes sense. 

We believe IBM storage revenue is close to bottoming out and we expect to start seeing a turnaround soon. Maybe there is still a quarter or two of bloodletting, as the old architectures and strategies fade away, and the new ones kick in. But the signs look positive, based on the most recent product moves. To be sure, we still see some gaps—hyperconverged products and a stronger NAS play, for instance—but these can’t be far behind, given the latest momentum shown by the company. SVC continues to be a gem and we saw it as such over a decade ago. It is already the basis for the most popular Spectrum offerings  in their product line and we are confident that technology will find its way in even more places within and outside IBM. 

In a nutshell, if this acquisition is a sign, IBM is back in business!


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