Hitachi to turn into an information infrastructure vendor

Clear indicators like using core expertise from across Hitachi organizations prove that the company is on its way to turn into an information infrastructure vendor

Hitachi Data Systems (HDS) had earlier this year, unveiled significant enhancements to infrastructure solutions - Hitachi Unified Storage VM all Flash, Hitachi Unified Storage, Hitachi NAS Platform and Hitachi Unified Compute Platform through which they aim to reduce the TCO by up to 30% while doubling the performances.

HDS also recently announced their cloud services and especially for the enterprise, Hitachi Content Platform, a service that allows businesses to sync and share their files from anywhere, anytime along with the assurance of security.

These are clear indicators the company has embarked wherein utilizing core expertise from across Hitachi organizations, now HDS is transforming from a storage solutions vendor to information infrastructure vendor.

Yogesh Sawant, director, Partner Sales and Field Alliance Organization, India, Hitachi Data Systems said, "Till the last time, you met me we were known as storage solutions player, now we have evolved from being a storage solutions player information infrastructure solutions player and this has been primarily because of the introduction of compute from Hitachi. The compute might be new to HDS but it is not new to Hitachi. Hitachi has been in the server business for the last 40 years and the genesis of compute comes from the days of mainframe." He further added, "We still believe we have mainframe hangover because even on the industry standard X86 architecture that we have introduced in the last year, we have put mainframe capabilities on that and that differentiates us as we have technologies like logical partitioning, symmetrical multi-processing on the system. This differentiates us and we are the last guys to come and there are people far more matured in terms of compute."

Why Compute? Why HDS?

Sawant said, "Our customers want us to come out with an end-to-end offering and we are the only true verticalized integrated player because not only do we design and conceptualize our own technology, but we also manufacture our own products. So that is the converged architecture we have brought to the market. We will aggressively pursue that. However, we are incomplete without our global alliance partnership that we have."

HDS has established global alliance with partners like SAP, Microsoft, VMWare, Citrix and along with them offers end-to-end solutions to its partner community. These partners can then take it to the customers and address their requirements. Converged Unified Compute Platform offers solutions for Business Analytics, Collaboration, Databases, Data Warehousing, Server Virtualization for VMware and Server Virtualization for Microsoft.

Moving out of niche offerings might dilute the core strengths of the company. Contradicting this, Sawant said, "It is not that it dilutes our strengths, our forte till yesterday was with regards to storage solutions that we offered, lot of customers came to us and asked for this. Because of one fact that they realize that Hitachi is no. 1 server vendor in Japan and HDS is part of information and telecommunications group within Hitachi. Server manufacturing and fulfilling the requirements of Japan market had been happening for last 40 years and for HDS this one of the first offerings that we have to give. We are also into software and these are many facts, which are generally hidden to the world. Till I had not joined, Hitachi, I was not aware of the wide gamut of solutions, the company offers across verticals."

Furthermore, he said, "Today, we are talking about server integration along with end-to-end offerings to customers. That is why we are truly verticalised information infrastructure solutions provider so it is not very dilute. The reason we came forward with this is because customers asked for it. We also have association with the like of Cisco for Cisco UCS server like they have with VCE, Flexport. They have reference architecture with HDS. So it is just another option that we gave to customers."

HDS under UCP (Unified Compute Platform) has two kinds of offerings. One where the solutions are integrated along with VMWare, the whole stack is integrated and the secret glue in that is something called as Orchestration layer that they have introduced. The other is called UCP Select, where the company partners with all the global alliance partners that is mentioned earlier and have reference architectures. Sawant said, "These are proven, tested, certified architecture by both our partners and us. Partners have to take this, provide their services around this and give to fulfill a particular need of the customer base."

Advantage for Partners

The channel partners, who till now were either selling infrastructure of application, now have the option to offer end-to-end solutions. Their share of wallet from the customer base grows. Adding to this, Sawant said, "Hitachi classically doesn't like to offer its own services so that is another revenue model we give to partners to envelope this offerings with their services. Since, we are last we want to ensure that if they partner with us in our converged solutions, we give them healthy bottom line and make their business profitable."

One straight advantage is obviously is like any other converged solutions, faster go-to-market. For enterprise customers now there is an array of end-to-end solutions which channel partners can offer as per requirement. Adding to this, Sawant said, "We have superior technology and we are never going to cut corners and come with products that are entry level. So my technology will address customers that are in mid-range and go all the way to enterprise and in that market, I play and I win a lot. Below that market, which is the lower end of the triangle of customers where there are predominantly SMB and SME customers who have the requirement of these technologies but they don't have the width to buy."

However, HDS seems to be interested in gaining market share in the SMB and SME segment also. For these customers, what HDS has done is that it has come out with Hitachi cloud services program. This is something in which HDS has invested, it has invested in the infrastructure, it has invested in keeping a datacenter, it has invested in providing assurance of uptime. Elaborating upon this, Sawant said, "What we have done unlike most of the cloud service providers, we are not going to go-to-market and say that these are Hitachi cloud. We have decided to white label that cloud and offer it to partners. So today, I am talking to 4 distributors and they will take this cloud services, call it XYZ distributor cloud services and go-to-market."

"Again, the advantage is to the partner community. This offering is not going to help HDS gain market share but it is going to give my partners an array of opportunity for them to address that space, which till yesterday I was not able to address because of sheer non-availability of entry level products. So my partners can go and address the low end of the triangle-SMB and SME markets and they can offer my cloud services as their cloud services. Even a ABC resellers can take this service from my distributor and call it ABC cloud services. They can go to their set of customers. Even partner we speak to want to offer cloud services but they don't want to be a reseller of another cloud service provider. They would like to and prefer to have their own cloud services. I am just giving them an opportunity and the backing of our strengths. This will definitely open new market for us and lot of logos will come to us," explains Sawant.

Interestingly, the cloud services had started of as a project in Hong Kong and now it is running as a program across Asia Pacific. India is one of few early birds wanting to implement this. Also, apart from SMB and SMEs, a lot MNCs chose to go with HDS in Hong Kong. For these set, the company offers every aspect as a service like compute as a service, storage as a service, DR as a service, archival as a service, sharepoint as a service and many more.

Business Model

It will be a consumption-based model. For the company, it all depends on what services a customer avails and for how long a period. The advantage offered in terms of the time frame they have taken up the services. Sawant said, "We offer as low as 3 months to whatever period, however, the commercial will varying upon the time frame chosen." He further added, "We are able to offer these services because of our Unified Compute. It is my server, my storage, the whole infrastructure is owned by us, which is maintained and managed by us. The portal is developed by us. All that the partners have do is to take it, white label it, and sell it."

Market Size

The estimates are crazy and huge for cloud services market especially in Indian market scenario, the growth that is happening is not in 5% or 10%, it is about 50% growth year-on-year as per many research firm reports. It seems this is one of other reasons that propelled HDS to go into this line of business.

Growth Roadmap

HDS with the cloud services initiative does not intent is not to grow its market share. Elaborating upon this, Sawant said, "I don't think selling cloud as services, I will be increasing market share. We will be increasing our brand presence, as more logos will be coming to us as ABC cloud services powered by Hitachi. This will help me broad base my awareness to much more larger audience."

Impact on the channel dynamics of Hitachi

The fact that HDS has decided to go into this market via the distributors, its first contacts will be its distributors. These distributors will brand the services and push it into channel as their services. Commenting on this, Sawant said, "As it will be their brand, they will feel like a part of that brand. These distributors will go to their set of partners, these partners can re-brand that in a way they want. All these activities will bring forth the stickiness of partners with us. Even our existing partners can go ahead and offer these services to its customers. This will get a whole new flow of partners into HDS."

Content anywhere solutions

Hitachi Unified Storage provides enterprises with a single foundation for efficiently managing block, file and object data without making trade-offs in performance, scalability or capacity utilization. Especially catering to content, HDS has come out with a solution called Hitachi Content Platform (HCP) Anywhere. Sawant said, "You have heard of concept of dropbox, however much, these are gaining popularity. But the disadvantage of using such public services is that your organization's data is going out beyond the company's boundaries. There have been instances where the data has been misused. Typically, who are this people who need data on the fly are top executives. So what we are offering now is a dropbox like solution but within the enterprise and this is called HCP anywhere." He further added, "It will be under the purview of the organizations compliance policies and security policies. On this platform you can dump any form of data and access it from anywhere or any device having access to wifi or Internet connection. There is no requirement for backup and thus creates a backup less environment."

The biggest differentiator from the plethora options available is security and compliance features. Hitachi Unified Storage supports Hitachi Content Platform (HCP) for a true object store with custom metadata and provides regulatory compliance. Unlike alternative systems, HCP can share HUS capacity with file and block applications from the same storage pool. Combined, this solution is far more space efficient and cost effective for customers than separate and siloed object store implementations.

Way Ahead

HDS seems to be clear the direction it has taken, these new territories will be testing grounds for the company. However, backed with a strong legacy of business and technology along with strong global alliance, the company will be doing well. Interesting would be to see, the new solutions it will roll out. Sawant had mentioned that going ahead they will not coming out with product only but more defined and well-oiled and integrated solutions. Big Data will be definitely a key focus area for the company and we can expect solutions from the vendor in near future.