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The Hottest Enterprise IT Trend You Have Never Heard of

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Ten years ago, the term virtualization was rarely uttered in an enterprise data center.  Today, it’s part of the daily vocabulary.   Server virtualization has changed the datacenter forever,  shifting the proverbial IT bottleneck from computers to storage.  There’s hardly an element of the enterprise infrastructure that hasn’t been impacted in some way by virtualization. Today, we all know more about virtualization than we care to admit, and VMWare’s stock has gone up and down and up again….

The Cloud is supposed to be the next big thing in IT – first brought to the public’s attention in 2007 in The Big Switch, by Nicholas Carr. Back then it had not yet make an indelible mark on the enterprise.

Three years later, the Cloud is already the centerpiece of ubiquitous primetime ads brought to you by the folks in Redmond.  The Cloud has been over hyped, then under hyped (Gartner would call this the Trough of Disillusionment), then over hyped again. Certainly, the Cloud will have its day in the sun. But this post is not about the Cloud…

This post is about Flash.  Not Adobe Flash.  Not Flash sales.  But Flash memory.  Flash memory, the solid state technology that has mysteriously entered our lives through iPods, smartphones, tablets, laptops, and practically any mobile device, is about to invade the Enterprise Datacenter – in a very big way.  While consumers have provided the insatiable demand for this technology that has driven its cost lower and lower, a group of savvy startups have been preparing this technology for large scale business deployment.

It’s the hottest trend you’ve never heard of, the virtualization of 10 years ago.

Why Flash memory?  Why now? Because rotating hard disk drives (HDDs) are no longer good enough…..the last bastion of moving parts (i.e. “energy hogs”) in the datacenter has lived a good life, but like tape, its days are numbered.   Disk drives are great for storing large amounts of data, and will continue to have a relevant place in the data center in that role.  But now that the bottleneck has shifted away from servers, there will be a new focus on storage performance that will pave the way for Flash memory-based solutions.

But while performance is the reason for introducing Flash into the datacenter, COST will be the reason that it takes a significant “byte” out of the disk drive market.  You see, a “hybrid” storage system that includes Flash memory for speed and inexpensive HDDs for capacity is both faster AND lower cost than a system comprised solely of expensive high performance HDDs.  Hybrid systems are expected to become the “flavor of the decade” for storage during 2011.

Unlike virtualization, Flash memory in the enterprise will not grab your attention because of a single poster child (aka VMWare), but rather because of the depth and breadth of solutions that will pervade the market.  There is an ecosystem building around enterprise flash memory that will enable continuous improvements in cost, performance, and reliability while providing a variety of product choices to end customers.

Companies like FusionIO*,  OCZ, and Virident provide card-based solutions that plug into server slots.   These solutions have a direct high speed path to the computer, allowing them to satisfy I/O intensive applications like database processing and web analytics.

Other companies like Pliant Technology* and STEC package Flash memory in the same form factor and with the same storage interface as HDDs, creating a solid state disk (SSD).  The large storage and server OEMs will place SSDs into HDD slots, allowing them to quickly retrofit current products with this hot new memory technology.

There are also appliances from companies like Avere, Gridiron, and Kaminario that pack large capacities of Flash into a standalone system in order to accelerate capacity-hungry, mission-critical applications.

Other companies like Nimble Storage* take a “clean sheet of paper” approach to design a best in class “hybrid” system from the ground up, offering enterprise customers unprecedented functionality in a single system – raising the bar once again on the storage incumbents.

On the component side, companies like Sandforce, Anobit (also an SSD player), and Link-a-Media* are offering merchant silicon solutions for controlling and managing Flash. These pre-engineered building blocks could shorten development times for the next set of market entrants.

And, of course, there are several stealthy software companies that will engineer more performance, reliability, and availability into the solutions that gain the most favor with enterprise customers.

Over the next few years, billions of enterprise IT dollars will shift from rotating disks to Flash memory solutions.  Several private companies will ride this wave to financial success. Meanwhile, the heavyweight storage and server OEMs, who have already recognized the disruptive nature of Flash memory, will reshape their product lines as they battle over market share.   Given the scope and scale of solutions coming to market, and the insatiable enterprise demand for storage price/performance, it’s not crazy to predict that we will see the next $10B enterprise market develop in this area.

But don’t expect a Superbowl commercial for any of these companies anytime soon!


* A Lightspeed portfolio company

Read more at Lightspeed Venture Partners


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