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Ever Shifting Landscape of the Financial Side of IT Infrastructure

Level 13

For a year that started out so very slowly in terms of “The Big Exit,” 2016 has become so compelling.

There have been very few infrastructural IPO’s this year, but there have been some interesting acquisitions, and some truly significant changes in corporate structures. I will highlight a few, and maybe even posit an opinion or two.

The Hyper-Converged market is growing steadily, with new players on a practically daily basis. Nutanix, who has stated from an early position that their exit would be one of Initial Public Offering, has pulled back on their timeframe a couple of times recently. They are consistently viewed as the big dog on the Hyper-Converged Infrastructure. With strong numbers, a loyal fanbase, and a team of salespeople, engineers, and SE’s who’ve at times rabidly promoted their offerings, they come by the stature in this space quite rightly. These statements are not, from me, about the quality, comparison, or reflections on any of the competitors in this growing space. It does seem that the only thing really holding back this company from their desired exit is one of the marketplace shying away from IPO’s, and that if they’d wanted to become an acquisition target, that quite possibly, their brand could have become a part of some other organization’s product line.

The massive companies in the space are not immune to these kinds of changes either. For example, after Dell decided to go private, and made that a reality, they then set their sights toward acquiring the largest storage vendor in the world. After what I’m sure have been long and arduous conversations, much negotiation, and quite a bit of oversight from the financial world, they’ve now made the acquisition of EMC a reality. While we will likely not see the full fallout of which companies stay in the newly created DellEMC, and which get sold off in order to make up some of the costs of the acquisition. The new company will be the largest technology company in the world and comprise so many different services offerings, storage offerings, converged architectures, etc. It’s a truly stunning acquisition, which will theoretically alter the landscape of the industry in profound ways. The future remains uncertain regarding Compellent, EqualLogic, Isilon, ExtremeIO, VNx, and Vmax, to name a few storage only brands, Dell Professional Services, Virtustream, and even VMware can be potentially be spun off. Although, I do suspect that VMware will remain a company doing business as it always has, a free spirit remaining a part of the architectural ecosystem, and beholden to none. VCE itself, could change drastically, as we really don’t know how this will affect the Cisco UCS/NEXUS line.

I recently wrote a posting on the huge and earth shattering changes taking place at HPe as well. Under the guidance of Meg Whitman, HP has now split itself into two distinct companies. Consumer division (Hewlett Packard) comprised of desktops, laptops, and printing as well as other well-known HP brands on one side, while Servers, enterprise storage, and Aruba Networking etc. become part of the other side (Hewlett Packard Enterprise). The transition, first launched at HP Discover 2015, has gone quite smoothly. Channel relationships have, if anything grown stronger. From this man’s perspective, I am impressed. Now, the recent announcement that Enterprise Software will be sold off to MicroFocus, the brand that used to market a version of Cobol, a global presence, will now be the owner of these major software releases. For my money, the operations should be just fine. I don’t really see how it’ll change things. Certainly some of our contacts will change, but as to how smoothly this newest change will transition is left to be seen.

Pure Storage, the last big IPO to transpire in the enterprise infrastructure space, has gone, for the most part very well. These folks seem to have a great vision of where they want to head. They’ve successfully built a second storage platform, essentially on the sly (FlashBlade), meanwhile their numbers have been on the whole, quite good. I’m so interested to see where things go with Pure. I do feel that they’ll handle their future with aplomb, continue to grow their market share, and create new products with an eye to gaps, and customer requirements. Their Professional services group, as well as their marketing have been standout performers within the industry. I do find it interesting, though, that they have been turning the world orange and converting customers away from legacy storage brands to new platform approach, while taking the needs of their customers even in use-cases that hadn’t necessarily been core to their approach gracefully, aggressively, and competently.

Finally, I’ll mention another key acquisition. NetApp, one of those stalwart legacy storage companies, at one time a great alternative to other monolithic storage vendors had gotten stale. By their admission, the reliance they had on an older architecture truly needed a shot in the arm. Well, they achieved this by purchasing SolidFire. SolidFire, a very tightly focused storage player in the All Flash Array market, was accomplishing some truly high-end numbers for a startup, going into datacenters, and service providers and replacing far larger players meanwhile solving problems that in many cases had existed for years, or creating solutions for brand new Cloud related issues. A truly impressive feat for such a lean startup. They’ve proven to be just the key that fit the lock. I’m very interested to see how smoothly this acquisition will go moving forward. I wonder how well that startup mentality will fuse with the attitudes of a much slower moving culture, as NetApp had become. Will attrition force the rockstar development team to slow down, focusing on integration, or will they be allowed to continue along the path they’d cut over the previous few years, run as a separate entity amongst the rest of NetApp? I am curious as to whether some of the great SolidFire people will leave once the dust settles, or if it’s to their benefit to grow within this larger entity. The truth will prove itself.

The current crop of candidates looking to go public all seem to revolve around the Software related cloud business model, companies like Twilio, Blue Apron, and Casper Mattresses appear to be the kind of contender that are poised to transform. They seem to focus on software as their model. From a real IT perspective, I’ve heard Basho mentioned, (A brand new platform for distributed Database), Code42 (the creators of Crash Plan), DropBox (the ubiquitous cloud file share/storage location), and xMatters (A leader in the IOT landscape) as potential candidates for public offering.

As to mergers and acquisitions, there does seem to be a better taste toward companies like Acacia (in Optical Networking), Pandora (the streaming media company), Zynga (video games like Farmville), and a couple of semiconductor firms: Macom and SunEdison.

Updates after writing and before posting: On Tuesday September 20, Nutanix filed (Again) for an IPO, setting the Initial public offering at 209Million based on a corporate valuation at approximately 1.8Billion. Filing paperwork here. And, the VMware vRealize Management Suite, as yet another fallout from the DellEMC deal, has been sold off to Skyview Capital. I’m fairly confident that we’ll be seeing more and more changes in this shifting landscape in the very near future.

We are living in a time of change in tech business. What or who is next for companies like those I’ve highlighted? Who will come up with the next ground breaking tech? And, who’s next to set the world on fire with their huge business news?

13 Comments
MVP
MVP

From personal experience...

So far the HP/HPE thing is working at least for us, so far.

At least one of the companies likes to spam and not honor opt-out requests as well as cease and desist notices...and they are going for an IPO (again) ?  

Another has political/social practices that will prevent me from being a customer.

Level 13

I'm glad to hear your experience w/ HPe is good thus far. For us as well.

I wish that we could get the email policies to comply, spam can get so irritating, and the truth is, it can give us the buyers/recommenders a sour taste in making those decisions.

I've had good service and not-so-good service.  Hoping all goes better in the future, but my experience has been running into excellent people in good moods who really know their product line, to working with others who are the opposite.

Hardware! Hardware! Hardware! Cloud! Cloud! Cloud! SDN! SDN! SDN! Hyper-Converged! Hyper-Converged!

The buzz and the marketing will dot heir best to present the service existing above the infrastructure, but the reality is the same now as it was when I first entered IT, "Make it go More! Make it go Faster!" New companies, new technologies, huge IPO's... there's still a future in ole' infrastructure.

Level 13

Is there an article on the vmware sell off? I can't seem to find anything

Level 21

As far as Pure is concerned, we use their products and they have been a great company to work with.  I like how they have stepped up to the plate and not been afraid to challenge the more traditional way of thinking when it came to storage.  I certainly look forward to seeing them grow and I certainly hope they continue to be thought leaders in the industry.

NetApp on the other hand has had challenges in changing they way that they think.  While I think SolidFire was a great company with a great product, I am not so sure that NetApp's acquisition of them will help pull NetApp into the current agent and stop their legacy way of thinking about storage.  SolidFire is not the first Flash based storage systems/companies NetApp has purchased, I think their biggest challenge is their own culture which can't be fixed with technology.  I give the SoildFire acquisition a 50/50 chance on pulling NetApp out of their legacy ways.

All in all, I certainly agree it couldn't be a more exciting time in tech!

Somehow, as I read the topic again, I got the yawns.  Am I the only one jaded enough to think that the folks who call the shots in the multi-billion-dollar ranges are going to do whatever they want to increase their holdings (a.k.a.: "power") and I'll end up supporting whatever they choose to make available?  Somehow the big news has become less "news" and more of the same status quo.

No rschroeder​ , you're not. I've read this article 25 times in my 25 years of IT. Each year the technology changes. Each year we have to be flexible or we'll be left behind. Each year... blah! blah! blah! IT = Change! Everything changes, all of the time. This time is no better or worse than any other time before.

Level 13

The post was, in no way, either in favor or against any of the tech listed. Just about the business side. It's so difficult to transition a company from startup/private holding/VC backed to public. There's movement afoot though, and myhope is that things continue to move rather than stagnate as they have for almost two years, particularly in the infrastructure space.

Agreed mbleib​ and forgive me for not prefacing my comments for not clarifying that they are not directed at you.

My statement is aimed at the point that I've heard the same sentiment for X amount of years now. New technology, new disciplines, be flexible, those who don't adapt get left behind, "Go Faster! Go More!", and others. This all comprises the definition of IT.

Level 13

Certainly "more, faster, with less" has been a mantra of the industry for as long as we've been here and likely much longer. Thanks unlikel to change any time soon. As we move toward greater elegance in tech, we must remain adaptable.

Level 13

Thanks!

About the Author
Hi, I'm Matt Leib. I'm an old dude, with years on the customer side, years on the vendor side, and now, years on the channel side. Exist as a Pre-Sales Solutions Architect in the channel space. I specialize in virtualization, orchestration, storage and cloud. On my personal blog, I talk about anything from baseball and music to most technical things I enjoy including personal and enterprise tech. For the last few years, I've been a Tech Field Day delegate, and a blogger on Thwack's Geek Speak as well as a personal blog site at http://Virtuallytiedtomydesktop.wordpress.com . Always learning, growing (though sometimes, that's the waistline) and striving to be as good as I can. I also like to sing, play guitar, and am a rabid Cubs and Blackhawks fan. I live in Evanston, IL, a suburb of Chicago, also grew up here. I work for Connection Enterprise Solutions, in a strategic solutions role, speaking to C Level on Corporate IT Initiatives