Flash Expands As Primary Storage; Market Share Still Tiny

October 27, 2014 Dan Burger

IBM‘s investment in flash technology, which was pegged at $1 billion when it was announced in April 2013, has led to a number one market position in enterprise flash-based storage. It’s not a large market. Even the grandest estimates have it at less than 10 percent of the enterprise storage business. It is undoubtedly growing though, particularly as primary storage, or what is called Tier 1 storage, in the lingo.

Since it was first introduced as an enterprise-grade alternative to spinning disk technology, flash has come up against three obstacles: price, endurance, and reliability. Michael Kuhn, vice president of flash systems at IBM, has seen these obstacles shrink to what he calls “the tipping point” where flash meets or beats spinning disk. At the IBM Enterprise2014 conference earlier this month, he let his perspective be known in a one-on-one session with IT Jungle.

Right now, IBM aims flash storage at the 20 percent of data that is considered to be Tier 1, which is mission critical and highly accessible. Kuhn refers to this as the performance tier, and Tiers 2 and 3 are the as capacity tiers, sometimes referred to as cheap and deep tiers.

“Enterprise clients are not going to move to all-flash data centers–those that use flash for all three tiers–any time soon,” Kuhn says. There will be some small form factor exceptions, he says, but Tier 1 is where the focus is at this point in time. Flash-based storage for Tiers 2 and 3 will likely come into play in the future. IBM has its eye on that market without question.

On the issue of price, Kuhn says the game is changing and the pricing is lower than most realize.

IBM just announced the third round of enhancements to the Flash System V840 this year. Data compression increases have been a big part of the enhancements. The system scales up four ways and out eight ways. It now offers 320 TB of RAID5 protected capacity, which works out to 1.6 PB of flash in a single rack. Taking those enhancements into account, Kuhn comes up with an estimated cost of $2 per GB, which is in line with flash storage arrays from major competitors and in the ball park with high-performance arrays based on spinning disk.

Kuhn contends the price point on flash has not come close to bottoming out. Flash will continue to get cheaper. On the other hand, so will disk.

The endurance issue has also changed. The common perception is that flash wears out. The lack of confidence has been a factor in low adoption rates.

“We put flash under warranty for five years,” Kuhn notes. “If it wears out, we will replace it free of charge. And the offer is retroactive–good for IBM flash systems already sold. That’s changing the perception of whether flash is ready for enterprise storage.”

Although Tier 1 storage is the enterprise battleground today and flash seems to be on its way to replacing disk based on the early impacts, the number of organizations looking at flash for Tiers 2 and 3 is increasing.

“Yes, we think there is potential to go beyond the 20 percent tier,” Kuhn says. “We’ve just reached the tipping point where all flash systems are cheaper than spinning disk. There are still Tier 2 and Tier 3 cheap and deep strategies where the price point discussions are in the range of 50 cents per gigabyte. We have a software defined strategy that addresses virtualized data and an elastic storage system.”

Kuhn estimates 25 percent of storage is virtualized today, but it is on a path to become all virtualized in the near future. “The bond between the physical device and the data will be broken,” he says. “Automatic tiering will come into place. Hot data will be routed to Tier 1, then auto-tiering eventually moves it to Tier 2 and Tier 3. And those tiers will use enterprise flash, commodity flash, and cheap flash.”

IBM’s investment in flash takes this into account.

IDC forecasts that by 2016 the market for all-flash storage arrays will jump to $1.6 billion, with a 59 percent compound annual growth rate between 2012 and 2016. For now, companies are buying hybrid flash-disk arrays to accelerate their SANs and are buying all-flash arrays to accelerate specific workloads like databases and virtual desktop infrastructure.