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'Utility Computing Begins with Storage'

At its annual Vision seminar in Las Vegas, the storage software major said it was putting all its bets on utility computing, and launched new products to back that up

Prasanto Kumar Roy

Tuesday, June 22, 2004

Lift your phone, and dial. Open up your tap, get water. Get billed end of the month for what you use. These utilities are part of our lives. Can computing be a utility? Systems vendors like HP have said Yes, for years. But we've seen little impact on the enterprise. For most CIOs, the only part of their computing environment that spells "utility" is the electricity it consumes, and which they're billed for at the end of the month.

Yet Veritas is such a strong believer that its entire vision and strategy is now focused on utility computing. Yes, that's Veritas, the storage software company from Mountain View, California. "Storage is a great place to start, to make the move to utility computing," said Jeremy Burton, Veritas CMO and Sr VP, kicking off the company's annual Vision seminar in Las Vegas on May 4.

So much so, that you don't even see "storage" in the description of Veritas today: "The leading provider of heterogeneous software to enable utility computing". And this utility computing is a different from the systems vendors' version.

A year ago, Veritas was simply the storage software leader. As it happens, it isn't, today. It's dropped to second place, with 22% of the global storage software market ($1.78 billion: IDC) in Oct-Dec 2003. The newly-merged EMC-Legato combine is at 32%; CA has 10%, and IBM and HP follow.

Veritas CEO Gary Bloom

The IT Dept is the Utility

Does the "utility computing" mean an external supplier offering services to the enterprise? Not quite, in Veritas' vision.
CEO Gary Bloom explains this vision: where the enterprise IT department offers IT resources as a service, with a clear SLA (service level agreement), to the business units of the enterprise. A measurable, rapidly scalable, even billable service. That is the utility, and the utility provider is the IT Department.
Storage is the closest thing to utility computing that exists in IT shops, according to Bloom. It's centrally purchased, centrally managed. Backup is a central process. So the fundamentals for utility computing "are already there". But Veritas' play goes beyond storage (see main story).

He outlines five steps to utility computing for the enterprise:
n	DISCOVER what you actually have (storage, other IT resources, how many people managing it)
n	CONSOLIDATE it.
n	STANDARDIZE on best of breed.
n	AUTOMATE (with policy-based dynamic sharing, and pooling of assets)
n	The UTILITY/SERVICE (offer your IT resources as a measured service to business users. Use consumption-based metering, etc)

But that's not the reason for the shift "beyond storage", CEO Gary Bloom told Dataquest. "We've been on an expanding path in going beyond storage for a number of years now, from clustering to provisioning and more...it's an expansion strategy," he said. "But we are not diverging or leaving behind storage. It's a great business to be in, and we're absolutely committed to storage...it's a key part of our business."

Veritas' present revenues are almost entirely from storage. Its forays "beyond" are small today, such as with its Ejasent acquisition. That's a California-based supplier of application virtualization technology for utility computing. Nor does it plan to span the spectrum of network management. Or even security, an area that analysts say is closely related to storage and utility computing. "We're not in the security business," Bloom said. "That's an established market with some players...we're not anxious to jump into it, not even with acquisition."

He told Dataquest that EMC was not getting much traction from the Legato acquisition. "They grew 7%, over four times slower than we did." He also added that EMC-Legato merger has changed the landscape another way. "It left a number of companies like HP, Sun and IBM without a dance partner," he said, implying that they now have only Veritas left as a third-party option.

Bloom said that Veritas is also "completely committed" to being a vendor of software that enables utility computing. "And storage is the starting point," he added.

Step Two: Utility Now
Veritas did outline its "utility" vision and strategy a year ago, at last year's seminar. This year, the tag line says: "Utility. Now". "We're delivering on that vision," Bloom said. "We've had a year of execution."

That "delivery" included the product announcements at the Vision Seminar in May, the additions to Veritas' CommandCentral family-version 4.0 of its Storage, Availability, and Service products. CommandCentral Service, for instance, is a software portal that "provides transparency into IT resource consumption, service levels and costs". Veritas has brought in new version to most of its products within the past year. The complete family of CommandCentral software products sell for US $64,000 upward; individual products are at $20,000 upward.

Support for heterogeneity was a key part of Veritas' pronounced strategy. In a commissioned survey, 98% of CIOs said heterogeneous environment support was essential. It reflected the reality of their IT assets, and also gave them the freedom to shop around, and more bargaining power.

Bloom also said that a number of partners have been getting "increasingly closer" to Veritas and its view of utility computing over the year. Among them are Network Appliance, and Sun Microsystems. CTOs and senior managers from these companies also spoke at the event on their vision of utility computing.

Some of these "partners" are also competitors. Veritas competes and cooperates with them. Said Bloom: "We'll compete and they'll win when a customer says, I want an HP environment and only HP utilities. We'll win when the customer says, I want a heterogeneous environment."

The "utility computing practice" is part of Veritas' new Global Services Division, headed by Greg Hughes, EVP, who came on board from McKinsey in October 2003. It integrated the former tech support and consulting and education organizations. It also includes the storage management, disaster recovery, and application performance management practices. The education activity, aimed at developing and maintaining Veritas-trained and certified professionals, includes classroom sessions (for instance, a four-day session for NetBackup admins) and the "Virtual Academy"-Web-based training.

Veritas has a development/support center in Pune, India, with over 500 engineers, and has plans to add 300 people this year.

Storage software is one of the hot, growing and profitable areas in the technology space. The market grew at a healthy $6.3 billion in 2003 (IDC), up 8%, driven partly by data centers and new regulation like the USA's Sarbanes-Oxley Act.

Veritas is the key global player in storage software, despite being pushed down to number two by the EMC-Legato merger. Veritas' Q1/2004 revenue was up 24 percent over last year to $487 million, and net profits doubled to $103 million. It has forecast 2004 revenues of $2 billion, and has a $12 billion market cap and a cash balance of $2.7 billion. Which it might use for acquisitions (such as its purchase of Ejasent, Inc, in January).

Clearly, there's exciting times ahead in the storage market in 2004.

Prasanto K Roy in Las Vegas

Qualcomm on Storage

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