cloud service providers: opportunity or threat?

Cloud Service Providers – Opportunity or Threat?Suresh Vasudevan – CEO, Nimble Storage February 2013

Are Cloud Service Providers a Threat?

Nimble Storage is a vendor of enterprise storage systems Enterprises are moving from on-premises IT to third-party

providers of infrastructure – to “the cloud” So lately we’ve been hearing questions like:

“Are cloud service providers a threat to your business, or an opportunity?”

2© 2013 Nimble Storage.

We Believe:

The opportunity is larger than the threat 1. Deployments by cloud service providers are one of the fastest

growing segments of our business 2. Given their significant storage and performance requirements,

these are some of our largest customers 3. We’re at the very early stages of leveraging this opportunity

Why? Different kinds of service providers Centralized shared infrastructure requires rethinking traditional

approaches

3© 2013 Nimble Storage

Different Kinds of Service Providers

Each segment has different requirements:– Consumer SaaS providers– Enterprise SaaS providers– Modern hosting companies


Consumer SaaS Providers

Aggregate consumer-spend into centralized shared enterprise infrastructure

Consumer applications that consumed end user equipment (PCs, PC applications, etc.) moving to the cloud – triggering a need for Enterprise infrastructure

Some service providers build their own infrastructure (e.g., gmail), others leverage product manufacturers

– Example: Yahoo Mail


Enterprise SaaS Providers

Aggregate SMB requirements into centralized shared enterprise infrastructure

Key customer segment – small businesses that would otherwise never invest in enterprise IT infrastructure

SaaS companies end up aggregating SMB spend into centralized shared enterprise infrastructure

Some build it on their own, most deploy best-of-breed infrastructure from product manufacturers

– Examples: ServiceNOW, Salesforce


Modern Hosting Companies

Aggregate SMB spend into centralized shared enterprise infrastructure

Traditional hosting companies thrived on renting real estate, power and cooling

Now they’re renting hypervisors (and the associated servers, networking, storage and other infrastructure) or renting virtual desktops, or renting DR infrastructure

– Examples: Virtacore, Desktone


Rethinking Traditional Approaches

Cloud delivered IT solutions and applications create an opportunity With regard to storage infrastructure, some of the dimensions that

matter more are: Efficiency Flexibility in scaling Rapid recoverability Dramatic simplicity Integrated security Multi-tenancy


Efficiency

For end customers, making IT efficient is important as a way to manage costs for the Enterprise

For service providers, on the other hand, efficient IT infrastructure is the very essence of their business success

Lowering the cost of infrastructure allows them to price their services more competitively to gain market share and improve profitability


Flexibility in Scaling

The storage industry has traditionally deployed incremental storage performance and storage capacity in big “capital intensive” chunks at a time

What is needed is an approach that allows service providers to scale performance and capacity in small, low-cost increments

Thus making IT equipment costs more variable and aligned with revenues

Perhaps, an even more critical requirement is to avoid fork-lift upgrades of hardware and to be able to perform “rolling hardware upgrades” that are non-disruptive


Rapid Recoverability

Service providers operate against stringent SLAs (Service Level Agreements)

The notion of nightly backups and backup windows is simply not good enough

What is needed is the ability to provide hundreds of recovery points and rapid recovery from any such point for applications


Dramatic Simplicity

Service providers must manage the administrative cost of operating large-scale multi-tenant data centers

Most rely on extensive in-house automation that requires extensive APIs, deep integration with hypervisor vendors

Traditional support model (hierarchical organization of level-1, level-2 and escalation engineers) will not suffice

Vendors need sophisticated remote monitoring tools that recognize problems as they occur, and tools that allow for rapid problem diagnosis and problem resolution


Integrated Security

Gaining the trust of Enterprises through robust security becomes a foundation for persuading them to move their data and applications to a third party

This requires a much deeper investment in integrated security (as opposed to security as a separate layer) on the part of product manufacturers, even if they are not building security products


Multi-Tenancy

Always focused on optimizing efficiency Must be able to share infrastructure across multiple

users while simultaneously maintaining good quality of service

Only way to drive superior economics


Conclusions

Rapid increase in the number of deployments of Nimble Storage arrays by service providers

The key drivers:– Unparalleled efficiency in simultaneously lowering the cost of

capacity and cost of performance– Ability to scale in low-cost increments and scale

non-disruptively– Superior data recoverability– Simplicity and remote support automation
