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Decloaking hidden and missing segments in the analysis of market opportunities for enterprise rackmount flash

by Zsolt Kerekes, editor - - May 28, 2014
One of the challenges for the enterprise SSD market when designing new rackmount products is to understand complex customer needs and decision criteria - which go beyond the traditional bullet points.

New segmentation models are needed because the enterprise SSD market is moving into uncharted territories and use cases where a considerable proportion of the customer needs which affect buying behavior are still formally unrecognized as being significant (in market research data).

Additionally - inside user organizations there are many internal preference factors which are rarely articulated as being "SSD technology related needs" because they are considered to be intuitively obvious by users who expect that their special needs should already be known or inferable by competent SSD vendors who want to sell to them.

In most markets these vendor knowledge gaps would be fed back up the marketing intelligence chain by a direct sales force.

But these market adaptation and correction processes can take years to deliver effective results.

And just as "day zero" malware can remain undetected by anti-virus software so too can "year zero" patterns of mismatched enterprise SSD customer needs fail to be recognized by SSD vendors who simply move on their attentions to easier / less problematic customers or resort to the tactic of reducing their selling prices.

The result is that too many factors at play in enterprise SSD market behavior still don't appear as explicit assumptions in SSD product marketing plans.

Another contributory cause for gaps in segmental understanding has been the continuing pace of disruptive innovation in enterprise SSD-land - which has meant there hasn't been a stable market template for vendors to follow from one seemingly chaotic year to the next as they encroach on new markets.

Smaller nuances of user behavior (which are easier to discern as patterns in a stable market) easily get lost under the noise created by headline technology changes and the market's apparent willingness to slaughter and discard once loved past industry leaders.

Whatever the root causes - the result of these "hidden segments" is that nearly all new enterprise SSD hardware products fail to achieve to achieve more than a small fraction of the business potential imagined by their creators and investors. Simply because they fail to satisfy these alternative (customer-based) views of viable SSD adoption reality.

This new article will attempt to outline some key segmentational factors in the rackmount SSD market which appear to have been mostly overlooked, underrated or neglected for extraction as explicit segments - and which I think deserve more attention, analysis and action by the SSD industry to create a more efficient market which works better for all stakeholders.

the segment multiplication factor of software

As little as 5 years ago (in 2009) the enterprise SSD software market barely existed.

Since that time it has grown in complexity, aspirations and strategic significance. To the degree where in an earlier article I said - "The winners in SSD software could be as important for infrastructure as Microsoft was for PCs, or Oracle was for databases, or Google was for search."

But the rush to fill many different perceived market vacuums (different in architecture, different in roadmap assumptions and different in analysis of the core problems to be solved) has been a confusing mess - which will look more tangled in the next few years rather than simpler.

As a result - the segment multiplying factors related to SSD software go way beyond such simplistic questions as:-
  • what's the OS, or
  • what are the main apps which the SSD will work with?
There was a hint of the shape of things in my 2010 article - a new way of looking at the Enterprise SSD market - in which I pointed out the simplifying advantages of dividing all enterprise SSDs into 2 parts:- Legacy and New Dynasty.

And that's a convenient place to start when looking for possible SSD software segmentation categories.

But if you thought that x2 would be an adequate segment multiplier - then think again.

In the diversity of products we see today there are already many subsegments within each of these 2 top layers.

Let's look at Legacy software

It sounds simple enough. The SSD software which enables a given SSD to work in a world which was originally designed for hard drives. This happened in waves over a 10 year period.

pre 2007
  • fit into the system by looking like an enterprise hard drive (or rack) - but one which runs a lot faster.
2007 onwards
  • As array vendors adopt MLC instead of SLC - endurance become a problem. Do something in the software to mitigate endurance and report status.
2009 onwards
  • make it easier to fit into the system by automatically finding data hot spots and caching them.
  • make it easier to fit into the system by tiering as well as caching (and adapting to customer's preferred virtualization schemes).
  • add rudimentary high availability support to any of the above - when lack of HA looks like it might slow down sales.
  • add management and efficiency features to satisfy customers who are using a lot of the products which you introduced before.
the present day

Even having all the features above isn't a good enough feature set any more.

Some apps and some combinations of environments are much more popular in the market than others. These favored legacy apps - are getting revisited by newer generations of SSD software - which use their knowledge of the legacy apps to do SSD specific improvements.

And the legacy apps are acquiring SSD intelligence too.

Can we still call them legacy apps? (VDI, database etc)

Yes. But there are different degrees of conformance to what was being done before SSDs and how they work, and how far the SSD software can reach and the consequences of changes.

Not all users will be comfortable with switching on all the new features. Because it's a way they can be suckered out from what they regarded as "safe" platform choices with known legacy suppliers - and drift towards new dependencies and a lock-in with the new suppliers.

Let's look at New Dynasty software

It sounds simple enough. New Dynasty is a software environment and architecture which is planned at the outset to operate with SSDs.

But there are many ways of doing this even if you start out with the idea of only looking at standard servers and standard SSDs. Because adding SSD software into the mix brings its own multiplication factors.

What does a server node look like?

How is it clustered or scaled?

Is the server node part of the storage?

Is the server node a building block for all the storage?

Where should the storage live?

How should it be tiered?

And BTW - we're now more than willing to tier memory too.

There are lots of different architectures being offered under the disguise of SSD software or "software defined storage".

And what about switching costs?

The SSD software market has been running long enough now for some vendors to have become an established platform in some types of application silos.

The biggest of these should be regarded as segments too - because you're not easily going to replace them with a generic something else.

Legacy interacting with New Dynasty

I'm just throwing this in as a reminder that in many organizations - users will be using more than one kind of SSD architecture at the same time to tactically solve different problems.

That in itself can lead to new customer needs, and new product types - for example emulating entire legacy SAN environments within a new dynasty SDS array...

the segment multiplication factor of - customer experience and confidence with SSDs

Here's a simple fact.

If a user has been deploying SSDs in their datacenter for 5 to 10 years already - then they will have a different set of ideas about product feature preferences and vendor profile preferences to another user who is looking at SSDs for the first time - or who has less experience and less confidence about SSDs.

That's even if both users are in the same user segment - such as publishing, broadcast, health services, industrial component manufacturing.

But longevity and familiarity also segment in many different ways too.

An extreme case is dark matter enterprise users - such as web entities, and cloud infrastructure providers. These are not going to buy the same kinds of SSDs as the banks, pharma companies etc

The dark matter users don't want to pay for your wraparound software bundles. They're probably got their own favored apps, and they also have their own flash APIs too. You'll have to modify your SSDs to sell to them. Are they worth it?

If a single such customer has the ability to buy a million SSDs or 10,000 AFA / SDS racks - then they're already bigger - as a market opportunity - than many of the other segments which product marketers traditionally place in their spreadsheets. So I would argue yes.

Because even if you choose not to supply them with your products - then the consequences of the products they do buy - and the vendors they do buy from - may come back and compete with you in other markets.

the segment multiplication factor of RAS

Let's look at a 1U SSD. It's got good capacity, and good speeds.

Vendor X - offers this SSD as a lightly populated base unit. The user can add capacity by plugging in 2.5" modules. If anything fails - the module can be replaced.

Vendor X's ideal customer is the small user who is new to SSDs. He regards the cost of module as high enough already.

Vendor Y - offers his 1U rackmount a sealed unit. When it fails you replace the whole thing.

Vendor Y's ideal customer needs hundreds or thousands of these SSD racks. Ideally at the lowest cost possible.

The product offerings from these 2 vendors will be accompanied by entirely different assumptions about the fault tolerance architecture and serviceability and upgrade procedures.

They're extreme cases. But actually there are many different opportunities to segment RAS at each end of the user spectrum and between these hard limits too.

Why should a customer pay for a flexible module upgrade option they don't need?

Why should a customer pay for your version of RAID inside the box, or your version of cloning boxes - when they have another way of doing it? (Which for them is cheaper or better - because it's in their own control?

Features which are regarded as good by vendor X are bad for vendor Y's market - because they simply add to the cost.

the segment multiplication factor of design stability

In my article - playing the enterprise SSD box riddle game - I parodied how frustrating the user experience can be - when it comes to anticipating successive product generations and feature sets of rackmount SSDs - even when narrowing the scope down to being a single supplier.

Marketers in the enterprise flash array market like to believe that when they introduce new features into successive product generations these will be regarded as having some value by potential customers. But that's not always true.

In fact the opposite can be the case - particularly when the customers are integrators and systems builders in the embedded industrial markets.

Just as having a stable BOM to reduce the cost of requalification and redesign is a desirable service offering for drive level industrial SSDs - so too can having a stable - no frills design - for industrial systems users too.

Having an absolute minimum of integrated software can be seen as a good thing - by industrial users - because they don't want to get involved in supporting software features which they don't use, and they don't want version related features in successive products to negatively impact performance or other interactions.

One vendor I spoke to summed it up neatly.

Charles Tsai at Innodisk said - when talking about his company's FlexiArray (a 1U rackmount SSD for embedded markets) - "The customer really just wants a faster SSD with more capacity."

They're buying a rack - because they can't get the features they want in a single SSD drive or module. But for this kind of customer the rack is simply viewed as a component.

When the same customer comes back next month, next year or in several years - they want to be assured that the new rack will behave in the same way. It may have more capacity, or be faster, or be cheaper - but the new models must work with exactly the same software as the first model - and it mustn't introduce any new software support factors (or power supply costs either).

more segment multipliers - for rackmount SSD?

No doubt there are more which some of you know about, and there are some more which I may add later.

This article started in response to some conversations I had with readers when I realized I hadn't written much about it.

The bottom line is this.

Experienced marketers - who have been involved in the enterprise and mission critical rackmount SSD markets for a long time - are regularly discovering from customer anecdotes that there are many segments for SSD arrays which are not satisfied by standard enterprise market models.

In fact many of the missing market segments, use cases and product classifications don't even have standardized names.

There are many factors behind these missing segments. But the most important cause is that users understand enough about what SSDs could do for them to recognize that they need a different type of SSD solution to economically satisfy their needs - compared to the generic "enterprise SSD" which is offered by most vendors.

On the downside - vendors who fail to be sensitive to the growing divergence of focused SSD needs in the enterprise will find business conditions increasingly difficult due to the mismatch between the wide span of genuine customer needs compared to the limited scope of their own product solution offerings.

On the upside - traditional market models for rackmount SSDs - extrapolated from the pre SSD era - understate the potential for the SSD array market - both in terms of applications and revenue.
Here are some earlier articles on related enterprise flash array architecture and market models:-
  • could enterprise SSDs become a $10 Billion Market? - (2003) - This was a revelatory market size estimate which extrapolated from existing technical concepts and gave many SSD company founders the confidence to imagine a much bigger future for their market.
  • this way to the petabyte SSD (2010) - This visionary article for the 2016-19 timeframe enumerated a new user value proposition (along with associated technologies and new product types) which it claimed would enable solid state storage to move into a new role of displacing hard drives from datacenter arrays - despite lower HDD prices.

    SSD company founders later told me that a key part of the analysis which affected their thinking wasn't the flash technology assumptions (some of which were too pessimistic) but my market boundary analysis assumption that the transition to all solid state arrays would happen even if hard drive costs shrank to zero dollars.
  • Market Trends in the Rackmount SSD Market - (2009) - analysis included recognition that different users would sustainably support markedly different designs and implementations of SSD racks for identical applications - due to users having differing interpretations, tolerance and needs related to SSD technology and differing user perceptions of SSD market risk factors
  • what do I need to know about any new rackmount SSD? - (2012) - a plea to vendors to signpost their marketing communications about new products more effectively so that readers didn't have to waste so much time filtering themselves in or out of follow up reading.
  • an introduction to enterprise SSD silos - (2012) - 7 ways to classify where all SSDs will fit in the pure SSD datacenter by form and function. This is a top level architecture and applications usage based segmentation model.
  • The big market impact of SSD dark matter - (2012) - This article provided a narrative for vendors to think about better ways of communicating with a new type of customer segment which was had been emerging in the lead up to publication - SSD superusers - many of which are the biggest and most technically savvy users of SSDs worldwide.

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On a particularly bad SSD data day you may be inclined to ask yourself:-
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    Is it time to update my profile on linkedin?
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AccelStor NeoSapphire  all-flash array
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InfiniBand or 10GbE iSCSI
NeoSapphire series - from AccelStor

"At the technology level, the systems we are building through continued evolution are not advancing fast enough to keep up with new workloads and use cases. The reality is that the machines we have today were architected 5 years ago, and ML/DL/AI uses in business are just coming to light, so the industry missed a need."
From the blog - Envisioning Memory Centric Architecture by Robert Hormuth, VP/Fellow and Server CTO - Dell EMC (January 26, 2017)

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re - Decloaking hidden segments in the enterprise for rackmount SSDs

comments from Woody Hutsell, IBM (July 2014)

As usual, your post is very insightful and in a few words captures much of the market inflection points. I also liked your brief history.

Here is some of how I analyze this market from what I think is a customer centric point of view:

1. Is the customer or the architecture server centric or storage network centric?

Is reliability driven by the application through scale-out or by high reliability shared storage.

Some shared storage devices play in both spaces, but rarely do DAS/PCI devices play in the shared storage space.

2. Does the customer prefer storage services in the server/application layer or in the storage layer?

This could be driven by vendor lock-in concerns, service costs, performance or reliability.

3. Is the application/customer latency sensitive, IOPS sensitive or bandwidth sensitive?

4. Is the customer more performance sensitive, cost sensitive or risk sensitive?

Anyway, mesh all this together and you realize as you accurately conclude, that one product will not meet all requirements and that a full product line needs to hit different feature points.

Looking back on the past 15 years or so of the enterprise SSD market you could say that SSD marketers had it easy.

As long as each new product was faster, denser, cheaper and more reliable than the one before - and came attached with the right interfaces - their job was mostly done - because that satisfied the needs of the market.
what do enterprise SSD users want?

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This is disruptive market where what happens next doesn't follow on the smooth curve trajectory of what happened before.
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why's the plot so complicated in enterprise SSD?

In the modern era of SSDs - the customer has received their education about what an SSD is - and what it can do - from many sources.

So when they talk to a vendor - the customer says - don't tell me about SSDs.

Tell me instead how you fit into my idea of the SSDs I'm looking for - and why I should buy from you - instead of all these others.
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Value and Differentiation - Janet Downes Downes Strategic Marketing

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I often say to enterprise SSD marketers - it's easy to create a list of the top 10 oems or user sites which already use SSDs - but no one's got more than a small fraction of the list of future SSD user heavyweights - because they don't exist yet - or if they do - they're in stealth mode. They can see us - however.
The big market impact of SSD dark matter

One of the most potentially rewarding market challenges which SSD companies are grappling with right now is - how to make enterprise solid state storage attractive to users who aren't worried about their hard drive performance and don't even think they need SSDs.
better thinking inside the box

"In the past, enterprise hardware has had a pretty hands-off relationship with the vendor that sells it and the development team that builds it once its been sold. The result is that systems evolve slowly, and must be built for the general case, with little understanding of the actual workloads that run on them."
Andy Warfield , cofounder and CTO - Coho Data - in his blog - Facebook as a file system - a web scale case study (October 9, 2014)

the problem of being perceived as a "new" supplier in an old suppliers' market is something I discussed with Skyera's founder in 2013
scary Skyera