IBM called a press conference under cloak-and-dagger terms
to tout the fact that it has been named the market leader in
combined
tape and disk storage hardware in a new report by IDC, its
first leadership position in the storage market since the halcyon
days of the early 1990s."We've been working for 10 years on this after decades of
dominance -- we lost our dominant position [in storage] in the
1990s and now we're back," said Andy Monshaw, general manager for
IBM's storage unit.
The new IDC numbers showed the overall combined storage hardware
market -- branded disk and tape offered as a package -- growing
from 27.2 billion in 2005 to 28.2 billion in 2006, which is as long
as IDC has been using this metric, according to IDC storage
research program director David Reinsel.
The other vendors evaluated in the report were Hewlett-Packard
EM., Dell, Sun Microsystems and Hitachi Data Systems (HDS).
According to Reinsel, products were measured according to what
brand was on them rather than who manufactured them, making it at
least theoretically possible that IBM's market share could have
been lower or higher based on factory revenue, though Reinsel said
that was unlikely.
IBM hopped to the No. 1 position by increasing its market share
in the combined disk and tape hardware markets 0.2% over 2005,
while previous leader HP lost a full percentage point.
What about the big picture?
HP did lose ground
slightly in this survey to IBM, but like most of IBM's large
competitors is basing many of its storage messaging around software
features as the storage hardware market continues to
commoditise.
According to Reinsel, tape hardware in particular -- already the
minority of the revenue being reported at $3.8 billion -- showed a
decline, from $4.2 billion in 2005. "Tape is pretty much a flat
market year over year, and by quarter last year there was a slight
decline," Reinsel said, though he declined to release quarterly
numbers.
"The uptick for this market is based on disk, not tape."
Meanwhile, IDC also forecasts that worldwide disk prices will
fall approximately 34% over the next year, matching the rate of
decline IDC's been seeing for the last five years.
As for the bigger picture of IBM's position in the storage
market, Reinsel said, "Software clearly brings personality,
features and functionality to hardware, neither is good without the
other, but our assumption with this report is that software is at
play there too, these particular numbers just don't capture
it."
Still, IBM is behind many of its competitors when it comes to
some of the hottest current storage product categories. It has yet
to market a data deduplication product in any of its secondary
storage devices, for example, and lacks an iSCSI storage area
network (SAN) partner for the low end since dumping partner Adaptec
Inc. late last year. It's got a reseller relationship with Tacit
Networks Inc. for WAFS, but at this point is behind fellow Tacit
reseller Brocade Communications Systems Inc., which announced
additional file virtualisation capabilities for its version of the
Tacit product last week.
"There's still a huge amount of money to be made in hardware,"
according to Arun Taneja, founder and consulting analyst with the
Taneja Group. He added that companies the size of IBM play by
different rules than smaller companies in the marketplace, which is
where the innovation usually comes from. "When you're that large a
company, you have access to gigantic customers as a strategic
partner, and those customers will wait as long as IBM tells them
they're working on getting them a certain feature."
However, in this, IBM isn't that different from EMC Corp., which
has been stating its intentions to make software the core of its
business for at least a year. "There are certain holes in the
product line that IBM needs to go and do something about," Taneja
acknowledged. IBM recently announced it will offer Network
Appliance Inc.'s (NetApp) A-SIS data deduplication feature for
primary storage file systems, but according to Taneja, "Not to have
it on the VTL side in six months is not an option, the way I see
it."
When asked where IBM's growth is going to come from if it holds
back on new storage markets, Monshaw responded that IBM's
differentiation would be in offering an integrated product line
that would extend to heterogeneous management and storage
virtualisation products. One example of such integration Monshaw
gave was the IBM T1120 self-encrypting tape drive, which combines
IBM's proprietary hardware with encryption and key management
software. "Look at the DS8000," he added, "as another example of
how software is being sold to the customer as hardware, in a disk
array that also contains three million lines of microcode with
availability and business continuity features."
As for integrating new storage technologies into those systems,
"There are 50 different kinds of new, leading-edge technologies
that we look at on a regular basis -- cool ideas we could sit
around a campfire and talk about -- but they're not ready for prime
time," Monshaw said.
John Webster, principal IT consultant with the Illuminata Group,
pointed to information lifecycle management (ILM) and continuous
data protection (CDP) as examples of previously hot storage markets
in which IBM has ultimately looked smart to hold back on. "With any
technology, wait and see can be a very sane approach," he said.
As for this announcement in particular, Webster pointed out,
"I'm not sure if this is as big an issue for customers as it might
be a channel issue, a way for channel partners working with the IBM
logo to justifiably say, 'we're No. 1.' It tends to be a motivator,
a way for IBM to reassure the channel and its partners that the
relationship is working out."