Fibre channel unit sales will grow strongly for the next couple of years, then slow and be overtaken by IP San unit sales in 2007, according to a report by the Linley Group.
The report predicted that suppliers which entirely focus on fibre channel are losing out. Suppliers which embrace IP have a better chance of surviving and prospering.
The reports suggested that FC component prices will fall to half or more of their existing levels by 2007, putting pressure on suppliers such as QLogic with thin profit margins. The number of FC suppliers is expected to fall, reducing customers' choice.
The report, however, is seeing a rapid peaking of FC sales with increased customer sales driving revenue up by a fifth in 2004 and 2005, but a rapid slowing to less than 10% growth in 2006 with IP San sales overtaking it in 2007.
Suppliers which embrace iSCSI are better positioned if IP Storage really does take off
"Although we expect the IP storage market to become quite large, initial deployment has been slowed due to the networking downturn and IT conservatism. The fibre channel market is already large and will continue to be a big market for several years," the report said.
It suggested that the apparent switch to IP Sans opens up opportunities for innovative start-up suppliers.
The report costs $2,945.
Chris Mellor writes for Techworld.com