LAS VEGAS -- As president of Dell EMC's converged platforms division, Chad Sakac leads a group that performs a...
lot of balancing acts.
Dell EMC's converged platforms include products in the fast-growing hyper-converged market, as well as the converged infrastructure (CI) systems that hyper-convergence often replaces. It also sells converged infrastructure built around Cisco servers and switching, as well as those with Dell's own hardware that competes with Cisco. And its hyper-converged products include XC appliances powered by Nutanix software through a Dell OEM deal before its merger with EMC. XC systems compete with VMware vSAN-powered Dell EMC VxRail, an EMC product before the merger.
Customers may need a scorecard to keep track of Dell EMC's hyper-converged infrastructure (HCI) lineup. Besides Dell EMC VxRail and XC, there is VxRack rack-scale HCI and VxRack Flex with EMC's ScaleIO software-defined block storage. And Dell-owned VMware sells its vSAN software as a stand-alone offering and through other hardware partners.
On the CI side, Dell EMC recently pared its product line by eliminating Vblock -- the original CI product -- in favor of VxBlock, with VMware software-based switching instead of Cisco's.
We caught up with Sakac at VMworld 2017 to discuss all things converged and hyper-converged. He said while hyper-converged is "hot, hot, hot," it still has a long way to go to catch traditional SANs. And he admitted the decision to scrap the Vblock CI brand caused "sleepless nights."
Where's the storage news at VMworld?
Chad Sakac: One of the big storage news pieces is the ongoing market shift toward software-defined. I wrote in my blog that the official Dell Technologies point of view is the majority of workloads today can be well-served by software defined storage [and] HCI. And coming from the storage market leader, that's a pretty strong statement.
If you're not an incumbent, you have nothing to lose. If you are an incumbent with hundreds of thousands of customers, people who've built their careers on SANs, to say we think today the majority of workloads would work fine on ScaleIO, on vSAN and on VxRail, VxRack -- that's a big piece of storage news.
So, does converged infrastructure contract as hyper-converged grows?
Sakac: While HCI is hot, hot, hot, superexciting, and it's technically accurate to say HCI can support the majority of workloads today, it's also equally true to say the majority of the market is still on storage arrays. Whenever there's clear change happening in the market, people want to describe it as instantaneous, and that's not the case.
The VMware installed base of vSphere is roughly 350,000 customers. Our good friends at Nutanix have publicly stated they're north of 6,000 customers. We've stated publicly we're around 3,000 VxRail customers. VMware has stated publicly they're around 10,000 vSAN customers. Put all those numbers together. You have 350,000 customers running shared storage [with vSphere]. Of that, 10,000 are using vSAN, roughly one-third of that are using VxRail, and then a clearly defined HCI market leader Nutanix is at roughly 6,000.
We're currently the CI leader, and it's our duty to make sure we continue to be the CI leader. But it's also our duty to be the clear HCI leader as that market continues to shift between these big pools of user bases.
But would those HCI customers otherwise be buying CI?
Sakac: There's no question that when all of those customers in our large installed base refresh, they look at CI and HCI. And almost all of them do both. For example, if a customer had five Vblocks three years ago, when they do a refresh, they have three VxBlocks and two VxRacks. So, is there change? Yes. Is HCI, more and more every day, the right platform for customers -- in many cases, with CI? Yes. Is that a zero-sum game? Nope. One thing leaders do is they lead all of those markets simultaneously.
How fast is Dell EMC VxRail growing overall, and compared to VxBlock?
Sakac: We haven't publicly disclosed those numbers. But the [Nutanix] XC business continues to grow in double digits, and the first number isn't a one or a two -- it's bigger than that. It's a huge business that's growing at a high CAGR [compound annual growth rate]. What we have stated publicly is VxRail grew north of 240% year over year in the second quarter.
The VxRail business is going to be a billion-dollar business before you know it. When we initially made the decision to do VxRail, the hypothesis was really simple. A ton of customers have standardized on VMware. They want roadmap alignment with virtual machines. That was the hypothesis. And we said we're going to build the best hyper-converged appliance for those customers.
You can imagine the debates: 'Yes, but everyone else building hyper-converged appliances is focusing on heterogeneity, supporting other things.' We said, 'We get that. But we're going to build the best one for customers that look like this [standardized on VMware].' We've seen there's a huge market for that.
Why keep selling Nutanix? Why not try to crush Nutanix with Dell EMC VxRail?
Sakac: It's a Michael Dell and Chad Sakac philosophy that customers demand choices. Customers want to hear your opinions. But if your opinion ends with 'That's that,' they don't like that. If you shut down ecosystems, shut down their choices to zero, customers don't like that. We have more than 3,000 happy XC customers, growing in double digits. Not only do you have to give them choices, it's just not a good business policy to punch your customer in the face.
Now, that said, has our relationship with Nutanix changed? The answer is yes. The partnership is solid, but premerger Dell would have said, 'The answer when you need HCI is XC.' The answer post-merger is, 'If you've standardize on vSphere, the hyper-converged appliance for you is VxRail, the hyper-converged rack-scale system for you is VxRack. And if you have not standardized on VMware, then your choices like XC and VxRack Flex are for you.' That's a position that our Nutanix friends would probably respectfully disagree with, and I'd say, 'OK.'
At Nutanix .NEXT in May, you said you would support the Nutanix AHV hypervisor with Dell EMC data protection. Will you support AHV with other Dell EMC technologies?
Sakac: Currently, there's no active work or plan to do it, but it would be driven by customer demand. We added support for AHV with Data Domain, Avamar and our data protection portfolio. That's for customers who have chosen AHV and they want backup. There's a clear market demand for Nutanix customers to have data protection; that's why we focused on that. It's an example of open ecosystem choice. They can choose Dell EMC; they can choose Cohesity, Rubrik, Veeam -- it's a long list of data protection options.
On the CI side, you surprised people when you stopped selling Vblocks, your original CI product with Cisco. You decided to keep VxBlock with VMware vSphere Distributed Switch instead of Vblocks with Cisco Nexus 1000V switching. What was the thinking behind that?
Chad Sakacpresident of Dell EMC's converged platforms and solutions division
Sakac: There was a lot of concern about discontinuing Vblock's incredibly strong CI brand. Vblock is the Kleenex of the CI market. We're the clear market leader. As we were getting ready for that decision, 90-plus percent of customers were buying VxBlocks and not Vblocks. Customers don't want anything other than the simplest possible software-defined networking. And that's native vSphere distributed virtual switch.
So, it was clear and obviously a good choice for customers -- and the right decision. But there were sleepless nights. We thought this could be misinterpreted if not communicated clearly. At first, everyone said, 'Hey, are you guys stopping Vblocks?' [We said,] 'No, we're basically saying the path forward is Vxblocks.'
'OK, that means you're still doing it with UCS [Unified Computing System] and Nexus?' Yes.
'So, the only change is you're no longer doing Nexus 1000V and the VDS thing, you're just doing the VDS thing?' Yes.
'Does that mean you're going to continue to support me as an existing customer?' Yes, to 2020.
So, everyone went, 'OK.' With few exceptions, it went over like a whisper and not a shout.
When and how will networking come into HCI?
Sakac: We're starting to see the tip of the iceberg on it. Hyper-converged appliances like VxRail are for customers who are ready to transform the way they do storage. They change from storage arrays to software-defined storage, they simplify how they do updates and they take complexity out of the stack. Good. What do they do on the network? Nada. What network do they use? Whatever network they have. Do they integrate software-defined networking? No.
But when customers get really big, they want to know the network has to be part of the integrated package. With VxRack, we created the idea that rack-scale systems must have physical networking and software-defined networking as part of the system. That means NSX, a physical data center topology, data center fabric -- they want all that as part of the integrated package.
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