Things are looking good for the external-storage market, with an IDC report released last week showing an 8 percent increase in revenues in second quarter 2004 compared with second quarter 2003. The same report shows only a 5 percent increase in the number of complete disk storage systems sold. However, given that the cost of many storage technologies has decreased, the increase in revenues seems to indicate that a broader market for external storage systems is developing. A Gartner report, also released last week, reinforces this presumption by showing that two factors are driving the storage market hard: record-retention regulations and a push by small and midsized businesses (SMBs) to adopt external storage systems.
The widespread support that has developed for Internet SCSI (iSCSI) has made external storage affordable in the eyes of SMBs that are already taking advantage of Network Attached Storage (NAS). The iSCSI push has had the added benefit of revealing the advantages that a comprehensive Storage Area Network (SAN) implementation could bring to businesses in this market segment.
To those of us who watch the market, the Gartner report comes as no surprise. As storage costs decrease and storage requirements increase, SMBs have felt the squeeze. The necessity of providing large amounts of storage to applications and users has meant that SMBs have faced storage management needs that they didn't previously have to deal with.
The availability of high-end storage components to these businesses was never a concern, especially since Compaq's merger with HP brought HP's high-performance storage subsystems directly to a broad market of buyers who formerly were concerned mainly with desktop and server PCs. But Dell's reselling of EMC iSCSI-based storage servers into that same space, which began about a year ago, should have been a clear sign to the storage market that SMBs were ready for SANs. Dell is nothing if not cautious about the products it chooses to sell, and EMC formerly gave little thought to what it considered the commodity computing marketplace. Even IBM chose to jump squarely into the SMB fray with its announcement last week of the TotalStorage DS300 iSCSI-based disk server, which will sell for less than $3000, or as little as one-third the price of similar offerings from storage leaders EMC and HP.
With their lower price point, these iSCSI offerings are quickly bringing the implementation of SANs to the SMB market despite the performance overhead that accompanies iSCSI. Vendors suggest that their iSCSI devices be used only for data storage and not with an application whose performance might be throttled by the activity of the storage subsystem. Nevertheless, these storage networks will also hasten the broader adoption of Gigabit Ethernet networks, whose fatter pipe can mitigate some network-related performance bottlenecks. Presumably, when 10-Gigabit Ethernet becomes more widely available, companies' Return on Investment (ROI) calculations will include factoring in 10-Gigabit Ethernet's suitability as a platform for running iSCSI-based SANs.
At this point it seems that the entry-level storage networking market will follow one of two paths. One possibility combines iSCSI devices and serial ATA (SATA) drives to provide low-cost, high-availability storage for data that the organization needs to retain. The second possibility starts with iSCSI but uses high-performance SCSI drives to allow applications that can run within the constraints of the inherent iSCSI bottlenecks to do so at a significantly lower entry price than full-blown Fibre Channel-attached SANs. In either case, we can expect steady growth in the SMB storage market to be reflected both in consumers' iSCSI adoption rate and in the interest that vendors pay to the segment.