Clash of the storage titans

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

Kodak Industries

BarnesandNoble.com

Lycos

Surrey Police

IBM

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

Safeway - bought one of the first UK Shark systems

Boots

Scottish Power

NPI

Marks & Spencer

EMC

Symmetrix enterprise storage system

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

OnDigital

Littlewoods

Prudential

MCI Worldcom

PSINet

Sun

Solstice Backup, including Solstice Disksuite

Sun Storedge Component Manager

Sun Storedge Enterprise HSM

Sun Storedge Enterprise Netbackup

Honda UK

HP

Scottish Power

Thomas Cook

National Library of Scotland

Hewlett-Packard

HP Surestore hard disc servers

HP Surestore CD/DVD-Rom servers

Disc & disc arrays

Storage area networks

Magneto-optical drives & jukeboxes

Halifax

Telstra

Revenue figures: IDC