Market research company IDC revealed numbers that show that the storage market has stabilized overall and could be establishing a foundation for future growth. Earlier this month, IDC reported that factory revenues generated by worldwide disk storage systems dropped 1 percent in first quarter 2003 compared to the same quarter in 2002. Sales performance is noticeably better than in fourth quarter 2002, which showed an 8 percent year-over-year decline. So even though sales are down, the sales performance is still better than fourth quarter 2002.
The IDC report showed that several long-term trends in the storage industry are still at work. First, companies are continuing to transition from using Direct Attached Storage Devices (DASDs) to Storage Area Networks (SANs) and Network Attached Storage (NAS) systems. For the first time, network storage systems represent more than half of the total external storage market. SAN and NAS now account for 53 percent of the external storage market, up 5 percent from a year ago. Overall, however, revenues generated by the external storage market fell 2.7 percent.
Another fact reported by IDC is that several major players continue to dominate the market. Interestingly, there's fierce jockeying for the top position in each market segment among the leading vendors. In the wake of its merger with Compaq, Hewlett-Packard (HP) has emerged as the leading storage provider, with 26.3 percent of the market, followed by IBM with 19.1 percent and EMC with 11.7 percent. Although HP is also the external storage market leader, EMC claims the title of top provider of RAID storage systems. EMC also holds the top spot in the total network storage arena (which includes NAS and SAN), with 26.3 percent revenue share. However, HP holds the top spot in the SAN arena, with 27.9 percent of the market, and Network Appliance (NetApp) is still the top provider of NAS technology, with a 37.3 percent share.
Storage continues to suffer what could be called the "mainframe syndrome." For years, mainframe computer vendors shipped increasing amounts of millions of instructions per second (MIPS) of computing power while their revenues fell. Now, storage vendors are shipping many more petabytes of capacity while the cost per petabyte plunges, cutting revenue. In fact, in first quarter 2003, vendors shipped 175.6 petabytes of storage capacity, up 49 percent on a year-over-year basis.
Despite the rapidly falling cost per petabyte of storage, administrators are still considering reengineering their storage set-ups. Information Technology Services Marketing Association (ITSMA), an advisor to companies that buy and sell technology services, conducted a survey in early 2003 of 300 IT executives from large enterprises and the government. The survey revealed that more than 50 percent of the IT executives surveyed are planning to make significant changes in their data storage systems within the next 12 months. The changes will include enterprise migrations to network-oriented solutions, a move driven both by the adoption of IP SAN technology as an extension of Fibre Channel SAN in the large organizations and by the incorporation of iSCSI in small and midsized organizations. Organizations that previously found the cost and complexity of network storage solutions unattractive or inappropriate can now consider network storage solutions a viable option with iSCSI adoption.
Another trend, as expressed in a second IDC report, shows that parallel SCSI technology will yield to Serial Attached SCSI (SAS) and Serial ATA as the primary hard disk interface technology for enterprise servers and disk array systems. IDC analysts anticipate that this shift in technology will drive architectural shifts in storage infrastructure and change the way storage administrators build and deploy enterprise storage in the future.
What will drive administrators to invest in new technology, particularly as the cost per petabyte of storage continues to dive? According to the ITSMA survey, increased data volumes, improved data security, and the need for high availability systems are the influential factors. When administrators invest in their storage systems, however, their top priority is to protect their current investment.
Overall, current market research reveals a market resting at an inflection point. Although data volumes are growing, they aren't growing at nearly the rate they will when companies begin to once again invest in interesting new applications. Once companies do invest in these new applications, the new approaches to storage, which have served to stabilize the market at this point, will become the foundation for accelerated growth.
Market research company IDC revealed numbers that show that the storage market has stabilized overall and could be establishing a foundation for future growth. Earlier this month, IDC reported that factory revenues generated by worldwide disk storage systems dropped 1 percent in first quarter 2003 compared to the same quarter in 2002. Sales performance is noticeably better than in fourth quarter 2002, which showed an 8 percent year-over-year decline. So even though sales are down, the sales performance is still better than fourth quarter 2002.
The IDC report showed that several long-term trends in the storage industry are still at work. First, companies are continuing to transition from using Direct Attached Storage Devices (DASDs) to Storage Area Networks (SANs) and Network Attached Storage (NAS) systems. For the first time, network storage systems represent more than half of the total external storage market. SAN and NAS now account for 53 percent of the external storage market, up 5 percent from a year ago. Overall, however, revenues generated by the external storage market fell 2.7 percent.
Another fact reported by IDC is that several major players continue to dominate the market. Interestingly, there's fierce jockeying for the top position in each market segment among the leading vendors. In the wake of its merger with Compaq, Hewlett-Packard (HP) has emerged as the leading storage provider, with 26.3 percent of the market, followed by IBM with 19.1 percent and EMC with 11.7 percent. Although HP is also the external storage market leader, EMC claims the title of top provider of RAID storage systems. EMC also holds the top spot in the total network storage arena (which includes NAS and SAN), with 26.3 percent revenue share. However, HP holds the top spot in the SAN arena, with 27.9 percent of the market, and Network Appliance (NetApp) is still the top provider of NAS technology, with a 37.3 percent share.
Storage continues to suffer what could be called the "mainframe syndrome." For years, mainframe computer vendors shipped increasing amounts of millions of instructions per second (MIPS) of computing power while their revenues fell. Now, storage vendors are shipping many more petabytes of capacity while the cost per petabyte plunges, cutting revenue. In fact, in first quarter 2003, vendors shipped 175.6 petabytes of storage capacity, up 49 percent on a year-over-year basis.
Despite the rapidly falling cost per petabyte of storage, administrators are still considering reengineering their storage set-ups. Information Technology Services Marketing Association (ITSMA), an advisor to companies that buy and sell technology services, conducted a survey in early 2003 of 300 IT executives from large enterprises and the government. The survey revealed that more than 50 percent of the IT executives surveyed are planning to make significant changes in their data storage systems within the next 12 months. The changes will include enterprise migrations to network-oriented solutions, a move driven both by the adoption of IP SAN technology as an extension of Fibre Channel SAN in the large organizations and by the incorporation of iSCSI in small and midsized organizations. Organizations that previously found the cost and complexity of network storage solutions unattractive or inappropriate can now consider network storage solutions a viable option with iSCSI adoption.
Another trend, as expressed in a second IDC report, shows that parallel SCSI technology will yield to Serial Attached SCSI (SAS) and Serial ATA as the primary hard disk interface technology for enterprise servers and disk array systems. IDC analysts anticipate that this shift in technology will drive architectural shifts in storage infrastructure and change the way storage administrators build and deploy enterprise storage in the future.
What will drive administrators to invest in new technology, particularly as the cost per petabyte of storage continues to dive? According to the ITSMA survey, increased data volumes, improved data security, and the need for high availability systems are the influential factors. When administrators invest in their storage systems, however, their top priority is to protect their current investment.
Overall, current market research reveals a market resting at an inflection point. Although data volumes are growing, they aren't growing at nearly the rate they will when companies begin to once again invest in interesting new applications. Once companies do invest in these new applications, the new approaches to storage, which have served to stabilize the market at this point, will become the foundation for accelerated growth.
