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SANDIAL COUNTS ON 'BACKBONE' STRATEGY TO DISRUPT STO MARKET
By Simon Robinson for the 451.com

Depending on your view of how the storage networking market is set to evolve over the next couple of years, the timing of Sandial Systems' emergence from stealth mode this week either couldn't have been better or couldn't have been worse.

Impact assessment

The message

Sandial has emerged from stealth mode this week with a storage 'backbone' device that it hopes will disrupt the market with a new set of economies and efficiencies.

Competitive landscape

It's a highly competitive market, and Sandial faces a challenge in getting its message heard above the noise. Besides incumbents Brocade, Cisco and McData, emerging players include Sun as well as fellow startups such as Maranti, Maxxan and Candera.

The451 assessment

Sandial has an idealistic view of how the storage market should operate, and hopes to exert an influence to elevate the storage network into a more strategic entity. It's a sound idea, but it's not going to be able to do it alone. Getting OEMs and software partners to buy into its philosophy will be extremely challenging, but as startups go, Sandial is in good shape to tackle that challenge head-on.

Context

Sandial was formed in 2000 by a group of executives with a wealth of experience in the networking and connectivity markets. Its initial plan was to jump on the bandwagon with a datacenter optical switch, but it jettisoned that idea 15 months ago when it became obvious that optics were not going to win the game. It also got rid of its original name, Malachite Technologies -- named after a self-healing stone -- on the grounds that it was too difficult to remember.

The company hired Tim Lieto as president and CEO late last year. Lieto was VP of North American sales at Chipcom and previously served sales stints with Data General, Prominet and Lucent. He was also head of sales at failed high-end storage startup Cereva Networks.

The company has raised $55m in two rounds, the latest of which was secured in March 2003. It expects a final round at the end of the year to take it to profitability. The lead investor is Prism Venture Partners, with contributions from Oak Hill Venture Partners, Bessemer Venture Partners and DB Capital Partners.

Strategy

Sandial believes back-end connectivity remains the networking equivalent of the Wild West. Incumbent vendors are vulnerable because their products are based on fifth- or sixth-generation architectures. These, Sandial says, won't scale to meet the rapidly growing requirements of the large storage networks that organizations are now deploying.

Furthermore, 'holy grail' technologies such as storage virtualization have so far failed to strike a chord with organizations as a way of aligning the storage environment with the application environment. Consequently, storage networks remains an unintelligent 'black box' barrier between applications aligned with business priorities and application-aware storage arrays. The way to address this is to design the network as a utility from the ground up, with each component given the ability to meet specific business goals.

Products

Accordingly, Sandial says its initial product represents the industry's first intelligent 'backbone' switch. Backbone, it says, because it provides the link between the application and storage environments through a 'connection-oriented' architecture, and intelligent because of its ability to dynamically route information requests through the SAN.

Assessing these claims is difficult, since Sandial isn't yet disclosing the product architecture. More details will be revealed when it reaches general availability at the end of June.

However, the offering will be aimed at the high end of the SAN market. Its modular, bladed architecture uses field-programmable gate arrays (FPGAs) -- instead of ASICs -- on each port. Switch port counts are expected to be in the multiple hundreds, although the company is not yet saying exactly how many. It supports all major connectivity standards, including fiber channel, FICON, iSCSI and GigE, and Sandial says it will soon be able to demonstrate industry-leading performance.

Sandial is pinning its hopes on a patent-pending feature it calls intelligent connection control to differentiate itself. The switch FPGAs employ traffic-shaping techniques to provision bandwidth on a policy basis for each connection. Current shared-memory approaches from the incumbents neglect the fact that different applications have different access requirements and provision bandwidth on a 'first-come, first-served' basis, Sandial says.

Pricing for the Backbone has yet to be disclosed, although we expect it to come in at $2,000-2,500 per port. Sandial is also working on a smaller edge device aimed at broadening its footprint. Additional software functionality will be provided by third parties, with backup, replication and data migration as priorities, so we expect the likes of Veritas and CA to be in the frame. The company also plans to add virtualization and other capabilities over time.

Business model

Sandial plans to spread its sales evenly across three channels in order to reduce its exposure to a single channel and establish direct touch with end users. It plans to secure two or three major OEM partners within the next 12 months, and is already doing joint field sales with an undisclosed tier-one storage systems vendor in the US, with which its products have already been certified as interoperable.

By working directly with its selected marquee accounts, Sandial says it can help organizations "drive the agenda" with OEMs, something it claims users have a limited ability to achieve today.

Sandial also plans to work with the services arms of targeted OEMs, which puts IBM Global Services, EMC and HP in its crosshairs. Finally, it plans to sell through systems integrators and VARs -- a route barely used by the incumbents -- to reach its target base of Global 2000 customers.

Significantly, Sandial already has some customers with products installed. One of these is the New Balance shoe firm. Its experience here is a textbook example of the way it believes storage infrastructures will be deployed in the future. Rather than starting with the storage and server, and using the network merely to connect the two, New Balance used Sandial's network backbone as the starting point, aligning every SAN design consideration to policies based on business objectives.

Such an approach will help organizations break from the cycle of developing disparate SAN 'islands' that eventually have to be connected together. The network is becoming more strategic, and it's crucial to get away from the mentality of buying SAN equipment as an afterthought, Sandial says. It's a valid notion, but the company needs to convince storage system vendors to adopt this approach; possibly at the expense of some disk sales.

Competition

Sandial is emerging from stealth at a time when activity in the 'intelligent' and super-size storage switch market is reaching a peak. That's good on one hand, since there's already plenty of buzz in the market, but the company will have to work hard to make its message stand out above the noise.

Of the major incumbents, Sandial will target Brocade's installed base most aggressively, since it sees the current market leader as the most vulnerable. Indeed, Sandial believes the current vendors have barely begun to scratch the surface of the total SAN market. Brocade's acquisition of Rhapsody Networks to get a foot in the intelligent switch market has only succeeded in confusing customers, Sandial claims, and Brocade is making a mess of explaining its integration strategy. Additionally, Brocade still doesn't have a credible super-size switch offering on its roadmap. That said, it currently has the OEM market sewn up.

Sandial claims Cisco's acquisition of Andiamo was a me-too play that isn't offering much over and above what's currently in the market. It also needs to sign up all the major OEMs to balance its books. Here too, Cisco is certainly making inroads: last week it added EMC to a list that already included IBM, HDS and HP.

Since Cisco and Brocade made their moves, McData has insisted its architecture is good enough to support both scale and intelligence in the future. However, there are strong rumors this week that it is in the process of acquiring storage switch startup Sanera, which is looking to address the storage networking issues in a similar way to Sandial. Other startups in the field include Candera, Maxxan and Maranti, while Sun acquired Pirus last year and CNT entered the market recently with its acquisition of Inrange.

Courtesy www.the451.com