Can the mid-market drive an infrastructure revolution?

Nutanix today announced the general availability of its converged infrastructure appliance, and CEO Dheeraj Pandey is counting on mid-size enterprises to drive its adoption and that of similar products. His stance is that SMEs have the budgets, the IT demands and the right cultures to justify taking chances on new approaches to infrastructure. He could be onto something.

With its Complete Cluster, Nutanix is trying to revolutionize enterprise storage by eliminating the SAN and placing both computing and storage on the same node. Nutanix has referred to this as a Google-like (s goog) infrastructure for mid-size companies, at least in the respect that it collapses the traditional three-tier application architecture into a single appliance. The 2U cluster, which targets virtualization workloads, includes four nodes consisting of 8 6-core Intel processors, up to 768GB RAM, 1TB of Fusion-io (s fio) solid-state storage, and a combined 35TB of hard drive capacity.

The converged architecture represents a pretty big change of direction for many IT departments, but storage — historically and presently — has been an area where mid-size companies are willing to embrace disruptive technologies. That’s because, Pandey said, mid-market companies have respectable IT budgets but are “chronically understaffed,” so they just want technologies that get the job done and they’re willing to pay for simplicity. Mid-size companies don’t have any religion when it comes to vendors or particular architectures, he added.

They’re also struggling with a higher percentage of virtualized workloads, which can lead to significant performance overhead within storage systems. Trying to do take advantage of virtualization to do dynamic orchestration and other cloud computing-like tasks adds an even greater burden on legacy infrastructure that was designed to run physical workloads. Flash storage and management software designed with virtualization in mind can help alleviate some of these woes.

Pandey points to iSCSI as one example of mid-market companies bucking the industry trend (toward Fibre Channel) and choosing the option that worked best for them. Lately, one might also look at the success of flash-based storage startups such as Nimble Storage, Nimbus Data Systems and Tintri. All these companies are having considerable success selling appliances that disrupt traditional storage notions by replacing spinning disks with solid-state drives and targeting virtual workloads, and they’re selling to mid-size enterprises.

Of course, Pandey thinks Nutanix has an advantage over companies selling storage appliances only because it doesn’t have to sell to storage administrators who will always be comparing new technologies against NetApp and other legacy vendors’ technologies. He says Nutanix is selling to higher-level IT folks who are looking for the best overall infrastructures on which to run their cloud and virtualized workloads. With Nutanix, the storage component is just a part of the greater appliance that includes VMware (s vmw) software and computing hardware.

Ultimately, though, whatever the form factor, it’s the price-performance ratio that’s driving adoption of these new architectures. Converged infrastructure is nothing new, but Nutanix’s $75,000 entry point is a far cry from the list price for a VCE (s emc) (s csco) Vblock, for example. Nimbus Data Systems and Nimble Storage also claim their flash-based appliances provide better performance than hard-disk-based systems while competing very strongly on price.

There is a great deal of business to be done outside the Fortune 500, and if Nutanix, Nimbus and others trying to revolutionize storage infrastructure can keep convincing customers that their products deliver more bang for the buck, we could be witnessing the beginning of a storage revolution that results is spinning disks and SANs becoming things of the past for many companies.