I work hard to be a positive person, but lately the headlines are blocking my optimism. Here’s a sampling of the past three months.

“NetApp Unleashes Dividend as Profit Falls 4%”

“NetApp to Lay off 900”

“IBM Gets Ready to Push more UK and Irish Bods Overboard”

“IBM 1Q net income slips, results miss expectations”

“EMC, VMware dangle axe over 1,804 workers around the planet”

“VMware Q1 Results Beat Estimates, But Shares Tumble on Outlook”

“Dell Sheds VMware in Channel IaaS push”

“Dell Profit Dives as billionaire battle rages on”‘

“HP’s Slump Deepens in Q2 as earnings fall 32 percent”

“HP Halfway through restructuring, 15K layoffs to go”


What is going on?

There are many trends at work, including global macro-economics and sequestration, and I’m not an economist, so I’m not equipped to talk about those.

But I can read earnings calls, talk to technology salespeople, and try to connect the dots. I’m not an economist or even an analyst, so take what I say with a grain of salt.

1. Virtualization and cloud are disrupting incumbents. I remember, when x86 virtualization emerged, that vendors worried about server unit volumes, fearing that organizations would stop buying physical servers. Slowly but surely, that’s happening. Dell trumpets share gains, but they’re mostly taking share from HP and IBM — not finding market growth. Market growth seems to be happening outside the incumbents, likely in open systems going into cloud farms.

2. Organizations are investing less in mid-range primary storage, backup, and archive. SSD and server-side flash cache enables performance gains which in the past required dozens or hundreds of added spindles, 4TB drives boosted capacities, and autotiering is getting in the way of standalone archive platforms. Backup to the cloud is progressing nicely.

3. Businesses are pursuing incremental gains instead of transformation because they’re becoming more risk averse. They’re using the cloud to augment and extend their capabilities. They’re slowrolling new operating system deployments. They’re trying new technologies on the edge instead of the core.Test/dev cycles seem to be taking longer.

4. Overall, there’s a new emphasis on value and customers are going deeper on features and price, spending more time on due diligence  and being less knee-jerk about pulling the trigger. Vendors with weird licensing structures, overpriced drives, or mandatory services seem to be moving more slowly and/or losing deals.

5. A subset of the market still values disruptive technology, which is why there are so many small storage companies growing and thriving in the shadow of EMC, NetApp, and HP.