Thursday, September 8th, 2016

Time	Event
12:00p	Virtustream, VMware to Vie for Hybrid Cloud After Dell Reorg There will be no merger of Virtustream and VMware, including any of its public cloud assets.  That was the word Wednesday morning from Michael Dell, the chairman and CEO of the newly realigned Dell Technologies, in response to a question from Data Center Knowledge. Wednesday was the first official day of operation for the new Dell and its infrastructure provider subsidiary, Dell EMC.  Last year, EMC acquired managed cloud services provider Virtustream in a move that at the time appeared to have been driven by certain EMC investors.  Since 2013, however, EMC-controlled VMware has been assembling its own hybrid cloud service, known today as vCloud Air. During a briefing on Wednesday, Michael Dell pointed to discussions that emerged during last week’s VMworld conference in Las Vegas, regarding VMware’s ongoing role with respect to service providers and public clouds.  He referred to vCloud Air Network, which represents VMware’s effort to make its own services available for resale through service provider customers. “VMware, essentially being a software company, has enabled many companies to do this — IBM certainly being a very notable one,” he said, referring to VMware and IBM’s expanded partnership, also announced last week.  That partnership will enable vSphere customers to more easily move virtual machine-based workloads into IBM’s public cloud. “I would expect you’ll see similar announcements from VMware in the future as well,” Dell added.  He thought about appending that statement, but chose instead to wrap it up succinctly by saying, “So… there you go.” Synergies or Redundancies? Mr. Dell’s statement sheds light on the significant business value that may yet be realized from customers blending their physical and virtual data center infrastructures.  While Virtustream concentrates on providing managed services for hosting-specific applications — most notably, the jewels of the SAP portfolio — VMware focuses on pooling the underlying infrastructure, both from on-premise and public cloud assets.  Its NSX network virtualization platform produces virtual networks for applications whose physical footprints may be mapped across domains, and conceivably across continents. Of the two brands, one could easily conclude VMware is the one best suited to meet the emerging needs of enterprise customers and service providers, exactly as Dell framed them. What’s more, just last week during the EMC World conference, Virtustream announced plans to integrate VMware’s NSX into its own Enterprise Cloud platform in a move it said would better position Virtustream to incorporate services from both EMC and VMware. So why couldn’t Virtustream and VMware pool together their public cloud capacities into a single platform, seeing as how such integrations are precisely what NSX was designed to enable?  VMware could gain data center presence in Washington, D.C., which it currently lacks, while Virtustream would gain presence in Germany, Japan, and Australia. It’s not as though VMware’s own executives seem closed to the idea. The goal of the Cross-Cloud Architecture “is to embrace as many clouds as we can,” VMware CEO Pat Gelsinger said during a press conference at VMworld 2016 last week.  “Simply put… to increasingly provide integrations to different clouds, as well as to help many people build their clouds in the VMware technology stack.” Read more: VMware Reassembles Cloud Stack With a New Foundation Gelsinger went on to cite VMware’s expanded partnership with IBM and in the same breath Virtustream’s embrace of NSX as examples of the many ways the different business units’ technologies will evolve into one another over the coming months. Dell Technologies CFO Tom Sweet made clear this Wednesday that his company’s mission going forward may as well be VMware’s entire mission statement. The 2016 version of Dell Technologies (slimmer) logo. “Our strategy and our portfolio enable our customers to build new cloud-native applications,” said Sweet, “so they can make the move to digital and run their traditional applications, because their business depends on these today.  Traditional infrastructures are highly resilient and run the vast majority of applications in the business today. “Here, IT is looking to both improve performance and resiliency,” the CFO continued, “while at the same time driving greater efficiency and lowering costs.  We achieve this by helping IT influence a hybrid cloud strategy based on a modern data center architecture.  That means flash, scale-out, software-defined, and cloud-enabled technologies that are trusted and secure.” Sweet did not include “homogenous” in that list of properties of the modern data center, though he may as well have. He did refer to the combination of Virtustream and VMware assets as “our cloud.”  There were two sides to that cloud, however, with Virtustream representing customers’ expansion of their hybrid cloud strategies and VMware representing the software ecosystem for a variety of cloud service providers. Yet it was last December, in an 8-K filing with the SEC, that VMware was first to state in clear and unambiguous terms that “it will not be participating in the formation of the Virtustream Cloud Services Business previously announced by EMC and VMware on October 20, 2015.”  Indeed, VMware may have been the first to nix its own demonstration of internal hyperconvergence. Dell’s Opportunities Veteran technology analyst Kurt Marko says he has been impressed by Virtustream’s cloud management technology — particularly with building self-service provisioning portals around applications.  In a note to Data Center Knowledge, Marko said he feels neither Virtustream nor vCloud Air intend to compete against the major public cloud players today for capacity.  Virtustream may continue to lead with its services, though this could end up painting vCloud Air into a corner. “Virtustream knows it can’t and isn’t trying to compete with AWS,” writes Marko.  “Instead, it targets its workload packing uVM technology [PDF] to traditional, business critical applications like SAP (including HANA), Oracle (and its app ecosystem), Microsoft Dynamics, and vertical applications in finance or other industries.  vCloud Air isn’t an AWS or Azure competitor either — no one will base a cloud application or infrastructure strategy around it.  Instead, it seems relegated to be a backup/disaster recovery service for on-premises VMware infrastructure.  Indeed, vCloud Air’s future looks grim with the Cloud Foundation announcement, and IBM ramping up VMware SDDC services on SoftLayer.” Marko went on to say he expects Dell’s existing plan to support Microsoft’s forthcoming Azure Stack to go forward as planned, thus making Azure a critical part of Dell’s hybrid cloud strategy, regardless of what happens with VMware and Virtustream. See also: Microsoft: Azure Stack Will Be Sold Separately, Eventually “It’s unclear how or if this competitive tension between on-prem Microsoft and VMware infrastructure gets resolved,” he wrote.  “Dell could continue with the posture that it gives customers choice to use whichever they prefer.  In the long term, I think Microsoft has the stronger, more technically pure, and economically viable hybrid cloud strategy.  But VMware has a half-million customers that aren’t in any rush to change.  So perhaps we see tighter workload migration features between vSphere and both Azure (mainstream workloads) and Virtustream (high-end, mission critical).” Last week, Mr. Dell told VMworld not to expect changes in VMware’s business strategy following the consummation of the merger and reorganization.  While Wednesday’s press briefing only managed to underscore his advice, some part of Dell’s strategy may have to change in short order before confusion sets in here, too. (Comment on this)
2:31p	TPG to Buy Intel’s McAfee Security Unit in $4.2B Deal (Bloomberg) — TPG, the alternative-asset manager that oversees $70 billion, agreed to acquire a majority stake in Intel Corp.’s computer-security unit in a deal that values the business at $4.2 billion including debt. TPG will own 51 percent of the company, known as McAfee, while Intel will have a 49 percent stake in the spin-out, according to a statement Wednesday. The company will be led by Chief Executive Officer Chris Young, currently a senior vice president at Intel and general manager of its security unit. Intel is offloading the anti-virus software unit as part of a strategy to focus on its more profitable data center business. The Santa Clara, California-based chipmaker acquired McAfee in 2011 for $7.7 billion to build security features directly into its silicon products. The business had $1.1 billion in revenue in the first half of 2016, an 11 percent increase from the same period last year, Intel said in the statement. Operating income more than quadrupled to $182 million. Intel had also been talking to other potential suitors, including buyout firms and corporate suitors, people familiar with the matter said last week, naming TPG as a likely bidder. “We have long identified the cyber-security sector, which has experienced strong growth due to the increasing volume and severity of cyber attacks, as one of the most important areas in technology,” Bryan Taylor, a partner at TPG, which has its main offices in San Francisco and Fort Worth, Texas, said in the statement. “We see a compelling opportunity to invest in a highly strategic platform that is growing consistently.” Equity Investment TPG, led by co-CEOs Jim Coulter and Jon Winkelried, will invest $1.1 billion in the transaction, valuing McAfee’s equity at $2.2 billion, according to the statement. The company has net debt of about $2 billion, which Intel will finance for three to five months after the deal is completed. The companies expect the transaction to close in the second quarter of 2017. After acquiring McAfee, Intel struggled to grow the unit and integrate it with its bread-and-butter chips business. Some private equity firms that spoke with Intel about potentially acquiring the division were wary about its growth rate and their ability to cut costs further than Intel had, the people with knowledge of the discussions said last week. The security business was started by John McAfee in 1987 and has sold anti-virus software to companies and individuals. It was renamed Intel Security in 2014. John McAfee is suing Intel for the right to use his name in his new ventures. He leads MGT Capital Investments Inc., which he wants to rename John McAfee Global Technologies Inc. “Intel should wait to see whether they have any right to use my name,” McAfee said in a text message Wednesday after the deal with TPG was announced. TPG will make the investment from its TPG Partners VII fund, which finished gathering $10.5 billion in May. (Comment on this)
4:49p	Delta: Data Center Outage Cost Us $150M The Delta Airlines data center outage that grounded about 2,000 flights over the span of three days in August cost the company $150 million, the airline’s representatives told the audience of a transportation industry conference in Boston Wednesday. The number is extraordinarily high, illustrating that major airlines have a lot more at stake when designing and managing critical infrastructure than most other data center operators. The average cost of a single data center outage today is about $730,000, according to an Emerson Network Power-sponsored study by the Ponemon Institute, released earlier this year. Of the 60-plus data center operators surveyed for the report (PDF, registration required), the costliest reported outage caused the operator to lose about $2.4 million. Ponemon looks at a fairly comprehensive set of impacts when assessing outage costs. In addition to things like damage to mission-critical data, equipment damage, and impact on productivity, the study takes into account losses due to legal and regulatory impact, loss of confidence and trust, and impact on brand and reputation. But major airlines like Delta are a special case, in which there are costs beyond Ponemon’s scope. Delta, whose outage was caused by electrical-equipment failure, was obligated to issue refunds to customers whose flights were cancelled or significantly delayed. Considering the volume of flights that were cancelled after its five-hour data center outage in Atlanta, the incident’s price tag isn’t as surprising. Southwest, another airline that presented at this week’s investor conference, experienced an outage in July, which led it to cancel flights over three days. While it didn’t disclose the exact cost of the outage, CNN estimated it to have been at least $177 million in lost passenger revenue, based on ratios Southwest did provide. See also: Delta System Failure Marks Wake-Up Call for Airline Industry Delta and Southwest spoke at the Cowen and Company Global Transportation Conference. (Comment on this)
6:13p	SonicWALL Partner Calms Customers Amid M&A Turbulence Brought to you by MSPmentor When cybersecurity vendor SonicWALL was acquired by Dell in the late spring of 2012, the folks at partner Stronghold Data scrambled to reassure clients that the merger would ultimately be in their best interests. A Joplin, MO-based managed services provider (MSP), Stronghold leveraged its relationship as a “trusted advisor” to convince customers that their networks would remain as secure as ever using software from the new Dell SonicWALL. In June – just more than four years after the Dell acquisition was finalized – Stronghold learned that SonicWALL was being sold again, this time to a pair of private equity firms that vow to return the brand to a standalone company. See also: SonicWALL Makes Ready for Split From Dell Representatives of Stronghold Data recently sat down with MSPmentor during the Dell Peak 16 security conference in Las Vegas, to discuss how they’re navigating the customer relations challenge posed by the vendor flux. “If you’re not adept in terms of embracing change and you’re in security, you’re obviously doing it wrong,” Stronghold project director Brad Schneider said, citing a talking point from a conference keynote speech. Stronghold Data has been in business for 26 years, generating revenue during much of its past as a reseller and integrator. See also: Virtustream, VMware to Vie for Hybrid Cloud After Dell Reorg It pivoted to managed services just more than a decade ago and now boasts customer relationships so rich that Schneider is routinely tapped to weigh in on customers’ broader technology strategies. “As a trusted partner, we’re really their security department, in a number of the cases,” he said. “We have that insight into the metrics of their firewall – of their security.” “We actually have some clients where we sit in their IT meetings,” Schneider added. “We have that level of trust.” The strength of those relationships has been tested since Dell first bought SonicWALL in May 2012. Customer reactions can run the gamut. “There are some that stay abreast of all of the changes in technology and they kind of reach out to us, but that’s a very small population,” Stronghold sales director Jason Rincker said. “At the other side of that spectrum, there are those customers that don’t care.” “They are looking to stronghold to make the best decision for them and their business,” he continued. “Whether it’s a SonicWALL or someone else, they just want to know that they’re protected.” Customers who are interested are encouraged to discuss the changes with Stronghold Data officials during gatherings like lunch and learn sessions, or marketing events. “We try to get out in front of it and really embrace it and answer those questions,” Rincker said.  “When we can go in with those right solutions, it presents us as the expert in that field.” Often, reassuring customers comes down to simple practicality, Schneider said. “We have had a couple of our clients ask us about the transition,” he said. “Basically, I said, the firmware is the same. The engine is the same. The engineering team is the same.” “We were strong as a SonicWALL partner before (and) will be again,” Schneider continued. “That was a very satisfactory answer for clients.” Himself an engineer, Schneider said the latest SonicWALL transaction is being welcomed by many technicians. “One of the things that we liked most is the renewed responsiveness we’re expecting to see from the engineering staff,” he said. “In the pre-acquisition days, SonicWALL … we could have them on speed dial and make a feature request and they’d be immediately responsive,” Schneider explained. “And I think you’re going to see that kind of responsiveness come back.” This first ran at http://mspmentor.net/msp-mentor/sonicwall-partner-calms-customers-amid-ma-turbulence (Comment on this)

<< Previous Day

2016/09/08 [Calendar]

Next Day >>