According to a post on her corporate blog, Cisco’s senior vice president of the Data Center, Switching and Security Technology Group, Jayshree Ullal, is leaving the company after 15 years. Bloomberg reports that Senior Vice President, Internet Systems Business Unit John McCool will be taking over Ullal’s position, as well as her role in an advisory group to Cisco CEO John Chambers.

I’ve spoken with Ullal only once, in a Q&A after the bizarre NeoPath affair. She discussed Cisco’s plans to meld the file virtualization product it immediately discontinued into its data center virtualization products, making file virtualization a network service. Will that come about? It remains unclear, and the media-savvy Ullal would not put a time frame on it in our interview.

It’ll be interesting to see where the influential Ullal ends up. The only clue she gives in her blog is that she hopes “to re-kindle passions” for her next new gig this summer and then decide. Hard to tell right now if there’s a deeper story here, but it may be worth noting, as Bloomberg does:

Ullal’s departure follows the December resignation of Chief Development Officer Charles Giancarlo, who quit to join private-equity firm Silver Lake. Mike Volpi, a senior vice president who left in February 2007, became CEO of Internet television provider Joost in June.

Cisco fell 21 cents to $25.49 today on the Nasdaq Stock Market. The shares have dropped 5.8 percent this year.

I need to start a category on this blog called “Vendorfights.” Today’s squabble comes from two e-discovery players. In this corner: Kazeon, which recently announced that they can do your data collection work for the price of a latte. In this corner: Clearwell, whose corporate blogger responded to that with snark:

The answer (in press releases, as in politics) lies in definitions. Exactly what sort of processing would you be getting for your four dollars and change?

You’ll have to ask Kazeon to get the answer to that one, but give a venti latte to a bleary-eyed e-discovery service provider who’s just pulled an all-nighter preparing for a meet-and-confer, and they’ll tell you all about the nuances, complexities, and risks inherent in e-discovery processing that may be difficult for enterprise search/information lifecycle management vendors to grasp.

I found out about this from a Kazeon rep (despite how severely Clearwell dissed his them). To the contrary, Kazeon sees this as the start of a price war in this space as competitors flood in.

Another e-discovery blogger (Who knew there were so many?) agrees:

Any way you crunch the numbers, position the cost or spin the offering, it is just flat alarming and bordering on unbelievable for both users and technology vendors in the eDiscovery market. Bottom line, whether or not you believe that Kazeon is comparing true eDiscovery apples with the rest of the apples in the market, it doesn’t matter as this is definitely the first shot across the bow of the rest of the eDiscovery vendors..

It’s a draw for me so far, being new to this debate. What do YOU think?

Isilon had mixed financial results last quarter, reporting higher revenue ($24.1 million) than expected while losing more money ($10.1 million) than in any quarter last year. But the most important item on Isilon’s scoreboard these days doesn’t have a hard number affixed to it. That’s confidence among customers and investors.

People clearly lost confidence in Isilon during its 2007 struggles, and they haven’t yet regained it. Isilon CEO Sujal Patel said there were “headwinds” that prevented Isilon from picking up more new customers last quarter. These headwinds came from Isilon’s financial restatement followed by an audit report of questionable sales practices last year. Fortunately for Isilon, it picked up more sales in repeat orders from customers already in the fold last quarter than in any previous quarter.

“Headwinds had some impact, raising uncertainty in customers’ minds,” Patel said. “And some of our competitors may have used it against us as a competitive advantage.”

Patel said these headwinds will “take some time to dissipate,” which means he expects them to continue at least for another quarter.

Winning back confidence among investors will likely take even longer. Although operating expenses declined, Isilon remains a long way from turning a profit. And Isilon executives still refuse to give guidance for this quarter or this year, giving the impression that even they lack confidence in their ability to execute.

“Due to the lack of clarity on the forward business model, current investor sentiment remains subdued,” analyst Tom Curlin of RBC Capital Markets wrote in a note to clients today. “We expect sentiment to remain subdued pending evidence of improving execution in the coming quarters.”

Patel pledged to continue to upgrade Isilon’s clustered storage systems, promising major upgrades this year. Isilon can use any product edge it could get with Hewlett-Packard and EMC jumping into the clustered storage game and NetApp pushing to integrate its OnTap GX clustered file system into its regular OnTap operating system.

Overall, Patel he said he was encouraged by the quarter. “Although it’s still early days, I view this as an important step in our path to profitability.” Investors weren’t quite as enthusiastic, although Isilon’s share price rose $0.08 to $4.85 today.

While it might seem like we’re about to change our site name to SearchWANOptimizationVendorsFighting.com, I assure you it’s just coincidence. Riverbed and its rivals have had a lot to say lately, and that’s at least in part because of greater competition in their market space, though it’s not getting as much play as other hot markets like SaaS and clustered NAS.

According to Forrester analyst Rob Whiteley, with whom I’ve spoken during the whole Riverbed/AutoCAD debacle, the one incontrovertible point that can be taken out of all the back and forth is that users can no longer just evaluate this gear on price. WAN optimization and wide-area data services have become more strategic markets than when they started, and there’s going to be more fine-grained differentiation between products in this space going forward.

Another trend in this market was identified by Blue Coat’s CEO as well as Brocade officials when speaking about the acquisition of Packeteer and Brocade’s discontinuation of WAFS products, respectively. That is that WAN optimization is growing to encompass a number of fields originally thought of as separate disciplines, whether it’s WAFS being combined with network security or TCP/IP acceleration meeting quality of service. As Brocade’s spokesperson put it, “the WAFS and WAN optimization markets are converging and our customers are looking for a much broader set of functionality beyond just WAFS for remote site IT management.”

Sensing this, it would seem, Riverbed has chosen to partner with other companies to expand its capabilities. It disclosed in February that it would be adding the Riverbed Services Platform (RSP) of services for remote offices on its Steelhead appliances, and this week added network optimization services to the RSP platform. Riverbed’s latest additions are what it calls new “visibility partners” to broaden Steelhead’s WAN optimization features. Partners supplying network visibility features such as traffic monitoring, application performance monitoring and policy enforcement include Opnet, CompuWare, NetScout, Solar Winds and Opsware.

The Steelhead central management console (CMC) was also brushed up with the release of version 5.0 this week. Despite the dot-oh, it’s an incremental upgrade with the addition of the ability to create groups of appliances for policy envforcement and more granular access control roles.

Riverbed’s Alan Saldich pointed out that Riverbed’s going the partnering route because customers might already have another product they want to use with Riverbed. This could be seen as a subtle comment on Blue Coat’s plans for Packeteer, which consist of folding Packeteer’s IP into a platform existing Packeteer customers may not be familiar with. Of course it will remain to be seen which approach will win, but this new, wider context for WAN optimization is something users should consider. If they can hear themselves think over all the bickering, that is.

So I come back from a day off and what do I find? IBM and Google, Sun and Amazon reportedly pairing up in the cloud.

I have to say that cloud computing has made the growing IBM/EMC rivalry that much more interesting. EMC threw one of the first punches with the rollout of Fortress and acquisition of Pi–it seems EMC will probably stick to building its own infrastructure rather than partnering. But then IBM went for a partnership with one of the other most recognizable brand names in the world (aside from its own) in Google, which consumers are already comfortable using in the real world. Meanwhile, PiWorx remains in stealth. It will be interesting to see where the next leapfrog move comes from.

Incidentally, how long before Sun acquires Zmanda? They’ve already acquired MySQL, for which Zmanda offers open-source backup and now they’re buddying up with Amazon, for which Zmanda offers an interface (Amazon still requires you to roll your own GUI or get one from a partner). It could link Sun’s open storage products–via open source software!–to the cloud with Amazon. It would be just one big happy open-source conflagration…I’m still watching for it.

Meanwhile, the other tizzy lighting up my Google Reader is over the lack of a deal between Microsoft and Yahoo. Rob Enderle has an interesting post up on Google’s role in that situation. I’m wondering, as IT and cloud vendors keep pairing up, if we shouldn’t be looking for familiar faces among those next in line to be Yahoo’s dance partner.

When Sun revealed its open source storage push this week, some industry observers wondered about its business model. In other words, how can Sun make money on open source storage products?
Then Sun reported its earnings Thursday night, and it became clear that its storage business isn’t exactly rolling in dough these days anyway.

Sun’s storage products generated $530 million in revenue last quarter, down 5.4 percent from a year ago and $100 million short of its target. Big-ticket items such as tape libraries and high-end disk systems were down in a quarter in which EMC and IBM reported increases. Server revenue also fell short by $100 million, making it a disastrous period for the new combined servers and storage unit.

Overall, Sun lost $34 million in the quarter compared to a profit of $67 million the year before. On the earnings call, Sun execs said they would be restructuring to the tune of 1,500 to 2,500 layoffs.

Can open source save this sinking ship? Sun CEO Jonathan Schwartz seems to think so. Open source was a common theme of his earnings call, with open storage getting its share of attention with statements such as: “We have a great variety of new Open Storage innovations [entering] the market within the next few quarters.”

Schwartz didn’t talk much about how Sun will make money on open storage, except to emphasize that Sun would save money on R&D by having a common open platform for all of its servers and storage systems. Layoffs are expected to save Sun $100 million to $150 million a year, although it’s not clear how much of the reduction will be in storage.

It remains to be seen what the quality of open storage products will be, but Sun has little to lose. It’s tried a lot of things over the years to jumpstart storage sales, including paying $4.1 billion for tape library market leader StorageTek, and nothing has worked. Sun OEMs systems from Hitachi Data Systems, LSI and Dot Hill, and usually has less success than other vendors who sell the same systems. For a while Sun planned its storage future around the 6920 midrange system, which it billed as a virtualization product and an EMC Clariion killer. Customers yawned, and Sun sold the technology to HDS last year.

Now its storage plans revolve around a large DAS system called Thumper and open source software. Considering its track record, things can’t get much worse, can they?

John Thompson must have known the question was coming. The Symantec CEO certainly heard the rumors. So when he was asked Wednesday night during his company’s earnings conference call about selling off parts of his company, Thompson couldn’t have been clearer.

“Contrary to popular rumor, we have no plans to divest of anything,” he said. “None.”

The rumors mainly involved the storage products that Symantec acquired from Veritas three years ago. And they were widely circulated. According to an Associated Press earnings preview story that ran this week:

Analysts are particularly interested in the possible sales of backup and recovery software product NetBackup and the company’s non-Windows Data Center Foundation, which comprises of storage and server management products.

Several technology bellwethers, including IBM, Hewlett-Packard and EMC have been named as potential buyers for Symantec’s storage products, including NetBackup.

AP could have added two other bellwethers who have been mentioned as suitors of all or some of the Symantec storage products - Oracle and Microsoft.

From the tone of Thompson’s voice when he answered the question, he’s not happy with the rumors. Yet Symantec is at least partially to blame. There have been frequent reorganizations since it bought Veritas, usually accompanied by layoffs. Symantec admitted a large layoff in April but would not give details. This left the door open for scared Symantec employees, disgruntled former employees and opportunistic competitors to attempt to fill in the details. And Symantec execs have talked about getting rid of poor performing units on previous earnings calls.

But Wednesday’s call was upbeat. Symantec reported outstanding results all around, and storage was front and center. Email archiving, backup, and storage management were among the product segments that posted double-digit year over year growth. Thompson and COO Enrique Salem talked of a bright future for Net Backup 6.5, Backup Exec 12, and Storage Foundation. They emphasized Symantec’s encryption and virtualization capabilities and gushed about three hot storage areas where Symantec has hardly been a pioneer: data deduplication, continuous data protection and software as a service (SaaS).

Symantec’s earnings were impressive in current economic conditions, although with 53 percent of its revenue from international sales, it took advantage of favorable foreign exchange rates against the dollar. Symantec gained share from its major rival EMC on the backup front, with 11 percent year-over-year growth compared to EMC’s 8 percent growth.

The question now is whether the strong storage performance will prompt Symante execs to forget about spinning off any pieces, or will it only add to the value of a possible sale? Thompson’s take is nothing is for sale. Despite what you might have heard.

Hardly a day goes by without a new storage service rolling out. On Monday, it was IBM’s turn to launch two storage services as part of its portfolio of services for midsized customers - organizations with 100 to 400 employees and a handful of Windows servers.

The interesting thing about IBM’s Remote Data Protection Express and E-Mail Management Express offerings is they are the first new services IBM has launched from its Arsenal Digital Solutions acquisition in December. The Arsenal brand is gone but the remote data protection service is the same one that Arsenal offered, even still including data deduplication from EMC’s Avamar.

The email archiving service is something Arsenal was working on at the time of the acquisition, pushed to market quicker with IBM technology.

“Email management is a new offering [for Arsenal],” said Arsenal alum Brian Reagan, now an IBM Information Protection Services executive. “Under the covers we’ve started to adopt and integrate more IBM offerings.”

The email service covers Exchange and Lotus Notes, and Reagan said database and unstructured data archiving services are in the works.

Since Arsenal was into managed storage services long before anybody talked of clouds and SaaS (software as a service), I asked Reagan if he thought IBM should have kept the Arsenal brand. He said Arsenal did have a name for itself and partnerships with AT&T and other large providers, but IBM is a pretty recognizable name too.

“We get the benefit of IBM’s brand,” he said. “As Arsenal, we would have to spend twice as much money to get the attention of customers because they didn’t know who we were.” Reagan pointed out that IBM ran advertisements for its services during the PGA Masters broadcast. “That was something Arsenal could only dream of,” Reagan added.

Then again, you don’t have to be IBM to attract attention for storage services these days. Everybody’s getting into the cloud act, and Reagan says the glut of offerings have served mostly to confuse customers.

“There’s a tremendous amount of customer interest,” he said. “The downside is, it’s created confusion. Some of the really low end players that only service the consumer end of the market have clouded the picture. They’ve confused people wondering what the difference is between low end service that’s priced too good to be true and real resilient service.”

In other words, it will take awhile before enough sun shines on cloud computing so we can really know what to expect.

 In a bit of a Friday surprise, storage systems vendor Nexsan Technologies today filed for an initial public offering (IPO) with the SEC.

The move is surprising not because of Nexsan’s financial situation, but because storage IPOs are so 2007.  IPOs in general are down this year with Wall St. fearing recession and waiting to see if the problems financial services firms are having spread to other sectors.

On the storage front, no company has gone public since 3Par last November. NAS vendor BlueArc and consultant firm Glass House Technologies filed for IPOs late last year but neither appears close to actually going public. Neither company has updated their S-1 filings with their latest earnings, which suggests they’re in no hurry to test the market.

Financial analysts and other industry sources say companies such as DataDirect Networks, Copan, and LeftHand Networks are eager to go public and probably would have filed by now if market conditions were better.

But Nexsan is brave enough - if brave is the word - to give it a shot. The systems vendor that specializes in SATA arrays for archiving probably isn’t as well positioned as some of the above mentioned vendors. Nexsan lost $3 million on revenue of $49.8 million for the year that ended June 30, 2007, and dropped another $2.3 million on $30 million in revenue during the last six months of last year. According to its filing, Nexsa has lost a total of $35.1 million.

Histories of losses haven’t stopped other storage companies from going public. Those that took the plunge in 2006 and 2007 - 3Par, CommVault, Compellent, Data Domain, Double-Take, Isilon, and Riverbed - had a quarter of profit at the most and almost all of them had never recorded a profitable quarter before their IPO. The same goes for EqualLogic, which had its IPO short-circuited by a $1.4 billion acquisition offer from Dell.

And while Nexan’s finances don’t look much different than those of Compellent’s or Isilon’s before they went public, at least there was a bullish IPO market when Compellent and Isilon went out.

So Nexsan’s progress deserves keeping an eye on. If they do make it public for a decent price, it could spark another rush like the storage market saw in 2006 that lasted until late 2007.

IBM’s acquisition of Diligent Technologies today will alter several relationships of major vendors as they look to add data deduplication to their VTLs.

Until now, IBM’s VTL partner was FalconStor while Diligent supplies Hitachi Data Systems and Overland Storage. IBM and HDS say they’re still ommitted to HDS selling Diligent’s ProtecTier software even though it’s now owned by IBM.

“We don’t’ see any change with Diligent, the agreements we’ve had with them will continue,” HDS CTO Hu Yoshida said today. He compared the situation to EMC buying VMware. “VMware works well for us, we drive a lot of business from VMware,” he said. “This is a new world, we’re in an era of coopetition.”

Still, you don’t have to squint hard when reading the statement HDS issued today to see plenty of wiggle room:

The ProtecTIER software from Diligent Technologies offers very tailored data de-duplication technology that addresses only a fraction of the overall business continuity and disaster recovery capabilities that our customers require. This product comprises a single component of the broader portfolio of market-leading back-up and data protection solutions that Hitachi Data Systems offers its customers.

In other words, HDS is saying it could get by fine without ProtectTier. Where else can HDS go if it wants to switch? FalconStor is certainly available now that IBM has Diligent and EMC is partnered with Quantum for dedupe. Sun and Copan sell FalconStor dedupe software, but Sun and Copan don’t exactly equate to EMC and IBM for disk backup market share. There’s also Sepaton, which has a VTL OEM deal with Hewlett-Packard — although HP has yet to offer Sepaton’s dedupe software.

One dedupe vendor not looking for an OEM partner is Data Domain, which rode deduplication backup products from stealth to IPO in four years and is generally considered the dedupe market leader. Data Domain CEO Frank Slootman says his channel partners wouldn’t appreciate competition from OEMs.

“That’s a decision you have to make early on as a company,” Slootman said. “If you start off as a channel company like we are, it’s difficult to run an OEM model right alongside it because they are incompatible. OEM usually means death to your channel.”