Reducing the stockpile

The long-term future of the storage market seems to point suppliers towards providing a smarter service for the data user

The long-term future of the storage market seems to point suppliers towards providing a smarter service for the data user

If you had to pick out the early trends of 2001, the obvious would be continued growth and the claims of large non-exclusive storage vendors that they are serious about the market. What might not be obvious are suggestions the market is moving away from selling capacity to focus on cost of ownership and management.
Even if the recession that has started to have an impact in the US does arrive in the UK, the storage market should be safe because data will become even more important for firms wanting to survive a downturn.
The factors for growth are varied but by far the most important is the Internet and its cousin electronic mail. Very few firms are not connected to the Web and most employees have e-mail. These two information-generating applications alone have caused most firms to re-evaluate their storage strategies. On top of that, large corporate users have been encouraged to implement ERP and sooner or later the data that is generated will lead to more storage being demanded.
Ignoring data growth is not an option. Data is the most important asset for businesses and those that decide to ignore it are heading for trouble. Although a little way off, the next stage is to turn the data into information and those that are starting to do that will be ahead of the pack.
Growth has not been across the board and there have already been some casualties of competition and tough trading conditions this year - for example, OnStream, which had to close all but its European operation and file for Chapter 11 in the US.
However, most vendors and channel players are enjoying the good times in storage at the moment and while that may be good for those involved in the market, it is attracting the wolves and vultures seeking out an easy kill.
The pressure on hardware has spread from the desktop to the server and now those vendors which have storage products are increasingly getting more competitive about that market and looking to storage to help plug some of the revenue gaps created by problems elsewhere.
Compaq is a good example of a vendor dusting down its storage image ready for a full assault on the market. Recent briefings to journalists have featured prominent storage managers from both the US and UK trying to pitch the Compaq flag on the storage mountain. Stuart Curzon, director of enterprise business group at Compaq, recently said that the vendor accepted it had an image problem and was associated with most users just for its PC products.
Sharing the same brand boosting aspirations is Hewlett-Packard, which is also working hard to shake off criticisms of its commitment to storage. "HP is a major storage supplier, which is a key area for HP. It is a major player right in the high-end and has a broad range of portfolio," claims David Smith, storage marketing manager at HP.

"Storage is one of the big growth areas. HP is well positioned and technically able to rollout SANs and beyond SANs," he adds.
Yet there are still critics who sneer that it is easy for those companies better known for servers, PCs and printers to suddenly position themselves as die-hard storage vendors to compete with storage-only vendors like EMC. "Systems manufacturers like HP, IBM and Sun are saying they are storage companies that happen to sell servers. Compaq, IBM and Sun all have a strong focus on storage, but it is a defensive move against storage only companies like EMC plus the other new entrants," argues Andy Chudzik, managing director at storage consultancy Posetiv.
"The winners will need channel distribution and get the focus right. The best technology doesn't always win," he adds.
Simon Chamberlain, sales director Europe at Iomega, believes the straightforward pressure for profits will lead some companies into storage. "A manufacturer supplying PCs has an obligation to sell products that keep the company profitable. If they want to sell storage then good for them, as long as they can put the support behind it," he says. Open World On the technical side, away from the marketing issues, the buzz is likely to centre around the debate on what is the best network option to carry storage, and also the move towards Open SAN.
There is hardly a vendor around not transfixed by the Open SAN concept because it offers the chance to sell more product as it finally opens the flood gates to a wider deployment of SAN. At a recent briefing on the subject, one US executive from a storage company put the problem into perspective by claiming that only around 10 per cent of US large corporates had gone down the SAN route and his suspicion was that it was even lower in the UK and Europe.
What has been holding things back is a combination of price and fear. The expense is easy to understand and the fear comes from the cost of a wrong decision if the system goes wrong, the likely consequences for the IT director who recommended the system and the future of the rest of the firm as a result.
The barriers might start to come down and the competition widen out as the market moves to agreed open standards. The storage market has traditionally been characterised by vendors promoting proprietary systems that could rarely speak to other vendor systems or even to each other across remote locations.
That is changing and the talk of the industry at the moment is to get open storage and network products that can be purchased and incorporated into a system by any user.
While still on the subject of SANs, there is an increasing debate about the best way to connect storage systems, which will continue this year. The two words "fibre channel" usually come in the same sentence as SAN and the industry, which holds a snazzy conference in Europe this month, has managed to hold off all challengers to the title of de facto network choice for high-end storage. However, there are whispers growing louder at storage conferences about the potential of ISCSI and storage over IP as alternatives to what can be an expensive fibre channel option.
As far as the channel is concerned, there are more opportunities coming through in networking storage. When the top end of the market took off in the form of storage area networking, the dealers watched in frustration while most of the early deals were either dealt with direct or offered out to the channel on a partnership non-exclusive basis.
That has changed and the other trend this year is the large number of dealer promotions and accreditation schemes encouraging those with the skills to train up to sell the top-end SAN systems previously denied them.
Compaq has launched its storage system integrator (SSI) accreditation, Ideal Hardware has gone up and down the country with its SanBlaster roadshow, and other vendors and distributors are also reaching out to resellers trying to help them target the enterprise market. Growth markets Outside of SAN, another area that is set for strong growth is the storage software market. As users get familiar with the plumbing of a storage network, the next step is to improve the management of data round the system through software.
Storage management is something that the channel should be getting serious about. At the moment, the task of going into firms, auditing their storage and then advising on what they need to buy next has been cornered by a number of specialist consultants. The business won't be attractive for every dealer, but for those prepared to undergo the training, it could be lucrative and lead to long lasting customer relationships.
Other growth areas could include storage rental. Although the storage service provider (SSP) model has not taken off as quickly as some predicted, there is still a reasonable financial argument on paper for firms to use a third party to look after data.
The likes of StorageNetworks are still pushing the model and a degree of flexibility has crept into the business model that wasn't so evident when SSP packages were launched.
Unfortunately, the banking community has not been as keen as some hoped to be among the first to use SSP partners to take away its storage headaches after deciding that it was not prepared to leave highly sensitive data in the hands of people who did not have a direct employee relationship with the bank.
The next stage for firms is to use tools like ERP and database software to extract what is useful from the stored data and discard the rest. That might not sound good news for the storage industry, but most experts are convinced information growth will still be at a rate that leads to expansion in the storage product market.
Currently, the suspicion held by a large number of people is that firms are gathering as much data as they can about users and their own behaviour and then stockpiling it.
Chris Atkins, storage sales specialist at Sun, claims that the smart firms will start to implement systems that turn the data into useful information quickly to reduce the amount of wasted space. "Is data Tesco collected on me and my shopping habits three years ago going to be useful now?" he asks.
The supermarkets act as a good example of firms trying to gather data on customers through the use of loyalty cards. What happens to the large amounts of data generated is not quite clear. "I am a vegetarian, shop regularly at a supermarket and use my loyalty card to get points. I was sent a promotion through the post that offered reduced prices on beef. I have never bought beef from the store, so you do ask the question whether anyone has used the information on the loyalty card?" recalls one source.
Atkins believes the time between data going in one end and useful information that could be used for marketing purposes coming out of the other will be reduced before too long. Analyst reports all predict growth for the mid-term, to at least 2005, and soon the next set of figures sketching out the market beyond that will start to appear. No one should forget that what goes up can go down and anyone who has followed the semiconductor market will be familiar with predictions being reappraised and the analysts revising their predictions.
There are signs that suggest the long-term future of the market might be to provide smarter services. As the margins drop on areas of the market that become commoditised, the choice for dealers wanting to make high margins is to specialise.
The mantra of offering more service could not be more applicable than to the storage market. Customers will want someone to help them get smart about data. Those channel players that continue to recommend buying more disk or moving to a SAN might find that the second order doesn't come.

Simon Quicke

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