Sources say IBM to drop Windows-based storage

IBM Corp. plans to discontinue its line of Windows-based network-attached storage (NAS) devices in order to focus on higher-end products, including a file server that’s expected to run Linux, sources said this week.

The sources said IBM has told them that it plans to announce this month that it will stop making its TotalStorage NAS 100 and NAS 200 filers. The two products offer storage capacities of up to 480GB and 7TB, respectively.

According to the sources, IBM will continue to sell its NAS Gateway 300 system, which connects servers and PCs on IP networks to storage-area networks (SAN) that are based on Fibre Channel technology. In addition, they said, the company plans to offer higher-end NAS devices, including a Linux-based one.

“IBM wants to own the data center — the midrange and high-end market,” said John McArthur, an analyst at IDC in Framingham, Mass. “They’re not trying to capture the low-end, high-volume market.”

IBM officials declined to comment on the matter, describing the information about its plans as “speculation.”

A spokesman for Microsoft Corp., which develops the Windows Powered NAS software used by IBM and other storage vendors, also wouldn’t comment. “IBM’s plans are IBM’s,” he said. “But we have a wide range of OEMs that continue to expand (their NAS offerings).”

IBM announced the NAS 200 in June 2001 and added the lower-cost NAS 100 last July as part of a plan to compete on a wider basis with rivals such as EMC Corp. and Hewlett-Packard Co.

But Pushan Rinnen, an analyst at Gartner Inc. in Stamford, Conn., said sales of IBM’s low-end NAS line haven’t taken off. For example, NAS 100 sales totaled US$3.4 million last year, which represents only 3 percent of the entry-level NAS market, according to Gartner’s figures. “The volume is not high enough (for IBM) to be a strategic player,” Rinnen said.

The NAS 200 and the NAS Gateway 300 have done better, she said, adding that the NAS-to-SAN gateway device was third behind products from EMC and HP in its market niche last year. But Rinnen said IBM placed sixth in the overall NAS business during 2002, with about $40 million in sales and a 3 percent market share.

Until now, the top storage vendors have been steadily rolling out products based on Windows Powered NAS. But because of IBM’s low sales, its planned pullout “is no blow to Microsoft,” McArthur said.