Microsoft entered into the cloud storage space this week when it revealed plans to acquire StorSimple. The move leaves competitors and others in the storage industry wondering about Microsoft's next move, and what the acquisition will mean to rival cloud providers and the startups who sell cloud storage devices similar to StorSimple's appliances.
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Microsoft already offers Windows Azure cloud service in competition with the likes of Amazon S3, Google, AT&T, Nirvanix and Hewlett-Packard Cloud Object Storage. But like the other providers, Microsoft relies on products such as StorSimple's to move data to its cloud.
StorSimple's cloud integrated storage (CIS) device has been called a "SAN in the cloud" because it acts like a regular storage array that sits on the customers' site while pushing data to the cloud. Its appliances provide full primary storage capabilities, with up to 100 TB of on-premises storage capacity for enterprise applications. StorSimple controllers rank data based on activity, cache the most frequently accessed data, and move the rest to the cloud.
Startups TwinStrata, Panzura, Nasuni and Ctera Networks provide devices similar to StorSimple's, with various features and functionality. Microsoft's cloud storage move may entice other cloud services or larger vendors to pick up one of StorSimple's competitors.
"One implication of this is, I'm sure the phones are starting to ring," said Mark Peters, senior analyst at the Enterprise Strategy Group (ESG). "Very often, big players will start picking up these companies."
The other cloud storage gateway vendors said they are not worried about having Microsoft as a competitor.
"This validates the market," Nasuni CEO Andres Rodriguez said. "This is a good strategy for Microsoft. Its strategy is to have a low price-point and move much more storage … into the cloud."
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Ranajit Nevatia, Panzura's VP of marketing, said StorSimple gives Microsoft an iSCSI storage device to match up against Amazon's home-grown iSCSI appliance. Still, he said the deal left him "perplexed" because it was uncharacteristic of Microsoft.
"When did Microsoft ever acquire a storage company? When did Microsoft ever acquire a hardware company?" Nevatia asked. "So is this a storage play for Microsoft? Is it a hardware play? Or is it a cloud play?"
Nevatia said he doesn't consider StorSimple a prime competitor because Panzura is network-attached storage (NAS), and moves data to clouds owned by Amazon, EMC Atmos, Hewlett-Packard, Google, Nirvanix and Rackspace, but not Azure.
StorSimple has worked closely with Microsoft, tying its product to the Azure application programming interface (API). It also partners with Azure competitors Amazon, Rackspace, EMC Atmos and Nirvanix. Microsoft's Mike Schutz, general manager of the server and tools business division, said there are "no plans to change the current partners StorSimple has today."
Of course, tomorrow may be a different story. Microsoft could use StorSimple exclusively to drive customers to its cloud.
"This gives Microsoft a point of control, which allows them to grow their own business," ESG's Peters said. "It doesn't take a genius to determine that Microsoft will make its own cloud more attractive. Microsoft has Cloud OS, and this is a way to get more data faster into Azure. The idea is to make the cloud an integral part of computing."
James Bagley, senior analyst at Storage Strategies Now, said Microsoft can offer customers a more competitive choice over Amazon because Azure has a much richer API.
"Amazon has a much simpler API," Bagley said. "Azure's API is broader and it has many more features for the cloud. Amazon's API is documented on one page, while Azure's API is documented in a book. StorSimple has been working closely with Azure. Now that they are working inside Microsoft, they can do amazing things."
Medical device manufacturing company MedPlast Inc. is a StorSimple customer, using the StorSimple 5020 and 5520 appliances that store 150 TB of raw data. MedPlast first used StorSimple with the S3 cloud, but switched to Azure because of better pricing. Amazon cloud services charged one cent per 1,000 transactions, while Azure charged one cent per 10,000 transactions, regardless of whether they were GET, PUT, COPY, LIST or POST requests.
"We might see more integration with Microsoft," MedPlast IT director Dan Streufert said. "I think Microsoft has a lot of resources to grow the platform. I was also impressed with [StorSimple's] engineering team. They were very responsive. Hopefully, Microsoft will retain the engineering group and talent."
Senior news director Dave Raffo contributed to this story.