As research manager in the hardware division of the Products Research Group within IDC Canada, Alan Freedman tracks the multi-user server, enterprise storage and networking hardware markets in Canada. From his Toronto office, he recently shared what he sees as the latest trends and developments in the enterprise disk storage market.
IT Focus: What are the overall storage trends you see that could affect the financial services sector?
Alan Freedman: What we’re seeing in the enterprise disk storage market is there are a number of factors working together right now to depress the market. The first is the economy. The effect the uncertain economy is having on the storage market is that end users are putting off capital investments and they’re taking a look internally and trying to better utilize their existing resources. Two years ago when things would get tight in storage they would just go out and buy something new. Now they’re really taking stock of what they have. People realize that when they actually take inventory, they have a lot of storage that is underutilized.
Most customers have told us that in the past they have been very reactionary in terms of storage purchases. What that has led to is disparate islands of storage and some departments within a company or a health care environment will have a lot of excess capacity while others are loaded in terms of their utilization rates. You can connect these disparate islands of storage and have a better functioning storage resource. It is also easier to manage.
There are also rapid price declines so the price of the disks and the price of the systems are coming down. That’s due to natural evolution – the component pricing is reduced from expertise in manufacturing. But it is also the fact that a lot of these companies have to compete on price now and in the past they didn’t. The number one example of that is EMC. In the past, EMC always charged a premium for their reliability and scalability and all the different features that they have as well as the name and the support services that go along with buying EMC. Now in this environment today, they’ve had to change their whole go-to-market strategy and have been competing quite a bit on price. So that has really taken out a lot of margin within the whole industry.
IT Focus: Can you give me a ballpark range now in enterprise storage pricing?
Freedman: There’s no real ballpark price for any of these things, because you can get from HP, for example, the msa1000 which is an inexpensive SAN-enabled box. So, you can get a SAN (storage area network) from under $10,000 to a Symmetrix (from EMC), which can cost upwards of a million dollars.
IT Focus: Besides affordable pricing, what else are customers looking for?
Freedman: One way that [storage vendors are] trying to recoup these declining hardware prices is with software and services. What that means for the end user is that [they] are going to have more choice. The users are going to have better capabilities to put together a strategic storage solution coming from one vendor. Whether the vendor provides all the services in house or whether they partner, all [the end user will] see is they have one contact – as we like to say one throat to choke – if something goes wrong. They’re looking for ease not only when it comes to installation, but in terms of support.
IT Focus: Have we reached a practical ceiling on getting the most storage density into the least physical space?
Freedman: Storage systems are definitely becoming more compact. Something new that’s coming down the road in the next few years is storage blades. Blades are ultra-dense and ultra-compact servers and/or storage devices. A normal rack-mounted storage system would go in horizontally. Blades sit in an enclosure and the enclosure goes in horizontally, but the blades are usually vertical. You can get many more blades within that enclosure than just a normal subsystem that goes into a rack.
Server blades are coming into the market now. The value proposition behind server blades is the density and the manageability because there’s usually some networking device that’s built into the enclosure so there’s less cabling and easier install and support if something’s broken.
The next iteration of blades will be storage blades – looking to not only reduce the footprint, but ease the installation. I know that HP and Sun have talked about storage blades, but there’s nothing concrete just yet. It’s a year or two down the road.
IT Focus: Is there a SAN/NAS (network attached storage) convergence?
Freedman: Absolutely. IDC has been predicting that SAN and NAS would see a lot of similar not only products but technologies coming down the road. In fact, there are a couple of devices out there right now which have true SAN and NAS convergence and one of those is from Network Appliance. It was introduced the beginning of October and it can handle both file level data and block level data so it can do NAS and SAN type of communication. This is just the first step in what IDC has thought all along in that the lines are eventually going to blur.
People were getting very confused. Do I need a SAN or do I need a NAS? If I put a NAS, can I run a database? NAS was perceived to be low-end; SAN high end. What the vendors have been showing is that you can actually do high end applications on NAS and you can get a small and relatively inexpensive SAN. A lot of companies that we’ve seen have been implementing not one or the other, but one and the other. They’re definitely not mutually exclusive in the data centre.
There will be more interoperability not just between different vendor’s products but the actual data itself, the different levels of data, whether it be block or file access. You can have more efficient, more effective backups and centralization of data due to the convergence of SAN and NAS.
IT Focus: How significant is the falling off of dedicated storage for servers in favour of SAN and NAS?
Freedman: For 2001, we had direct attached storage accounting for two thirds of all the revenue in the enterprise disk space. By 2006, we’re going to see more than a complete reversal… 72 per cent of revenues will be from SAN and NAS, and the majority of that will be SAN – 53 per cent SAN and 19 per cent NAS.
There are a couple of reasons for this. First, people are finding it is more efficient to share the resources rather than have them sitting alone in an island. It is easier to manage, especially if you have many different servers, or many applications that you’re storing the data for. And you need less people to administer that. Also, the prices and the available solutions are getting better. So prices are dropping and there are more solutions available for SAN and NAS.
The big issue is interoperability, whether all the different vendors’ products will work together to give you these supposed benefits that they’re all talking about. It has been a question mark and it is definitely something that they’re working on and it is improving but there’s still lots of room for improvement. That’s what a lot of these industry standards bodies – SNIA (Storage Networking Industry Association) and FCIA (Fibre Channel Industry Alliance) – are working to develop certified products and solutions that will give customers guaranteed interoperability.
IT Focus: How prevalent is IP storage?
Freedman: IP storage is not very prevalent right now but it is definitely looking to gain some momentum and products are coming out from companies, mainly Cisco and the networking companies. I think it is going to take a few years but there should be a market for this. People see the benefits of having one network where you don’t need a fibre channel network to go along with an IP SCSI network right now. So there is definitely a cost-savings advantage. Familiarity of an IP network goes a long way into reducing cost as well. If you don’t have fibre channel and you are looking into getting into network storage, that’s where IP is having a little bit more traction – as opposed to scrapping your whole system and starting over.
The fact that a lot of hospitals are moving toward online patient care…is really overhauling the way storage was thought of and the way storage was implemented in the medical field. It is much more robust now as people try to not only save [data], but it gives them additional benefits of helping in diagnosis because you have things online and you can compare and contrast them easier – and in many cases more effectively, especially if you are doing it remotely.
In finance, the real benefit to having more effective storage is better targeting for not only customer development, but customer retention.