The long-anticipated launch this quarter of EMC Corporation's (NYSE:EMC) XtremIO has been met with the kind of enthusiasm that one saw during the Isilon rollout.
EMC expects XtremIO to be a leader in the all-flash array market, which IDC forecasts of $1.2 billion in revenue by 2015. The new array is in high demand already, with 10 Petabytes of effective deduplicated capacity already sold through EMC's Directed Availability program (announced in March 2013).
The platform enables a much stronger competitive response to the likes of Nimbus Data and Pure Storage in the Channel. It also opens up virtual desktop infrastructure (VDI) deals that were not having as much traction with the VNX-F array, which can reduce capacity requirements by 50 percent through data dedupe/compression, thus allowing EMC to hit key storage costs price points within a VDI deal.
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As EMC has commented, 70 percent of XtremIO deals are part of a VDI project while new markets and opportunities are similar to what Isilon enabled in scale-out NAS.
The initial feedback on the XtremIO rollout from EMC resellers has been positive as the new All Flash Array (AFA) is finding traction with new VDI-led projects.
Sterne Agee analyst Alex Kurtz says that the premium pricing of EMC on XtremIO performance may prevent wider cannibalization of VMAX. The channel seems enthused by the new platform for 2014 growth opportunities and responding to Pure and Violin Memory's (NYSE:VMEM) growth.
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The analyst added that EMC's pricing of XtremIO has little to do with price per GB (how Pure and Violin are approaching the market) and more to do with driving a performance and sustained IOPS discussion.
On a simple price per GB comparative basis, XtremIO is at least 3 times more expensive than a VMAX array. This creates two key dynamics which opens up! competition such as Pure/Nimbus to exploiting the price difference, and if EMC sales and Channel can bifurcate the products capabilities (VMAX has much broader redundancy services than XtremIO), then XtremIO should have a positive economic impact in the next 12-18 months for EMC's model as it expands TAM.
High pricing means that EMC can protect broader encroachment in big VMAX installations, which is an assumption for now till Violin and Pure's GTM model matures.
Further, EMC's is making inroads in All Flash Array (AFA) market, which could reach $1.7 billion by 2015, based on the assumption of 1 percent penetration for the AFA market in 2012 reaching 6 percent penetration by 2015. By 2015, Kurtz assumes about 10 percent of the high end market could have moved to AFA.
The key challenge for the incumbents in the market will be transitioning some workloads to AFA from a monolithic array. Differentiated products like VPLEX from EMC enable customers to more broadly deploy different Array platforms across locations, which would help EMC maintain order as AFA adoption increases.
The recent launch of XtremIO expands the company's reach into the Flash Array market where they have had limited reach thus far with the VNX-F product.
XtremIO should help accelerate EMC's penetration of VDI instances where start-ups have found early success. The details of the architecture suggest a similar framework to Isilon Systems with scale-out, linear performance (and thus a familiar selling motion for the sales force, channel).
EMC XtremIO features several unique flash innovations including a scale-out multi-controller architecture with linear scalability; deduplication that is always on, and always inline; data protection that is 6 times more efficient and 4 times faster than traditional RAID.
Customers are looking to all-flash arrays to support workloads that need predictable and consistent low-latency across datasets that frequently change – such as VDI, virtual servers, massively! consolid! ated databases and test/development environments.
With XtremIO, these workloads not only achieve better performance but also improved $/IOPS and greater administrative simplicity. Better customer satisfaction would improve sales.
In addition, XtremIO is integrated within the EMC ecosystem to provide additional capabilities, ease-of-use, and compatibility. A VCE Vblock Specialized System for Extreme Applications based on XtremIO all-flash arrays provides unparalleled VDI end-user computing performance at unprecedented cost per virtual desktop, which customers can begin ordering by the end of 2013.
XtremIO array management is also integrated with VMware vSphere and accelerated with VMware's VAAI storage APIs. In addition, XtremIO is supported with other EMC technologies including EMC VPLEX, EMC PowerPath and EMC Secure Remote Support (ESRS).
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