 Live from the Palace Hotel in San Francisco, it's theCUBE at the HGST Press and Industry Analyst Briefing. Brought to you by headline sponsor HGST. Here are your hosts, Stu Miniman and Jeff Frick. Welcome back, Jeff Frick here with theCUBE. We are live in San Francisco at the Sheridan Palace Hotel at the HGST Industry Analyst Impress event. I'm joined by my co-host. Hi, I'm Stu Miniman with wikibond.org, digging into all the news of the day, flash, disc and everything. And my guest for this segment is Jeff Janukowitz, who's a research director with IDC, focuses on the SSD market. Jeff, thanks so much for joining us. Absolutely, it's a pleasure to be here. All right, so Jeff, in the storage industry, nothing has probably impacted storage as much the last five, six years as flash has. So we wanted you to come in and help set the table for us. A lot of announcements that we want to help you unpack, but back up for a little bit for us and give us what are you seeing in the marketplace? Obviously, IDC does all the quarterly trackers, shares all the numbers. So where are we in the flash marketplace? Well, it's still early on to be honest with you. I mean, if I just use the analogy of a baseball game, it's still probably only the second or third inning. But what's interesting is, is the conversation around flash has really evolved a lot. And HGST and others use the word transformational. We use the word transformational a lot in our conversations as well. And flash is truly a transformational technology. And over the last couple of years, I mean, we've seen it move from a conversation that's primarily, does flash even belong in the data center? Does it have the reliability? Does it have the endurance and some of those types of things to, well, maybe it's appropriate for certain niche environments, really high performance types of things. And now like we just heard with HGST, we're talking about a flash fabric. So a more pervasive use of flash across the ecosystem. And I think that this is really changing the storage paradigm at the end of the day. For decades, as long as you can go back, you think about people talking about the storage hierarchy. It was a nice isosceles looking triangle where we had maybe a little bit of memory, some disk and some tape on there. Then as we got a little bit more advanced, we started adding newer technologies. We started adding performance optimized disks. Maybe the 10 and 15K types of drives. Then we started asking these high capacity, capacity optimized drives. And now we're starting to throw flash into that pyramid as well. But one of my colleagues really kind of talks about the point that it's really changing and it's not as much of a traditional pyramid today as it's more like a flask. And the idea of a flash, people typically look at flask as storage. They draw a nice little picture of a, it looks like a flask out there. And today, if you look at our data, you know, it's here to suggest, you know, there's still just a little bit of flash being used. But over time, that flask starts to narrow a little bit at the top where we get a lot more flash. Some of those performance optimized disks that are in the middle get squeezed a little bit. But then there's still the bulk of that capacity on these very large capacity types of drives. Yeah, so Jeff, it's interesting, because when we talk about flash, performance is usually one of the main things that we talk about. One of the things that struck me is if you heard the customer study that they talked about was LinkedIn. And it's not necessarily just because it's faster, it's what I can do better with the business. So I can deliver new value because the user gets things faster and therefore I can have more going on. So it's kind of time to value is one of the terms I think we've heard a lot. You know, what is flash enabling the industry to do now that it couldn't just do because it's, you know, a little bit faster, a little bit better or cheaper? I mean, we live in a real time world today, right? So we expect to have real time access to our data. We expect to have real time access that's ubiquitous across all of our devices. And flash is really a key component of that because what we really want to have is that we want to have our data right now. We want to have it on the right device. We want to have it staged properly. And that really actually flows, you know, throughout the entire ecosystem. And it starts quite honestly with the data center. I mean, a lot of our contents clearly moving to the cloud. A lot of the services that we use are, you know, in the cloud. And flash enables that quick access. And then if you think about the, you know, even our edge devices, you know, whether it's our mobile phones or, you know, tablets, et cetera, and more and more so even our PCs, they're all flash enabled as well. So it's really that real time access to data and how we access it. Yeah, good points there. And you mentioned the cloud, you know, we think when flash early was deployed, of course it was on kind of, you know, it was our tablet, it was our computers. It was really in the consumer side. Over the last year or two, I've seen a lot of, you know, flash being deployed in the cloud providers at AWS to reinvent last year. They had a big push for kind of performance tiers and using flash. Where is general cloud adoption of these various flash technologies? Any interesting data points you can share with us? Well, I mean, today we still see flash. I mean, the cloud was really an early adopter of it because if you think back to what a lot of the caveats around using flash and SSDs were, it was about, you know, its endurance, it was about its right performance, where a lot of the things that are being done in the cloud are very read intense. So, you know, we may be writing to disk, you know, once or twice a day, but we're reading from that, you know, hundreds if not thousands, if not millions of times, from that single piece of information. So that workload that many of the cloud providers have is very, very well suited towards the benefits of flash. So you just really had a perfect scenario where the technology really matched that workload in use case. So Jeff, I wonder if you could talk about how that is impacting in the enterprise. Cause a couple of things about the cloud and the cloud applications, usually as you said, there's single purpose applications, but they've really shown that there's value to be delivered in low latency beyond just the financial markets in the way that they deliver their applications. But at the same time, a lot of them are doing kind of single use. So how do you see some of your clients in the enterprise really trying to adopt the best of that while at the same time dealing with the reality that they've got multiple types of workloads, multiple types of things going on? Well today, what we really see is still flash is being used primarily for a dedicated or a single workload use. So if you have a specific database or you have a specific application that there's a pain point or performance issue, flash is that solution today. But really where we see it going is, is it being used for more broader use cases, for more mixed workload environments. And that's really where we start talking about flash moving from just certain applications, something beyond niche into much more mainstream types of things. And a lot of that flash fabric that you heard is just he talked about earlier today. Yeah, Jeff, I'm wondering, let's talk a little bit about flash fabric. From Wikibon's standpoint, we wrote a market definition of what we call server sand earlier this year, really having a scalable architecture based on compute with the storage built into it and having a software layer that builds out to it. So when I heard flash fabric, it resonated with me. From your standpoint, what was your take on it and what does the industry need for this to become reality? Yeah, that's a good question. I mean, conceptually, like you said, I think it makes a lot of sense about people having flash and the idea of having flash closer to the processor. Likewise, I think people understand that and seems to make sense for a lot of people. I think the question becomes, how do you actually do that and how do you actually enable that ecosystem to happen? And I think that that's the scenario that we're in today where the industry is really trying to figure out how to create that type of scenario. And what we see today is that flash is really kind of sprinkled throughout the entire data center. We see a lot of flash being used as really still just traditional direct attached storage. We see some server side caching solutions out there. We see a lot of hybrid arrays, flash and HDD arrays. If you look at the attach right there, it's continuing to get higher and the emergence of all flash arrays as well. So it's really, it's about sprinkling this and quite frankly, the right answer really depends on what your existing environment is, what your application suite is, to really which solution is gonna be the best for you. But nevertheless, if we look how this is translated over to the SSD market, it continues to go higher from our perspective. And if we look at where we are today in terms of SSD shipments versus where we were in 2013, the first half of 2013 to the first half today, we shipped about 80% more SSDs. So we're seeing a lot of these things starting to gain a bit of a foothold. Right, so one of the things that HGST is trying to do is create building blocks. And you see a couple of companies out there that have been acquiring technologies and building these solutions. Sandisk is another one that comes to mind making some similar acquisitions and moves. How much do you think that will help accelerate this SSD adoption? I think clearly it's one of the things that's actually necessary for the market. A lot of people tend to look at Flash and think, well, it's just, I have Flash in my phone and thus it can be put into the data center. But there's really a lot that goes behind creating a reliable, high performance Flash device that's suitable for the 25x7 nature of the enterprise. And that really starts at the NAND level, having access to the right pieces of technology. And HGST talked a little bit about re-engaging or extending their JV with Intel. They talked a lot about the controller technology and a lot of the IP that goes around that. So the idea of managing Flash is very, very important as well, particularly when you talk about the controller technology, the firmware that go along with it. But then also the devices. And what we're seeing today is, because you have that variety of use cases, whether you're talking about server side or whether you're talking about hybrid arrays or all Flash arrays, it's gonna dictate not only your form factor, but it's gonna dictate the types of interfaces that you use. And all those things are playing in. And HGST has really gone about the strategy of going out and acquiring some of those very, very key pieces that are gonna be necessary. And even on the application and the software side, where we talk about trying to broaden the overall industry. In a lot of cases, it's enabling that software to take advantage of it. It's enabling the application to be accelerated. And some of those things go just beyond where we talk about at the pure device level. All right, so I think back three, four years ago, we had a lot of education to do in the marketplace just to explain that Flash, how important it is, and that it's not just a application. As I said, there's server side Flash, there's the hybrid arrays, the all Flash arrays, sprinkling it all over the place. Today, there's just such a spectrum of solutions out there that the line tends to be blurring, as I said, from the NAND suppliers, through the building blocks, through the various storage arrays and the components. In the research you're doing, what do you think are the biggest misconceptions out there and opportunities for the Flash marketplace to be able to help move things forward? Well, I think one of the biggest misconceptions are, it's actually around PCIe, and HST talked a little bit about in some of their conversations. PCIe is something that is still coming. It's still coming down the pipe. We see a lot of adoption of it today, but it's still relatively small when you compare it to some of the other types of things. The evolution with NVMe and some of the standardizations is definitely gonna help that situation, so I'd expect that to continue. And that sort of dovetails right into what's an opportunity, right? Actually, I bet a lot of our audience isn't familiar with NVMe. Can you give kind of a 101 on what it is, where the standard is, and why it's important? Sure, absolutely. So today what we see with most of the PCIe types and solutions are is that they require custom drivers. It's a custom type of solution. And really what that means for folks is, is you have to not only marry the hardware, but yes, also have to do some things at the server level to enable it. And not everyone's comfortable with that because you sort of get locked into a specific vendor. NVMe promises to be that standardization, so it standardizes the protocol. So it enables multiple users and it enables dual sourcing of similar types of devices. But at the end of the day, what it did is it really streamlined a lot of the PCIe protocol to enable very, very low latency types of things. So it took out a lot of the things that have been put into the storage interface protocol through the years to make it reliable and some of those types of things and really streamlined some of that process. So it's something a lot of people are interested in. We're starting to see a lot of products be announced. They're starting to ship now, as we're here in the second half of 2014. And as we move into 15, it's something that we're expecting the industry to define more and more acceptance around. Yeah, absolutely. I mean, just down the block from us going on right now is the Intel Developer Forum and there's lots of hardware showing off what they're doing with NVMe. So it's definitely come from the discussion of the last year or so into real stuff we can see and of course HGST's got shipping solution now. So Jeff, we're running low on time. IDC, you guys are the numbers guys. Why don't there's some other good numbers that you want to share with us. You already talked about shipping's being up 80% from last year. Any other good nuggets you can share with the audience? Yeah, absolutely. I mean, when we talked about the units being up about 80%, so if we looked at the first half, but more importantly, revenue's up as well. I mean revenue's up about 40% in the first half of 2014 versus 2013. But what's interesting, if you really step back and think about it, I mean, HGST is a hard drive company as well. The amount of dollars that are being spent on performance disks, so the 10 and 15K types of drives and the amount of dollars that are being spent on SSDs is about the same this year. They're both going to be right around $4 billion. So people look for that crossover. So while there's still only a small amount of the capacity that's being shipped on Flash, if you look at the amount of spending that's being shipped, that's being done on Flash, we're already on par with some of the performance applications which really mirrors a lot of what we say. So for a lot of the performance active portions of the data set, Flash is a good solution and we're seeing that start to matriculate in the market today. Awesome. Well, Jeff, thanks for stopping by. We're getting the hook here, so we're going to get on with our next guest again, Jeff Frick here at the HGST Industry Analyst Impress Event at Sheridan Palace Hotel downtown San Francisco. We'll be right back with our next guest after this short break.