Scalent Acquisition Adds FBI to Dell's Software Portfolio

Transcription

1 Research Publication Date: 11 August 2010 ID Number: G Scalent Acquisition Adds FBI to Dell's Software Portfolio Donna Scott, Andrew Butler By acquiring Scalent, Dell is sending the message to competitors, partners and end users that it intends to compete more aggressively in the emerging fabric-based infrastructure (FBI) market. Scalent has created a software-based infrastructure built on computer, networking and storage components from multiple heterogeneous vendors. This differs from approaches that usually restrict some of the elements to their own technologies or those of close partners. Key Findings Although implemented differently, Scalent offers many of the fabric management and repurposing capabilities that compete with offerings from Cisco and HP, but with the ability to support a greater degree of heterogeneous hardware. In November 2009, Dell began to use an OEM model, with Scalent technology as the underpinning software for its Advanced Infrastructure Manager (AIM). Scalent's software is strategic to Dell's overall FBI solution called Virtual Integrated System (VIS). Prior to mid-2009, Scalent's go-to-market model was focused on a direct sales model. However, with the economic downturn (and its impact on the financial sector that had generated a significant portion of Scalent's revenue) it moved to an OEM sales model, selling through Dell and Unisys. Dell claims that VIS, its FBI solution, will continue to support heterogeneous hardware enabling customers to incrementally implement an FBI, rather than rip-and-replace the infrastructure to create an FBI. In the past, Dell has not invested in heterogeneous management. Recommendations Dell customers looking for a FBI solution that provides flexibility in hardware support should consider Dell/Scalent. Non-Dell/Scalent users should lock in support contracts now. Should Dell discontinue or miss its heterogeneous support commitments, evaluate alternatives. Prospects considering Egenera through Dell should view the Dell/Egenera relationship as tactical. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

2 Unisys uadapt customers should not see any changes affecting vendor relationships or ongoing support as Dell and Unisys have close working relationships. Publication Date: 11 August 2010/ID Number: G Page 2 of 6

3 WHAT YOU NEED TO KNOW Dell's acquisition of Scalent signals that it is stepping up its commitment to FBI. Previously, Dell has been slower to market than its competitors (HP and Cisco), and its strategy is still more immature. With Scalent, Dell is capable of competing with and differentiating from both HP's and Cisco's FBIs. It's main differentiation is that Scalent can be added onto a heterogeneous x86 server infrastructure (blades and racks), enabling server repurposing without requiring its own server infrastructure, as do HP and Cisco. Therefore, customers can get started with smaller implementations and grow them over time. Dell has stated that its customers want and expect such heterogeneity and that it is committed to continuing to provide it. Because most server vendors write software only for their own servers, customers should monitor Dell's commitment to infrastructure heterogeneity (servers, storage and network devices) through assessing timing on new device support and through documented road maps of planned enhancements. If Dell falters on its heterogeneous commitment, customers have few alternative options, other than to accept vendor lock-in or to implement server, storage and network provisioning, and configuration management tools with orchestration that reaches down to the device level. In common with other FBI vendors, this will require device-level programming skills for development and maintenance. EVENT Event Facts On 1 July 2010, Dell announced its plans to acquire Scalent, a privately held software company founded in 2003 that is focused on FBI and server repurposing. Dell will organize Scalent's engineering resources under Dell's products group, with the same resources responsible for element management. Dell did not release the financial terms of the transaction. Gartner estimates Scalent's annual revenue at approximately $10 million; it has approximately 75 customers on a variety of hardware platforms and fewer than 50 employees, all of which will become Dell employees. The deal is expected to close at the end of the third quarter of Analysis Scalent develops FBI software that enables the centralized management of server images and their instantiation into a server pool, dynamically managing storage worldwide names and virtual local-area networks (VLANs). Server images are located on shared storage either storage area networks (SANs) or network-attached storage (NAS) and may be booted onto physical hardware or virtual machines (VMs), such as VMware, Xen or HyperV. Likewise, hypervisor provisioning can be automated by use of Scalent software. Scalent's virtual operating environment software is part of Dell's AIM solution to enable reconfiguration of servers, networks, storage and server images/personas. As a result, this acquisition is a natural step for Dell, as the company seeks to strengthen market perception and compete more equally with the FBI strategies of vendors such as HP and Cisco. Because a single image can be instantiated on physical servers or various virtual servers, Scalent helps reduce the size and complexity of the image library, as well as enabling dynamic repurposing of servers for example, to replace failed physical servers (without the complexity of clustering) or to convert development/test servers into production servers at the time of a disaster. Whereas competing solutions, such as HP's BladeSystem Matrix or Cisco UCS, repurpose only their own brand of servers (e.g., HP or Cisco), Scalent differentiates by supporting multiple x86- Publication Date: 11 August 2010/ID Number: G Page 3 of 6

4 based servers (including Dell, HP, IBM and Cisco), even in mixed hardware configurations. It also supports heterogeneous storage and networking devices as does some of Dell's competition. Prior to mid-2009, Scalent's go-to-market model was focused on a direct sales model. However, with the economic downturn (and the particular impact on the financial sector that had generated a significant portion of Scalent's revenue), the company changed its go-to-market model in mid by targeting OEM and reseller agreements, instead of direct sales. As a result, Dell and Unisys became OEM partners for Scalent software. Scalent has maintained cordial relationships with several other hardware vendors as well, and the Scalent solution is certified on a variety of vendor platforms, including those of vendors such as HP and Cisco, which have major strategic initiatives involving fabric-based computing that directly compete with the Scalent solution. During the past year, FBI has become an increasingly common industry buzzword that has warranted inclusion in Gartner's server Hype Cycle and Market Clock. FBI is a broad industry term that applies to multiple aspects of data center infrastructure convergence. Although few vendors are building true fabric-based data centers, the design principles of FBI are heavily influencing the hardware platform strategies of most hardware vendors. As the notion of FBI has gained strength, Dell has been slow to market, as compared with HP and its converged infrastructure messaging and Cisco's unified computing messaging. Scalent gives Dell the ability to compete in FBI, but using existing rack- and blade-based servers, thus avoiding the need to rip and replace server infrastructure. This acquisition provides additional opportunities for Dell to integrate elements of the Scalent solution with its Equallogic SAN technology and, potentially, with the assets it is acquiring from Ocarina Networks. As a result, through Scalent, Dell will have the opportunity to leverage beyond servers to include its storage and networking technologies. However, whereas HP and Cisco focus their blade-based platforms primarily on large enterprises and service providers, Dell's primary target market is midsize enterprises with approximately 5,000 employees. These customers tend to have a smaller number of servers (50 to 200), with fast-growing demand for more virtualization. Because most Scalent customers are large enterprises with diverse technical skill sets, Dell intends to invest in making Scalent more consumable by midmarket customers, as well as using Scalent to assist in competing in large enterprises. In addition, Dell provides Scalent customers greater confidence and the acquisition adds financial stability to Scalent products. The key question is whether Dell will continue to invest in heterogeneous server support or go the way of competitors such as HP and Cisco in supporting only its own servers. We believe Dell will remain heterogeneous in support of storage and networking as it ships multiple vendor platforms of each. On one hand, heterogeneous server support clearly differentiates Scalent, but it also adds cost, complexity and engineering of its solution, as compared with limiting device support to its own platforms. This is the reason most server vendors write software to enhance their own solutions, rather than to improve other vendors' solutions. Although Dell claims it will continue heterogeneous support, because this is a key differentiator for Dell and desire on the part of customers, its customers will have to monitor the proof of this closely. They should be assessing its commitment to heterogeneity, with each release of new server, storage and networking devices and firmware, as well as hypervisors and operating systems. Should Dell restrict heterogeneity, there are few options for customers other than to "roll their own" by using homegrown and/or alternative vendors' multiplatform imaging or data center automation tools, along with orchestration tools, which would require extensive work to talk to the underlying hardware and software application programming interfaces (APIs). An alternative is to go with vendor lock-in, which would require a different management environment for each server vendor in the data center. The most appropriate short-term guidance we can provide varies by community as follows. Publication Date: 11 August 2010/ID Number: G Page 4 of 6

5 Scalent Customers Many Scalent users have chosen to partner with Scalent specifically because the company always promoted a policy of supporting multiple vendor's hardware, as well as the ability to create a managed heterogeneous cluster of servers. This was its preferred approach, compared with the strategies of vendors such as HP and Cisco, which predicate the use of the vendor's own hardware (HP for servers; Cisco for servers and networking) and often other components, such as management tools and networking. Users that have obtained heterogeneous server, storage and network support from Scalent should lock in their support contracts now, as well as monitor Dell's commitment to heterogeneity through its delivery against the Scalent road map and the delivery timing for specific device requests. However, it's normal to have some minor delays as the two companies integrate. Should Dell discontinue heterogeneous support and you need it, evaluate alternatives, which include using a different server-provisioning mechanism for each server vendor in the data center or overlaying it with heterogeneous data center automation and orchestration software tools (which will require customization to the hardware level). Dell is not in the heterogeneous IT operations management software business. These tools would have to be obtained from management software companies, such as BMC, CA, HP and IBM or from smaller suppliers. Unisys uadapt Customers The Unisys uadapt solution is based on an OEM relationship with Scalent that is similar to the one that Dell has had. Unisys and Dell have a good working relationship, and Unisys' OEM arrangement with Scalent will continue under Dell's ownership, including offering Level 1 and Level 2 support. Look for communication from Unisys within three months or earlier of the deal closing. Should the Unisys partnership dissolve, consider partnering with Dell to provide the same functionality. Otherwise, evaluate an alternative FBI solution, bearing in mind that this could involve extensive software and hardware migration. Egenera Customers Dell and Egenera have had a working alliance similar to the one that Dell has had with Scalent. Although they offer different implementation approaches, both have similar functionality. However, Dell's acquisition of Scalent (rather than Egenera) means that the Scalent solution is more strategic to Dell's future. Nevertheless, Dell has indicated it will continue with its Egenera partnership. Prospects considering Egenera through Dell should view the Dell/Egenera relationship as tactical. Although Egenera has indicated its continued support of and investment in Dell hardware, Egenera users on Dell hardware should seek assurances from Dell and Egenera during the next three months of their ongoing business relationship and customer support. In addition to Dell hardware, the Egenera solution can be deployed on Egenera's own hardware platform, and the company was already pursuing other hardware vendor alliances prior to this acquisition. It is logical that Egenera will accelerate this effort, if only to mitigate the potential risk of losing Dell as a partner. Hence, if Dell/Egenera users are adversely affected, there is scope for them to migrate the hardware if there is greater loyalty to the Egenera software stack. The alternative would be to reevaluate the comparisons between the Egenera and Scalent solutions on Dell hardware, especially if the Scalent solution appears to offer better support from Dell or better integration with Dell's other management software products. Publication Date: 11 August 2010/ID Number: G Page 5 of 6

6 Dell Customers FBI has gained significant visibility during the past year, fueled by market strategies, such as HP's "Converged Infrastructure," IBM's "Dynamic Infrastructure" and Cisco's "Unified Computing." Where loyalty to Dell as a hardware vendor is strong, users should consider the AIM solution as an alternative to other strategies. REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT U.S.A European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo JAPAN Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, andar World Trade Center São Paulo SP BRAZIL Publication Date: 11 August 2010/ID Number: G Page 6 of 6