Storage UPDATE, December 15, 2003

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1. Commentary

- Storage Market Remains Flat, Competition Fierce

2. News and Views

- Hitachi Data Systems and QLogic Team Up on Enterprise Solutions

- HP Wins IRS Contract

3. Announcements

- 2004 Dates Announced: Connections Conferences

- Take Our Print Publications Survey!

- New--Microsoft Security Mobilization Road Show 2004!

4. Resource

- RSM Problems with Pools Other Than Backup/DLT

5. Event

- Receive a Free Identity Management White Paper!

6. New and Improved

- SOHO Storage

- Tape Drives Get Update

- Tell Us About a Hot Product and Get a T-Shirt!

7. Contact Us

- See this section for a list of ways to contact us.

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==== 1. Commentary ====

by Elliot King, [email protected]

Storage Market Remains Flat, Competition Fierce

The latest storage sector market-share numbers released by IDC reveal that the market remains weak and that competition among the major vendors continues to be fierce. IDC reported that overall factory revenues from disk storage systems worldwide hit $4.8 billion in third quarter 2003, down 0.3 percent compared with the same period in 2002.

The reasons for the weak performance are no secret. The growth in disk capacity continues to slow, and the per-megabyte price of storage continues to drop. In third quarter 2003, the total shipped storage capacity grew 36 percent over last year--about half the 76 percent compound annual growth rate that analysts such as McKinsey & Company estimated as recently as 2001. Although increases in disk capacity have been slower than anticipated, prices per megabyte shipped have dropped an average of 30 percent, a figure that has held steady for the past two quarters, according to IDC.

But although the overall picture remained glum, most major storage vendors have found a silver lining in their own niche. Network Appliance (NetApp) remained the worldwide leader in Network Attached Storage (NAS), with a 37 percent share measured by factory revenue and 42.8 percent of total terabytes shipped. NetApp also claimed the top spot for Internet SCSI (iSCSI) disk storage systems shipped--NetApp iSCSI drives accounted for 49.5 percent of the revenues and 63.6 percent of the terabytes shipped in that category.

For its part, EMC claimed that it had extended its lead over IBM and HP as the top provider of external RAID disk storage systems, accounting for 21.4 percent of total revenue compared with 18.8 percent of the total revenue generated in third quarter 2002. External RAID storage includes all controller-based disk storage systems not embedded in a server. EMC said its revenue from external RAID storage jumped 20.5 percent year over year, compared with overall storage market growth of only 5.8 percent. And although NetApp claimed the top spot for NAS, EMC noted that it's the leader in NAS and open Storage Area Networks (SANs) combined, generating 28.9 percent of the total revenue in those markets, compared with 27.8 percent last year.

IBM, which reorganized its storage operations over the past year in the wake of a blockbuster deal with Hitachi, noted that it had extended its lead over EMC in the overall disk storage market. IBM now accounts for 21.1 percent of total revenues in that market compared to EMC's 12.9 percent.

Finally, HP, which IDC reported was the overall market leader, weighed in with its own good news. The company trumpeted the fact that it had retained the number-one spot in the overall storage market (although its revenues had dropped 2.4 percent overall). HP also noted that it led in the open SANs sector, with a 31.2 percent share measured by revenue. Third quarter 2003 was the fifth consecutive quarter that HP led the rapidly growing open SANs market, shipping more SAN units that IBM and Dell combined. Moreover, HP noted, it was one of only two companies to gain share in the NAS market, with revenue growth climbing 28 percent year over year compared with a 22 percent jump in revenue in third quarter 2002.

All these claims and counterclaims underscore three fundamental trends in the disk storage marketplace. First, companies can no longer rest on their laurels in a specific market niche. The major companies compete with each other in every storage niche. For example, NetApp is riding into the SAN marketplace on the back of iSCSI, and EMC is reaching new markets through its relationship with Dell. In fact, Dell has climbed to the number-four spot overall, primarily through its role as an OEM for EMC. And all major vendors continue to broaden their product lines.

Second, server vendors continue to play a significant role in the market. The top four server vendors--Dell, HP, IBM, and Sun Microsystems--captured 48 percent of the total storage market, capitalizing on strong OEM relationships. At the same time, SANs and NAS are growing rapidly at the expense of Direct Attached Storage (DAS), which now accounts for only 41 percent of the total external-disk storage market, down from 46 percent in 2002. NAS currently has 54 percent of the market. The shift to network-based storage could change the dynamics of the entire marketplace in the years to come.

Finally, the major companies continue to dominate the most dynamic areas of the market. EMC, HP, and IBM increased their share of the overall network storage market. And NetApp and EMC continue to wage a fierce battle in the NAS arena.

With the economy picking up, the storage sector's long flat spell should be coming to an end. But the next wave of growth won't just be about adding capacity. Competition will also revolve around the efficient integration and management of storage networks.

==== 2. News and Views ====

by Keith Furman, [email protected]

Hitachi Data Systems and QLogic Team Up on Enterprise Solutions

QLogic, a company that sells components for Storage Area Networks (SANs), has announced that it has formed a relationship with Hitachi Data Systems (HDS) to deliver solutions that use both companies' products. As part of the relationship, HDS will resell QLogic's 2Gbps SANblade host bus adapters (HBAs). "Together we are working to deliver certified components that provide our customers with simplified, easy-to-deploy Fibre Channel SAN environments that support open standards, interoperability, and high performance," said Scott Genereux, vice president of global marketing and business development at HDS.

QLogic 2Gbps SANblade HBAs support as many as 80,000 I/O operations per second (IOps) and include native support for Windows Server 2003, Windows 2000, Windows NT, Novell NetWare, Red Hat Linux, Sun Solaris, and SuSE Linux. QLogic also offers HDS-qualified HBAs and switches and plans to continue to certify its products for HDS systems. In addition, the company delivers application-specific integrated circuit (ASIC) controllers for HDS hard disk drives. Many companies' solutions, including those from Cisco Systems, Dell, EMC, Fujitsu, HP, IBM, Network Appliance (NetApp), Quantum, StorageTek, and Sun Microsystems, incorporate QLogic products.

HP Wins IRS Contract

The Internal Revenue Service (IRS), a branch of the U.S. Department of the Treasury, has selected HP and PlanetGov to provide it with servers and network storage solutions. The contract is worth an estimated $50 million and will involve IT consolidation for the IRS. The consolidation involves the replacement of a percentage of 4400 IBM and Dell servers and approximately 30 Storage Area Networks (SANs) over the next 4 years. HP will supply 3000 ProLiant servers, 30 HP StorageWorks SANs, and professional consulting services. "Together with HP and PlanetGov, the IRS is addressing IT challenges associated with the growing American taxpayer base," said Jim Weynand, vice president and general manager of HP's public sector organization.

This isn't the first time that HP and PlanetGov, a company that assists federal government customers with IT, have worked with the IRS. The companies are currently providing Compaq Evo desktops and notebooks as part of a 3-year, $100 million agreement signed in 2002.

==== 3. Announcements ====

(from Windows & .NET Magazine and its partners)

2004 Dates Announced: Connections Conferences

Save these dates: Windows & .NET Magazine Connections will be held April 4-7, 2004, in Las Vegas, Nevada. Microsoft ASP.NET Connections, Visual Studio Connections, and SQL Server Magazine Connections will run concurrently on April 18-21, 2004, in Orlando, Florida. Early registrants will receive the best discounts, so go online or call 203-268-3204 or 800-505-1201 to register.

Take Our Print Publications Survey!

To help us improve the hardware and software product coverage in the Windows & .NET Magazine print publications, we need your opinion about what products matter most to you and your organization. The survey takes only a few minutes to finish, so share your thoughts with us at

New--Microsoft Security Mobilization Road Show 2004!

Join industry-guru Mark Minasi on this exciting 20-city tour and learn more about tips and best practices to secure your Windows Server 2003 and Windows 2000 networks. There is no charge for this event, but space is limited, so register today!

==== 4. Resource ====

RSM Problems with Pools Other Than Backup/DLT

Forum member ole_thor1 wants to use DLT IV tapes for monthly backups but can't get Removable Storage Manager (RSM) to take a tape from a pool called Backup/DLT4. When ole_thor1 tries to use a media pool other than Backup/DLT, RSM prompts for available media. After receiving a response, RSM immediately allocates all available media, then says that none are available. If you can help, please click the URL below.

==== 5. Event ====

(brought to you by Windows & .NET Magazine)

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Are your existing identity-management and access-control solutions fragmented, duplicated, and inefficient? Attend this free Web seminar and discover how to automate and simplify identity creation, administration, and access control. Leverage your investment in Microsoft technologies and benefit from greater security, improved productivity, and better manageability. Register now!

==== 6. New and Improved ====

by Renee Munshi, [email protected]

SOHO Storage

Kanguru Solutions announced the release of the Kanguru iNAS-100S, a storage device that lets users store and share files across a network or over the Internet. Equipped with 120GB, 200GB, or 250GB of internal storage, the Kanguru iNAS-100S can store images, software updates, graphic files, and so on and comes with a four-port cable/DSL router so that you can use it to create a network. The Kanguru iNAS-100S also comes with a built-in firewall and an easy-to-use administration interface that lets you define users and set passwords and permissions to control access to data on the device. The Kanguru iNAS-100S starts at $649. For more information, go to Kanguru's Web site.

Tape Drives Get Update

Sony Electronics' first- and second-generation AIT (AIT-1 and AIT-2) drives now have a new look that's more like the AIT-3 drives. They also have a powerful built-in CPU, a new chip to improve error correction, and a dust-resistant structure. Because the new design reduces power consumption from 12 watts to 10 watts, Sony has replaced the cooling fan with a passive heat-sink assembly. Both the AIT-1 and AIT-2 tape storage formats are targeted to small and midsized businesses, with native storage capacities of as much as 35GB and 50GB, respectively (91GB and 130GB with 2.6:1 compression). For more information, see the vendor's Web site.

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==== 7. Contact Us ====

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Copyright 2003, Penton Media, Inc.

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