Feature

Clash of the storage titans

In the high-end storage market major IT suppliers and a lone storage specialist are slugging it out in the fight for lucrative storage revenue. Jane Dudman reports

For years IBM has dominated the worldwide top-end storage market with its lucrative sales into mainframe markets. But the market is changing. Mainframe storage sales have almost stopped growing and enterprise storage is increasingly focused on open systems, Windows NT and the development of storage area networks (San), intended to make it easier for companies to hook up their storage systems, no matter what server they are backing up.

Storage is profitable for all the major manufacturers and they have a firm grip on their market share. IDC calculates that the top seven disc storage suppliers have 68% of a market worth $27.7bn (£17.3bn) a year. Competition is fierce, and the need for consolidation has been underlined by a spate of takeovers, the most important of which was Compaq's acquisition of Digital in 1998. With Digital's Storageworks portfolio in its product range, Compaq leapt to first place in the worldwide disc storage market last year, pushing long-time leader IBM. Storage specialist EMC is in third place, Sun is fourth and Hewlett-Packard is fifth, according to IDC.

In the European market, the running order is the same - Compaq, IBM, EMC, Sun, HP. Claus Egge, storage analyst at IDC UK, does not expect this to change substantially, despite further takeovers - EMC paid $1.1bn to buy Data General's storage business last year, and IBM bought Sequent.

In the UK, the running order is different, mainly because UK companies spend more on storage for Windows NT and Unix systems than across Europe as a whole. While Compaq is still the clear market leader here, HP falls out of the top five and is replaced by Dell, which achieved billion dollar storage sales worldwide for the first time in 1998, largely on the back of its Windows NT systems. Sun is second, EMC is third and IBM falls to fourth place.

"This is down to the prominence of particular operating systems," explains Egge. "Unix is very prominent in the UK and there has also been a lot of NT investment."

What is clear about the clutch of companies dominating the top end of the storage market is that the major IT manufacturers have managed to hang onto their sales, despite the move to open systems. The only storage specialist in the top five is EMC, a company which in the US has a reputation for being an aggressive, sales-led business.

"There are differences between the suppliers and they treat the market very differently," says Derek Warry, strategic business manager at Leeds-based storage distributor Storm, which sells storage from many of the leading suppliers, including IBM, Sun and Compaq.

"For instance, Sun and Compaq are fairly parochial and their number one aim is to protect their own market, so they really look after their customers. About 80% of Sun discs are probably sold to people already running its servers. IBM, on the other hand, is selling to people all over the place, running anything from Sun to Compaq to NT platforms, so it is looking after customers on a far broader range of platforms," says Warry.

This will continue to make a difference, he adds, as suppliers develop their San products. "There still tends to be a Compaq or Sun box in the middle of those companies' San strategies," says Warry. "IBM is talking to other suppliers, such as Brocade and Gadzooks, and is making it much more open. So if you're running a Sun Solaris, it will be very easy to take an IBM San."

While users wait for their Sans, pricing continues to be a major issue. When IBM launched its Shark enterprise storage server in the middle of last year as a rival to EMC's Symmetrix range, the company discounted its prices heavily to buy back market share, and offered deals through its global finance organisation to enable users to defer payment for up to 110 days.

So corporate IT managers who are looking for more storage should start negotiating and ensure that they are paying less per storage gigabyte.

Top disc storage suppliers

Compaq

  • Worldwide disc storage revenue 1998: $5.5bn (£3.5bn)
  • UK storage revenue, 1999: $537m (£358.2m)
  • Top-end storage ranges: Compaq Enterprise Network Storage Architecture (ENSA) includes: Storageworks, acquired in Digital merger 1998, Tandem modular storage system and 4560, 4570 and 4580 disc sub-systems for Nonstop Servers, acquired in Tandem merger 1998
  • Corporate storage customers:
  • Kodak Industries

    BarnesandNoble.com

    Lycos

    Surrey Police

    IBM

  • Worldwide disc storage revenue1998: $4bn ((£2.5bn)
  • UK storage revenue1999: $207m (£129.3m)
  • Top-end storage ranges:
  • Shark enterprise storage server. Launched September 1999. Part of IBM's Seascape storage enterprise architecture

    Numacenter platform, acquired through Sequent takeover, September 1999

    Ramac Virtual Array - Turbo 3 and Turbo 2

    Snapshot for MVS

    Snapshot for VM

    Snapshot for VSE

    Ramac Scalable Array 3

    Ultrastar 72ZX high capacity disc drive

  • Corporate storage customers:
  • Safeway - bought one of the first UK Shark systems

    Boots

    Scottish Power

    NPI

    Marks & Spencer

    EMC

  • Worldwide disc storage revenue 1998: $3.2bn (£2bn)
  • UK storage revenue 1999: $235m (£146.9m)
  • Top-end storage products:
  • Symmetrix enterprise storage system

    Aviion Numa storage systems, acquired from Data General, August 1999

  • Corporate storage customers:
  • OnDigital

    Littlewoods

    Prudential

    MCI Worldcom

    PSINet

    Sun

  • Worldwide disc storage revenue1998: $1.93bn (£1.2bn)
  • UK storage revenue 1999: $251m (£156.9m)

  • Top-end storage products:
  • Solstice Backup, including Solstice Disksuite

    Sun Storedge Component Manager

    Sun Storedge Enterprise HSM

    Sun Storedge Enterprise Netbackup

  • Corporate storage customers:
  • Honda UK

    HP

    Scottish Power

    Thomas Cook

    National Library of Scotland

    Hewlett-Packard

  • Worldwide disc storage revenue 1998: $1.824bn (£1.14bn)
  • UK storage revenue,1999: $107m (£66.9m)
  • Top-end storage products:
  • HP Surestore hard disc servers

    HP Surestore CD/DVD-Rom servers

    Disc & disc arrays

    Storage area networks

    Magneto-optical drives & jukeboxes

  • Corporate storage customers:
  • Halifax

    Telstra

    Revenue figures: IDC


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    This was first published in February 2000

     

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