On the heels of the big industry news of HP and Dell bidding for storage vendor 3Par (which SiliconANGLE covered like a blanket), there is a silent war going on. A war for leadership in virtualized storage. A battle for number one in virtualization by the leading vendors EMC, IBM, HP, NetApp, and others.

According to multiple industry analyst firms, EMC is #1 in virtualization. Specifically, EMC is #1 in storage shipments for VMware environments.

At the recent industry cloud event VMworld 2010, a massive conference held by VMware the leader in virtualization, there were many claims on who is # 1 in virtualization. The most debated contest was in the storage market for virtualized environments or VMware environments. At the event EMC even hung a huge banner on the show floor stating that EMC was #1. That claim was instantly refuted by NetApp. Now validated by two industry research firms Enterprise Strategy Group (ESG), and Wikibon.org. Recent data from two old school firms (ESG and IDC) and one new school firm (Wikibon.org) essentially add up to this conclusion.

Who’s #1 in Storage Virtualization for VMware?

A few weeks ago Enterprise Strategy Group (ESG), a market research firm specializing in storage, put out a report claiming that EMC was #1. ESG recently released information to suggest that EMC, IBM, HP and Dell have established leadership in storage within VMware accounts. EMC is cited by about 40% of those surveyed as the primary storage infrastructure vendor. Many in the industry including NetApp were suspect of the ESG report. In a conversation with Dave Vellante, cofounder of Wikibon, he stated that he wanted to get more information from his community and other research firms.

Wikibon.org, a crowdsourced industry research firm, affirmed that claim highlighting with their own analysis based upon the ESG data. As a result Wikibon.org put out new information in a report that validated and crowns EMC as #1 storage shipments for VMware environments.

In a recent survey, ESG asked an interesting question about the primary storage vendor in VMware virtualization environments. It would be reasonable to expect that the storage vendor who is regarded as the primary storage vendor will increase market share over time. To our surprise, EMC leads the storage pack in VMware installations by a wide margin and is now claiming to be #1 in virtualization for storage shipments in VMware environments. At VMworld 2010, the company prominently displayed several banners making this claim.

The Wikibon report takes two sets of data ESG and IDG to yield their analysis.

Here is a clip from the Wikibon report

We wanted to try to take the ESG data one step further and attempt to project actual share data and penetration rates within VMware environments.

The results of the ESG survey may actually be a reasonable proxy for penetration rates in VMware shops. The following analysis looks at two sets of data, including ESG survey data and IDC marketshare figures. We essentially mashed the two together, making sensible adjustments and identifying caveats in the conclusions. The data analysis suggests that our initial premise – which stated that EMC would likely lose share in VMware environments – was incorrect. Specifically, while EMC’s overall storage marketshare is 26% worldwide, in VMware its share jumps to nearly 34%, far ahead of other suppliers. Based on this new data, our assessment is that EMC is probably increasing its penetration in VMware environments and is very well positioned to gain share as VMware grows.

We believe EMC’s success in virtualization generally and VMware specifically is due to three primary factors, including:

1. EMC’s investment in VMware integration across its very wide and deep storage portfolio;
2. EMC’s majority ownership in VMware gives the company huge incentives to find strategic and tactical advantages in VMware environments;
3. As virtualization penetration increases, I/O becomes more critical – EMC is the low risk choice for customers.

My ANGLE: What does this mean

My angle on this is that EMC, a big company, is investing heavily in VMware. It’s important to note that EMC owns 80% of VMware. Therefore, it’s no surprise that EMC is leading. This research also clearly establishes EMC as the clear leader both in market share and the role of being enterprises primary storage vendor in virtualization environments.

EMC has their “you know what” together. NetApp won’t let them take this quietly. I’m expecting a big fight from NetApp and other vendors like Hitachi Data Systems who compete effectively in VMware environments but don’t have the share EMC has (based upon this new data).

I’ve been following EMC for years and most recently at EMCWorld in Boston where we held our SiliconANGLE.tv theCube broadcast (which EMC supported financially). That being said, EMC is a changing company and culture. Just listen to Joe Tucci and Pat Gelsinger on the subject.

Watch live video from The Cube LIVE from SAPphire on Justin.tv

The Big Picture – Storage is key to Cloud

The bigger picture that is at play here is the changing role in storage. Last year we called storage the “linchpin” for cloud. We were correct. Storage architecture is being disrupted the most due to the increasing changes in the role of data. Additionally, the mobile environment and always on access by users/consumers is forcing the providers of IT services to change from old slow moving and fast nimble service centers. Applications and data are the key disruptive enablers for this new network environment.

Last year storage was key and earlier in the year we said “Storage was Sexy”. After that call the industry went on a huge M&A run. Now we will see increased competition and new product introductions around this new network architecture with virtualization at the center – aka Cloud.

It’s all going to be about proof points not hype as top enterprises and service providers start changing their underlying infrastructures and application platforms.

Update: Based upon feedback from the community and clarification from Wikibon.org I changed the title of the blog post. The correction is EMC is #1 in penetration into VMware installations, but not in virtualized storage controllers/arrays.