In this episode of Infrastructure Matters, hosts Camberley Bates, Steven Dickens and Krista Macomber share their Mainframe perspectives, along with insights on the latest announcements from NetApp and SK Hynix.
Key topics include:
- A look at the recent SHARE event in Orlando, Florida and what’s new in the Mainframe space
- Broadcom’s announcement around their Watchtower capability
- The latest announcements from NetApp, including their autonomous ransomware protection (ARP) feature and how AI and ML are driving attack detection capabilities
- SK Hynix’s $1B memory investment
- Nutanix’s announcement around D2iQ’s Kubernetes Platform (DKP)
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Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this webcast. The author does not hold any equity positions with any company mentioned in this webcast.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Transcript:
Steven Dickens: Hello and welcome to another episode of Infrastructure Matters. I’m joined as always by my co-hosts, Camberley Bates and Krista Macomber. And Camberley, you finally got the memo about the vest for today. Come on-
Camberley Bates: There’s no reason why you can, because I only show up in cheerleader outfits once a month or something like that so you never know.
Steven Dickens: Come on, show the listeners that you’ve got the logo close to your heart.
Camberley Bates: On the right side. Okay. I’m just making sure it’s on the right side. All right, let’s go.
Steven Dickens: True, let’s go. Enough of the goofing around and picking on Camberley. Let’s get into it. We’ve got a packed show this week. I’ve been going and doing my mainframe nerd and geekiness and hanging out with that community, so we’ll cover that. We’ve got NetApp, SK Hynix, Nutanix. We’ve got some earnings perspective now we’ve gone through a bunch of the cycles, so do you want me to go first or what do you want to do? Do you want to go to you Camberley, or how do you want to play it?
Camberley Bates: Well go geek out. Let’s talk mainframe.
Steven Dickens: Yeah. So I got to service my passion for all things Big Blue and Big Iron this week. So basically twice a year there’s a big mainframe conference called SHARE. They run it in different locations. We had the spring one this past week, couple of thousand mainframe practitioners and all of the vendors. So a couple of big announcements that stood out for me and I’ve got coverage notes in the works. IBM announced the z/OS container platform, which I think is fascinating. Not many people would put… So if you think of Red Hat and OpenShift container platform on top of it, this is the same structure. So you’ve got the z/OS operating system and then open container platform sitting on top of it.
So I think the key takeaway for me is the core mainframe z/OS development team. And I met with the director who runs that development team, four year effort, hundreds of packages from the open source community ported, upstreaming those and being a good citizen to the community really shows that the mainframe operating system, which I think many people would think, “Hey, are they really putting any R&D into that or is it just a cash cow for IBM?” Absolutely not. Hard engineering work, thousands of man-hours. And I’ve got that question to find into the team to get the full debrief. But they ran me through that on Wednesday, really fantastic piece of engineering.
Camberley Bates: Awesome.
Steven Dickens: And then the other piece was an announcement from Broadcom around their Watchtower capability. This is bringing open telemetry to the mainframe. So there’s been a lot of work within the open source community attached to the mainframe and the Open Mainframe Project about bringing Otel from an observability perspective and really being able to connect that mainframe into a Splunk, into a Datadog, a Dynatrace, a LogicMonitor, whoever it is from an overall observability platform, but being able to plug that mainframe in. So what Broadcom’s done is put this horizontal layer in place that enables all their tools and anybody’s tools with an open API to connect into this Watchtower platform that really provides a single management interface. And then you can connect that up into a hotel compliant observability platform. So again, fantastic.
I think the key takeaway for me was we hear a lot about Broadcom buying software companies and not investing in the software. This is counter-narrative to that for me, their hard R&D investment by Greg Locke and his team into developing this functionality and they’re not making it chargeable. Anybody who’s got the supporting products gets this set of features as part of their entitlement. So lots of counter narrative to what we hear around Broadcom, VMware not investing in software and then charging more for it. This goes against that whole message for me.
So I think it is obviously good value add for the mainframe team, but also directionally gives you some perspective on where Hock and the wider leadership team heads when they think about long-term strategy for a software business that Broadcom acquires. We’re five years into now CA being part of Broadcom. So they’re continuing to invest and continuing to bring value to their clients. So good takeaways for me I think and lots of good stuff.
Camberley Bates: Yeah, question on SHARE, how big it is, the conferences?
Steven Dickens: You’ve probably got, I would say 50 exhibitors and a couple of thousand attendees. And these are all mainframe practitioners from Citibank, Wells Fargo, Barclays, all of these types of accounts.
Camberley Bates: And has that changed in size at all over the last, I know Covid, everybody disappeared, but-
Steven Dickens: They’re back. So I did an interview with the SHARE president Scott Fagen and asked him that exact question. They are back to pre-2020 levels, so they’re back to where they were in 2019.
Camberley Bates: I’m just wondering if anything is picking up at all as we get to the balancing of it. It’s rare to have new implementations of mainframe. It’s mostly a turn of the crank to go to the next mainframe, but I would think that this podcast would influence purchases.
Steven Dickens: I mean, the other thing-
Camberley Bates: We talk about it so much.
Steven Dickens: Well, yeah, you would think so. I mean the other big news was obviously we did some research for IBM, Broadcom and 21CS that launched with some of the highlights in an IBM press release. They announced the Skills Council this week to focus on mainframe skills, a really good community effort to bring together a number of the mainframe vendors to collaborate around skills. Our research was featured in a press release, you should see the final report from us in a couple of weeks time.
Camberley Bates: So I actually had to laugh because Randy was cleaning out part of his office and he had an Assembler book. And so I was offering it to John Fellows who’s on our lab team. He’s like, “Here, do you want the Assembler book? People still need to know how to go to Assembler.”
Steven Dickens: Yeah, I mean that whole space is, there’s a lot more… I’ve been going to SHARE now for far too many years and the demographic has changed. There’s a lot of fresh new faces, a lot of college kids. I was talking with one of the DevOps leaders from BMC and it makes no sense to me why you would go and get a job as a job, a developer in a games company and earn this amount of money or go and be a Cobalt developer for a big bank and earn three x the amount of money.
Camberley Bates: Absolutely. I mean, it’s a very, very strong position. And I’ve got a good friend of ours that is here in Colorado, that’s what he does. He does mainframe and it’s just one… He’s a consultant and that’s all he does and he just cranks it out. So anyway, really cool. Love it.
Steven Dickens: So lots of geekiness, some coverage from me coming out that’s already in the works. So let’s go. Who’s picking up NetApp from you two? Is that you, Camberley?
Camberley Bates: No, it’s actually Krista. This is a huge cybersecurity rollout that they had, so she was covering it.
Krista Macomber: They did. And this one was fun to cover. We’ve been tracking NetApp’s cybersecurity strategy fairly closely, especially over the past year or so. Last year they actually launched a data services division that is really in large part helping to drive this charge when we think about, for example, software capabilities to control immutability or to help to drive recovery. And so there were a number of announcements, we’ll actually link to the research note that we did that has all of them. But there’s a couple that I did want to walk through. And the first is, so NetApp has a feature called autonomous ransomware protection, ARP. And what this is, it’s machine learning, AI driven, really attack detection capability. And one thing that’s interesting for NetApp is that they’ve actually embedded that directly into their operating system on tap.
So we think about the production storage that they’re shipping, it’s all being shipped with this capability. And so they’re saying that plus some of their new licensing has really helped to drive adoption. They’ve updated the capability and what they’ve done is they’ve actually added new potential threat vectors to look at and new logic detection as well.
A couple of things that they talked about with us were the ability to detect when headers or specific content has been manipulated or if metadata has been manipulated, as well as the ability to detect partial encryption of files. And to me that’s very important because we are seeing that for ransomware attacks, they certainly are becoming more sophisticated. It’s no longer just this blunt, we’re going to go ahead and encrypt this entire storage volume. They’re having some of these drips and drafts, for example, like the partial file encryption.
They talk about having more than 99%, both precision and recall is the language that they use. So that is the ability to accurately detect an attack, excuse me, and also the ability to detect all the attacks that are occurring. So obviously that’s important, especially helping to avoid alert fatigue and potential false positives. So that was one thing from the announcement that I wanted to touch on.
And then another one that I wanted to touch on that’s actually in public preview is they call it their resware recovery capability through BlueXP, which is their cloud management portal. And so what this is going to do is it’s going to be able to look at the data stores and uncover if workloads are potentially at risk. And from there it can automatically recommend policies, automatically apply policies and really the ability to look at that environment and provide that guidance and some automated action as well. I think that’s important because it’s more and more important to make sure that there are no blind spots in the environment and to make sure that everything is protected, especially as attackers are continuing to innovate with all of these different approaches for attacks.
So that’s a very difficult job for IT obviously to be able to keep up with. So again, the ability to have that automated identification and applying policies I think is really important. Again, we’ll link to the full research note, but those were a couple of things to me that were more headlining.
Steven Dickens: So I know you cover this space more than I do. I suppose the takeaway for me is NetApp is unique in how they’re investing in this type of deep security stuff from, I tag NetApp as a storage vendor. Are you seeing them uniquely innovating in this space versus other storage vendors or am I thinking about that the right way?
Krista Macomber: Yeah, I mean to me I think it is pretty unique that we look at them primarily as that production or primary storage vendor. And so I think the fact that they’re trying to really bake that inasmuch as possible is important. When we get to recovery, they are going to play a very specific role there because it is going to be primarily based on snapshots that sit on the storage array as opposed to your data backups that are going to sit on your production storage infrastructure. So that is a delineation and they do have a specific role to play here. But yes, I mean I would see it as a pretty unique approach from that perspective.
Camberley Bates: One of the areas that I would point out here, correct me if I’m misrepresenting this, but the uniqueness on this piece on the primary storage about where they’re detecting 99% of whatever’s going on, it’s not just the alerting, it’s the fact that once they detect, they snapshot. That instant PAC, instantaneous stuff, they’re not asking… So what we’re doing is you’re putting in the machine here to do the action, to take the action that has to happen. So I’ve detected something, the machine has got confidence that it’s right, I’ve snapshotted it, I’ve got a point in time that I can recover. And that’s what makes this very, very different and unique. And this is what we’ve been talking about as well, is that we have to move into primary storage for protection. It can’t just be our data protection devices that are doing this. And I will expect others to follow suit here.
Krista Macomber: Absolutely.
Camberley Bates: And you see that coming out of IBM, IBM has been a leader with their FlashCore modules on doing their pieces of it that they’re doing. So this is all going to… We will all follow suit here. It’s just that how fast can we get there and how well is it done and how good is the training that’s done in there? And we did challenge that number quite a bit to them about how they could actually call that number because it’s unbelievable when you say that 99%. It appears that it is truly that number versus hyperbole or something like that.
Steven Dickens: Oh, good to see. Good to see. Yeah, I mean I think that’s a really interesting trend trying to bake that security actually into the storage operating system. I wasn’t aware of that, but that to me sounds directionally interesting and I agree if that takes hold, you’re going to see that ripple across the other vendors. So next up on our list is Skynix, am I saying that right?
Camberley Bates: No, you’re not. It’s SK Hynix.
Steven Dickens: Some CMO is turning in their grave as I butcher the name, so maybe correct me.
Camberley Bates: Is a very large memory company. They do primarily memory out of Korea. And I’ve started watching them a little bit more. Actually I started more because I’m on the data side. Why did I start watching them? Is because the memory side is becoming so important and memory is just now just another layer in the triangle of the data side of the house and the speed to the cold, the very, very fast. The fastest of course is going to be your memory, direct access memory. They do high bandwidth memory, they do the other kind of memory, et cetera. And what they announced this week was another billion dollars in chip packaging. And it’s like who cares about that really? And part of the caring about this is because they have this last quarter their DDR5, four times the amount of shipments there. Their high bandwidth memory, 3 was five times the shipments there. Why? It’s called AI again.
Talking about the servers. The servers are going to eat up the memory and the chip packaging is going to address more dense memory in terms of how we package. I mean the problem is that it’s getting so small now you’ve got all kinds of problems with noise going back and forth, et cetera. And so the chip packaging becomes very, very, very critical to what we’re going to be delivering over in the future years. So they’re working closely, they’re heavy, a lot of supply to Nvidia. They’re also a big supplier into phones as well. But I’m more interested in what’s going on in the enterprise.
The other thing that I’ll say about SK Hynix and the reason why I really started tracking them is because Intel at one point in time had solid state drives and that spun off when Gelsinger came on and that became a company called Solidyne and that Solidyne is owned by SK hynix and so that’s where the connection is. So if you look at their CEO, they’ve got a co-CEO. One was the former Intel person. The other one is from SK hynix. It was about a $9 billion spinoff that went over there. But that’s where I started tracking them and saying, okay, so this is really interesting. We’re going to be watching both of these companies as we go forward because we will see the uptick. We are already seeing the uptick on the memory, but we’ll also see the uptick on the data piece.
Steven Dickens: Well, that gives us a segue into the next piece that we wanted to cover. We’re post-earnings palooza now. Most of the companies have announced that we track in this space. I mean you were talking there about the connection to AI. I think the key takeaway from AI covered HBE earnings, AI shipments. I also spent some time with Kirk Skaugen from Lenovo on the day after earnings. I mean obviously anything with a GPU in it from Nvidia is hot cakes now and is selling out and there’s a huge inventory backlog of any server that’s good for AI. But I mean going the next level down, are you seeing that from a memory perspective as well, Camberley? I know you’ve got some perspective there.
Camberley Bates: Yes, we’ve seen the memory kick up. I think you said it, you said it last week. And I’ve used the phrase even though it’s like, I’m not sure I want to say that “Canary in the mine.”
Steven Dickens: Canary in the coal mine. Yeah.
Camberley Bates: The coal mine, it’s like, oh, I’m not sure I want to talk about this dying situation. But the canary in the coal mine basically you were saying with all those Nvidia GPUs going out that they got to reside someplace, they’re going to reside in the server. So we saw the servers just go up and even my husband said, “Who in the heck is Supermicro? Why is their stock taking off?” And it’s like, okay, let me explain what’s going on. It’s because their stock took off just like Dell’s stock has taken off because they’re shipping 40% or some number like that is increased to the number of AI servers that they’re shipping, et cetera. So that’s the first.
Then the other piece of this high bandwidth memory, at the end of March, I’ll be at the CXL conference MemCon talking about CXL. CXL is how we’re using PCIE to pool memory and to better utilize the memory that’s in the server. So we’re just starting to ship some of that technology. It’s not real yet, but it is going to be addressing another big piece of the problems that we have with these architectures that are going on and not enough memory.
And then the other piece that we’re going to see is the data side of the house. So that’s going to happen. We’re starting to see it already. Had a really interesting briefing with DDM this last week about where they’re at. They’re a unique company in the market. They’ve been in high performance computing forever, been one of the premier folks over there. They’re shipping like crazy. And they had what they shipped this last quarter for the AI space was more than they shipped all last year. And most of that is going into very large GPU farm companies. They’re not going into the enterprise right now. It’s going into the big GPU farm companies that are going up that are cloud offerings.
Steven Dickens: Yeah, I mean, I think the way I look at this is we’re almost in the first innings of a new super cycle. We had networking and connectivity was the first wave of the internet cycle. Then all the browser wars and all the other things happened after it. We’re starting to see that infrastructure get deployed for AI. We had mobile and all the infrastructure rollout for all the mobile apps and all the rest of, it’s 2007 onwards. For me, this is just the next hyper cycle starting and we’re starting to see that come through with all the layers in the stack. Obviously NVIDIA’s on a great run with where they’re at, but that’s now starting to come through to all the adjacencies we’re seeing in custom silicon. We’re seeing it in memory, we’re seeing it in software. All these adjacent areas around the GPU. We’re all just in the early cycle of that, the first innings of the hyper cycle for me. So it’s fascinating. And that’s now starting to reflect in earnings, which is where the rubber hits the road.
Camberley Bates: The other place it’s going to hit is that, and this came up with some of the conversations I had with some of the end user spaces where they’ve shipped a whole bunch of items and it hasn’t been deployed yet. I wouldn’t say it’s shelf ware, but it’s sitting there because they’re not sure what to do or how to do. And so we’re seeing consultants come in to help this. So where we see this lifting the boat, another boat is on the consulting side of the house. So we’re going to see folks like Wipro, Accenture, probably Kyndryl, those folks are going to be coming in to help these companies implement the systems.
One question said, “Really, is it not just the hype? Isn’t this just a hype?” And I said “No.” And the reason being is because other companies have figured out how to use this. They are implementing it in their operational space. They are getting their payback on this already. They are going to be able to re-look at their operational systems and reduce that cost. They’re going to have to figure it out as well. And in order to do that, if they don’t have the skills inside, they’re going to be hiring them out. So we have the consulting services that are going to rise up as well.
Steven Dickens: It’s across the whole stack. Final thing we’ve got here on the docket is Nutanix and the D2iQ announcement this week.
Camberley Bates: Yeah, so Nutanix, my peer Paul, he covers this space in terms of the Kubernetes, D2iq. Day 2 IQ used to be Mesosphere. They were picked up by Nutanix to be a Kubernetes platform with them.
Steven Dickens: Oh, good.
Camberley Bates: So it’s going to be sitting on a HV and offering it. What’s going to be interesting about this is they’ve got all kinds of partnerships with OpenShift and all the other guys that are out there, and now they’re bringing their own Kubernetes distribution in or just another distribution. So we’ll see how that’s going to balance out with their relationships there. There may be a little bit of tension, possibly. We’ll figure that out when we get the coupon and talk to the folks about where this is all going and what’s happening.
Steven Dickens: That’s only a couple of weeks away. I’m assuming we’ve got a briefing with those guys scheduled while we’re out there.
Camberley Bates: I believe we do. If not, we’re working on it.
Steven Dickens: We’ll report back. I know we’re recording an episode of this in person. We’re bringing Paul onto the show where we record. So I think unless there’s any other thematic topics, are we done for today?
Camberley Bates: I think we are.
Steven Dickens: I think we are. So you’ve been listening to the Infrastructure Matters podcast. This is episode 34. We’ve been doing this a while now. So please click and subscribe and do all those things to promote the show and make sure that other people get to watch it and we’ll see you next time. Thank you very much for watching and listening.
Other Insights from The Futurum Group:
NetApp Bolsters Cybersecurity Posture with Enhanced Solutions – The Futurum Group
Nutanix Expands Cloud-Native Portfolio with D2iQ’s Kubernetes Platform
The Intersection of AI and Threat Intelligence – The Six Five On the Road
Author Information
With a focus on data security, protection, and management, Krista has a particular focus on how these strategies play out in multi-cloud environments. She brings approximately 15 years of experience providing research and advisory services and creating thought leadership content. Her vantage point spans technology and vendor portfolio developments; customer buying behavior trends; and vendor ecosystems, go-to-market positioning, and business models. Her work has appeared in major publications including eWeek, TechTarget and The Register.
Prior to joining The Futurum Group, Krista led the data protection practice for Evaluator Group and the data center practice of analyst firm Technology Business Research. She also created articles, product analyses, and blogs on all things storage and data protection and management for analyst firm Storage Switzerland and led market intelligence initiatives for media company TechTarget.
Regarded as a luminary at the intersection of technology and business transformation, Steven Dickens is the Vice President and Practice Leader for Hybrid Cloud, Infrastructure, and Operations at The Futurum Group. With a distinguished track record as a Forbes contributor and a ranking among the Top 10 Analysts by ARInsights, Steven's unique vantage point enables him to chart the nexus between emergent technologies and disruptive innovation, offering unparalleled insights for global enterprises.
Steven's expertise spans a broad spectrum of technologies that drive modern enterprises. Notable among these are open source, hybrid cloud, mission-critical infrastructure, cryptocurrencies, blockchain, and FinTech innovation. His work is foundational in aligning the strategic imperatives of C-suite executives with the practical needs of end users and technology practitioners, serving as a catalyst for optimizing the return on technology investments.
Over the years, Steven has been an integral part of industry behemoths including Broadcom, Hewlett Packard Enterprise (HPE), and IBM. His exceptional ability to pioneer multi-hundred-million-dollar products and to lead global sales teams with revenues in the same echelon has consistently demonstrated his capability for high-impact leadership.
Steven serves as a thought leader in various technology consortiums. He was a founding board member and former Chairperson of the Open Mainframe Project, under the aegis of the Linux Foundation. His role as a Board Advisor continues to shape the advocacy for open source implementations of mainframe technologies.
Camberley brings over 25 years of executive experience leading sales and marketing teams at Fortune 500 firms. Before joining The Futurum Group, she led the Evaluator Group, an information technology analyst firm as Managing Director.
Her career has spanned all elements of sales and marketing including a 360-degree view of addressing challenges and delivering solutions was achieved from crossing the boundary of sales and channel engagement with large enterprise vendors and her own 100-person IT services firm.
Camberley has provided Global 250 startups with go-to-market strategies, creating a new market category “MAID” as Vice President of Marketing at COPAN and led a worldwide marketing team including channels as a VP at VERITAS. At GE Access, a $2B distribution company, she served as VP of a new division and succeeded in growing the company from $14 to $500 million and built a successful 100-person IT services firm. Camberley began her career at IBM in sales and management.
She holds a Bachelor of Science in International Business from California State University – Long Beach and executive certificates from Wellesley and Wharton School of Business.
