FLASH Tintri Eyes New Revenue Opportunities in Crowded Flash Market with Dedicated Solution for CSPs Carla Arend Archana Venkatraman IN THIS FLASH This IDC Flash looks at enterprise storage vendor Tintri, which has launched a cloud provider solution designed to address the specific storage challenges of midsize cloud service providers. The Flash provides insight into the specific storage needs of service providers and explores the market opportunities for a storage business strategy aimed at the service provider market. SITUATION OVERVIEW IDC expects that by 2019, 60% 70% of all primary storage revenue will be generated by all-flash arrays (AFAs). We estimate that by 2019, about 80% of shipped external storage arrays deployed in Europe alone will be based on flash technology, with HDD-only storage systems accounting for a tiny portion of the market. As flash starts dominating the external storage market and becomes a standard solution, vendors will need to innovate not just in enriching their arrays' features and bringing down costs but also be innovative in their go-to-market and business strategy approaches to maintain their competitive edge. Tintri is adapting its go-to-market strategy and creating a target solutions portfolio as well as tailored marketing and financial support program specially for the CSP market. Tintri's tailored CSP solution comes at a time when service providers are starting to increase their infrastructure spend, thanks to two main drivers: The 3rd Platform era and organizations' digital transformation projects are starting to offer service providers growing business opportunities. CSPs' strategy to offer differentiated services such as guaranteed high performance or transparent VM (virtual machine) level) analytics in a highly competitive marketplace. We believe that storage solutions designed with CSPs' specific challenges in mind will resonate well with these customers as their infrastructure challenges are unique because of the scale they operate at as well as the demanding reliability, stability, and low latency requirements. The CSPs need to provide different levels of performance and reliability per application per customer and demonstrate the health of the service to comply with SLAs. They also face other challenges such as the pressure to deliver services at low prices, balance mixed workloads on their infrastructures, and manage unpredictable I/O patterns on a highly shared infrastructure. CSPs need to bring operational efficiency through automation and management at scale while managing the quality of service per application on their virtualized infrastructures. Tintri specializes in VM-aware storage (VAS) for virtualization and cloud environments, providing storage services for multitenant virtual environments since 2011. Although VM-level granularity for storage management features is useful for all infrastructures, CSPs have been ahead of enterprises in employing these features because of the high levels of virtualization within their infrastructures and the need to deliver high performance and reliable services to their customers. Sensing the growing March 2016, IDC #EMEA41109416
competition to differentiate their services and their willingness to invest in backend infrastructure, Tintri has given a formal structure to its VAS portfolio to more aggressively target the service providers. Tintri's cloud service provider solution aims to provide CSPs with: Multiple tiers of storage performance on the same array defined by VM-level quality of service (QoS) policies End-to-end infrastructure visibility at the VM level to allow granular chargeback for storage resources and actionable troubleshooting capabilities Real-time and predictive analytics for capacity planning and upsell opportunities Under the CSP portfolio, service provider customers will have access to Tintri's VMstore flash storage arrays the VMstore T5000 all-flash series and VMstore T800 hybrid flash array. In addition, CSPs can also access Tintri Global Center, the management and analytics interface that provides actionable real-time VM-level analytics at scale (for more than 100,000 VMs) across all supported hypervisors. Tintri's solutions support vsphere, Hyper-V, XenServer, RHEV, and OpenStack environments. IDC believes that service providers will specially benefit from real-time analytics as it will allow them to dynamically assign service group policies for QoS and data protection. The management console also allows admins to transfer and retain policy settings when a VM is moved between VMstores. Tintri Inc. Tintri Inc. was founded in 2008 and provides both hybrid flash (HFA) and AFAs. The company has around 1,000 customers worldwide, including GE, Toyota, United Healthcare, NASA, and 7 of the top 15 of the Fortune 500. Tintri's VM-aware storage for virtualization and cloud environments is popular among its customer base. Its existing service provider customers include Clouditalia, Cirrity, ct4, Amatis Networks, StratoGen, and ct4. Tintri's solutions are also popular among European academic institutions, such as NHH (the Norwegian School of Economics), Denmark's Syddansk Erhvervsskole Technical College, and the University of Hull in the U.K. The company has 50 petabytes of data deployed in its systems and manages over 500,000 virtual machines. About 90% of Tintri's sales are channel driven, indicating that over the past few years the company has built a robust, structured channel strategy to underpin its success in the region. Tintri's CSP program comes six months after the company secured funding of $125 million (Series F round) led by Silver Lake Kraftwerk. Tintri's existing investors Insight Venture Partners, Lightspeed Ventures, Menlo Ventures, and NEA also contributed to the funding round, bringing Tintri's total capital raised to $260 million. During the funding round in August 2015, Tintri pledged to use it to accelerate global adoption of VM-aware storage. In IDC's opinion, the company's move to target the CSP community first to propel the adoption of its VM-level storage is a strategy that can bring results as CSPs are fundamentally more open to trying out new technologies, have a high degree of virtualization in their infrastructures, and have storage challenges that cannot be resolved with a traditional LUN approach. FUTURE OUTLOOK The external storage market continues to dwindle quarter after quarter but the flash market remains a bright spot, showing the most promising growth. The total AFA market generated $955.4 million in revenue in 4Q15, up 71.9% YoY. The HFA segment continues to be a significant part of the overall market, with $2.9 billion in revenue and 28.0% market share. Flash has been one of the most disruptive technologies to hit the storage market and drive evolution within enterprise IT architectures. With its proven capabilities around performance, speed, and latency, 2016 IDC #EMEA41109416 2
flash is becoming a standard. As a result, simply offering better and faster flash arrays at lower cost will no longer be enough to maintain a competitive edge. In our opinion, Tintri's move to capitalize on its VM-aware storage capabilities to develop a dedicated solution to help midsize service providers overcome storage challenges around performance and reliability will help it differentiate its solution for the growing service provider market. Its CSP solution features per-vm QoS capabilities for IOPS guarantees at individual VM-level and real-time analytics for troubleshooting. Storage Services at VM Level Tintri was one of first storage vendors to provide virtual-machine-aware storage capabilities from as early as 2011. The company's engineering team has designed its flash arrays to perform critical data services like thin provisioning or deduplication at VM-level rather than at artificial LUN or volume level. It also offers VM-level QoS, giving every VM its own QoS lane and policies. In our opinion, VM-aware storage management capabilities allow enterprises to more intuitively manage storage at the application level and, importantly, gain efficiency by actually performing the storage operations at the VM level rather than the LUN level for mixed workloads. VM and applicationaware storage also speeds up troubleshooting and reduces latency. But not many enterprise customers use VM-aware management features. In Tintri's own experience, when it introduced per- VM-management capability, its service provider customers were much more willing to try out the new feature and provide feedback while enterprise customers preferred to use the feature sets they were familiar with. We believe this is because many enterprises still run just single workloads or fewer workloads on their flash storage systems and still mostly use flash for speed. Also, not all enterprise datacenters are as highly virtualized as service provider datacenters. VM-Aware Storage and its Role in Easing CSPs' Challenges Cloud service providers are actively using flash arrays in their cloud environments typically already running the arrays at much higher levels of utilization with many simultaneous workloads, relying heavily on their ability to deliver consistent performance with very unpredictable cloud-based workloads. As the competition in the service provider community also intensifies, backend technologies such as VM-aware storage can provide CSPs with additional revenue-generating streams such as upselling subscribers to SLAs that are guaranteed by policy-based QoS or gaining further performance efficiency without "noisy neighbor" problems between tenants. CSPs will also be able to offer their customers a wider choice of services based on their varying needs for high performance and I/O that can be easily provided with VM-level visibility, making such storage solutions a more attractive investment choice for CSPs. Tintri's latest strategy to specifically target the unique storage performance and reliability challenges of midsize CSPs can give the company a strong footing in the service provider market segment a growing market for flash vendors. One reason for this is that service provider customers repurchase infrastructure resources faster than their enterprise counterparts because of higher rates of utilization and faster decision making, and because backend infrastructure is the backbone of their businesses. At a time when enterprises are shying away from investing in datacenter infrastructure, Tintri's go-tomarket strategy aimed CSPs with specific emphasis on QoS guarantees on performance across time and tenants as well as real-time and predictive analytics could help it grow its CSP customer base. In addition, service providers are more willing than enterprise customers to try out technologies from startup vendors giving new storage vendors such as Tintri an opportunity in a highly competitive and declining storage market. 2016 IDC #EMEA41109416 3
Having said that, service providers are also less brand loyal and could switch to vendors offering more competitive pricing and innovative technologies. Tintri will need to keep the momentum in innovation and continue addressing the storage painpoints of service providers to retain their loyalty. Tintri's formalized CSP business strategy also comes at a time when SolidFire another flash vendor with a strong footing in the service provider market with strong QoS capabilities is undergoing its own transition under NetApp, providing Tintri with an opportunity to win CSP customers that value stability and consistency and a dedicated CSP business strategy. Tintri will also need to work more closely with its channel community and offer it training on features that can have a transformative effect in a service provider datacenter, such as VM- and applicationlevel QoS guarantees, its application-aware analytics features, predictive analytics, and its "single pane of glass" management console. Despite the CSP market being a lucrative opportunity, IDC also believes that Tintri must not take its eyes off the enterprise market. CSP customers currently account for only a fraction (10% 15%) of Tintri's business. Although enterprises don't yet see VM-level storage capability as a transformational technology, it is rapidly changing. With VMware's introduction of VVOLs, more storage professionals are becoming aware of the key benefits of having data services at the VM level. Enterprises will start to move in the direction of dense mixed workload consolidation on their all-flash arrays as they build up experience and confidence in the technology, and at that time IDC expects VM awareness to become a key storage management requirement for enterprises. Enterprise-focused flash vendors are likely to offer VM-level management capabilities and VVOL support in the subsequent iterations of their solutions, making VM-aware storage a feature parity, taking the edge off early-movers such as Tintri. But Tintri's conviction in the future of VM-aware storage capabilities since the early flash days demonstrates its team's technology expertise and acumen. Its continued investment and innovation in the area has helped it quickly formalize its cloud service provider solution at the right time to target the CSPs. We believe CSPs will value vendors that offer dedicated and tailored infrastructure solutions as their needs differ from enterprise IT needs and currently only a few vendors are innovating on go-tomarket strategies. In our opinion, Tintri should leverage on the insights and feedback from its CSP customers to further improve its VM-level offering. In our experience, the more risk-taking and experimental service provider community often acts as a bellwether to where enterprise customers are going with their cloud projects, giving Tintri a headstart on the enterprise trends of tomorrow and an edge over its competitors in both the CSP and enterprise customer segments. 2016 IDC #EMEA41109416 4
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