Sediment on side of water heater?
This looks very similar to something I encountered recently. Back a few months ago my water heater started kicking its breaker for no apparent reason. I figured it was just some random occurrence at the time so I ignored it for a few weeks and just kept resetting the breaker (A very bad idea, but I was busy). Then one day I heard water running in the water heater closet. fortunately for me, the previous owner of my house had installed a drain pan under the water heater because water was pouring down the side of the heater from one of the covers. 

Apparently, this had been going on for some time because it had built up a mineral deposit like the one in your picture. It turned out that the heating element had completely corroded away to the point where water was leaking through what was left of it. That was why the breaker had started to trip because it had started shorting out when what was left of the element tried to turn on. I ended up replacing not only the element but the anode in the water heater as well. 

If you are the do-it-yourself type I would suggest draining the water heater and pulling the heating element to see what condition it is in. Be sure you cut power to the water heater before you do any work on it. If the element is corroded you can get a replacement element at most hardware stores. Whatever you do, don't ignore it like I did. You could run into a real problem if it starts leaking and your water heater isn't equipped with a drain pan like mine was.