Symantec's guzzled the Azure Kool-Aid, tells all its customers: Drink up!
Throw your storage vanities on the bonfire
Analysis Security software supplier Symantec is moving 105 Norton data centre applications to Microsoft's Azure cloud.
The apps include reputation scoring, security telemetry and advanced threat protection. It will bring its e-commerce system to Azure, which it plans to use for some internal IT services including containers, machine learning and platform-as-a-service. The moves should be complete by March 2018.
Core financial applications and other apps will remain in-house with Symantec adopting a hybrid-cloud strategy, saying it will save operating costs by moving to Azure as well as increasing performance and security.
This is a marquee win for Microsoft. Symantec beaming a significant proportion of its IT to the cloud means that it will no longer need the servers and storage running those apps.
Six of Symantec's 25 global data centres are set to close. This is bad news for Symantec's server and storage suppliers, as well as the suppliers of software that runs on the servers.
It is also bad news for server and storage suppliers in general because Symantec just told all their enterprise customers that moving applications to the public cloud is A Good Thing™. Some proportion of the world's enterprise customers will follow in Symantec's footsteps and migrate applications to the public cloud, shrinking their on-premises data centre estate.
As night follows day, server and storage sales will fall and the market will shrink. There will be a ripple effect.
There will be concomitant increases in server and storage sales to cloud providers, but as they tend to buy components with which to build their own systems, mainstream suppliers will probably not benefit.
Suppose some 20 per cent of the enterprise server and storage market goes away to the public cloud over the next few years; what impact will this have?
Both markets will contract and be less able to support the plethora of suppliers they do now. We would expect the dominant mainstream suppliers to become more (relatively) dominant with weaker players suffering, meaning they get acquired, become smaller survivable niche suppliers, or go to the wall.
In servers and the hyperconverged infrastructure appliance market we see HPE and Dell as the top two, with the collective white-box suppliers next (Inspur, SuperMicro, etc.) and a string of other suppliers; Huawei, Lenovo, Nutanix, Cisco, Fujitsu, Hitachi, Scale and so forth. We're deliberately lumping servers and HCIAs together here and would expect consolidation among the ranks of the smaller players.
In storage there are relatively more large players as industry consolidation hasn't played out as effectively as it has in servers. We would expect the pace of consolidation to increase though, as HCIAs (server SANs) take more of the storage market.
The large players include Dell, HPE, NetApp and IBM, followed by a whole string of smaller players such as Pure Storage, Vantara (old HDS), Kaminario, Tegile, Tintri, Huawei, Fujitsu, NEC, DDN, Infinidat, Oracle, Panasas, and the many startups; Apeiron, E8, Exceleto, Formation, Pavilion, Vexata and others.
Then there are the software storage suppliers (think Datacore, Nexenta, Scality, Cloudian and others), the backup/data protection folks, the metadata abstraction layer players, the copy managers and HSM-reinvented players, big data analysers, container data storage players and cloud gateway/replicators and archivers... and we might well think there are far, far too many suppliers here.
If the Symantec move to close a fifth of its data centres because of public cloud adoption becomes an enterprise IT norm then the consolidation pressure on the server and storage industry will ramp up. If that percentage rises then the consolidation pressure will be the greater.
A supplier's ability to navigate the shifting sands of server/storage development in the shrinking on-premises IT market will become paramount as navigational mishaps leave vendors stranded; let what happened to Violin Memory, Imation, Data Gravity and Coho Data be a warning of this.
But there are also lots of market niches that canny suppliers can dominate. It's a return to the rules of the old-school business game – get big, get niched or get out. Think Dell (get big), DDN (get niched) or Data Gravity/Coho (get out).
Symantec's move to Azure is writing on the data centre wall. Read it well. It could presage a bonfire of the storage vanities. ®
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