Data storage capacity in Australia increased by more than 14 terabytes last year — an increase of more than 40 per cent over 2002 — and according to IDC it is expected to increase by almost 50 per cent annually over the next three years.
Until now most of the spend on storage has been in the enterprise market, however, as costs come down and various technologies become easier to integrate and manage, small to medium businesses (SMBs) are becoming much more interested in solving their own data storage and management problems. However, the first problem they have to overcome, according to several industry experts, is a lack of knowledge and understanding of the various technologies on offer. That is not helped by what, according to Meta Group’s A/NZ research director Kevin McIsaac, amounts to the latest religious war over technologies.
The storage industry has a reputation for taking sides and developing a particular fervour for a favoured technology. Two years ago the battle was between IP-based Storage Area Networks and Network Attached Storage.Today the heat has gone from the conflict as customers look for the best in both technologies and either run SAN and NAS side-by-side or in a hybrid form.
Instead, the debate has now swung to the benefits or otherwise of the new iSCSI technology versus the established Fibre Channel. But McIsaac has a blunt message for bickering vendors — ‘Get over it!’
“In the IT departments where people are only interested in value for their dollar it’s an incredibly minor issue and one without merit,” he said.
McIsaac warned that 2004 was going to be another tough year for the IT industry in general, with vendors and the channel having to focus on what is best for the customer. While the overall IT spend would be up about 4 per cent this year, he predicted the increase would be in specific areas.
He said the storage market had changed over the past few years and was no longer about hardware.
“It’s about management and virtualisation software and anything that increases productivity and utilisation,” McIsaac said. “People want flexibility but don’t want to pay more for it.”
While the iSCSI/fibre channel debate had little relevance, he said another new technology — Serial ATA — would play an important role this year.
While there were concerns that Serial ATA was not suitable for mission critical data because of its slowness and the potential for failure, McIsaac said it was now a good enough commodity technology that it would sweep aside a lot of other technologies in the future.
The release earlier this month of IDC’s latest report on the local storage market highlights what a lot of vendors were already saying. The storage solutions market has changed a great deal in the last year and it is no longer a matter of concentrating on infrastructure.
IDC’s report advises storage technology providers to develop partnering strategies in the Australian and New Zealand markets that deliver end-to-end solutions to customers. They should concentrate on delivering IT as a service to the business rather than on a product-focused reseller arrangement that emphasises building up infrastructure.
IDC market analyst, Megan Dahlgren, said third-party storage solution providers were an increasingly important part of any go-to-market strategy because they could provide vendor-independent assessment services that allowed customers to better understand their data, where it was used and stored and how it should be managed.
She said local users were taking a more strategic approach to storage and system integrators would continue to play a critical role in advising customers on the implementation of storage solutions.
One of the most significant events for the industry last year was the establishment of an Australian and New Zealand branch of the Storage Network Industry Association (SNIA).
SNIA A/NZ is made up of vendors, channel partners and end-users interested in promoting storage networking and its associated technologies.
It’s a chapter of the global association which has its headquarters in the US and was officially launched locally in December. While it is vendor neutral the board of directors comprises representatives from most of the major vendors including EMC, HP, Imation, Computer Associates, HDS, IBM, Veritas, Sun and Brocade.
SNIA is expected to play a key role in educating both the channel and the market as new technologies emerge.
Acer’s Enterprise Systems group business director, Bert Noah, said that education was particularly needed in the SMB space — a market that Acer has decided to move into.
He said the enterprise market in Australia mainly consisted of 150 big name companies that all had multi-million dollar storage solutions.
“The people who spend the money in enterprise don’t earn it themselves, it is not their money,” Noah said. “They are just handed budgets with a lot of zeroes and they plan something for the survival of the organisation.”
SMBs cannot do that, but their data is still critical to them.
“These guys [SMBs] are very disadvantaged. Their IT departments have a maximum of three or four people and they do not have the resources or the knowledge to manage an enterprise style storage solution.
“The storage industry has been guilty in the storage area network environment of bluffing the entire user group into believing this is a Rolls Royce technology that is only for the elite and you have to have at least $100,000 to even talk to us about it.
“If you want a terabyte of storage it is going to cost you $150,000 and a company that is only turning over $20 million to $30 million cannot afford that.”
Noah said the industry was now changing to address the problem and as a result prices were starting to come down significantly.
He said SMBs should not be put under pressure to choose between SAN or NAS because they don’t know the difference. They should be provided with a solution that suits their environment and that may be a hybrid of the two.
Sun Systems specialist with reseller Frontline Systems Australia, Roger Graham, said a mixture of SAN and NAS storage infrastructure was appealing to customers because it had not been polarised by single manufacturers and provided the opportunity for significant data growth.
EMC national product manager, Mark Heers, agreed. He said using SAN and NAS either side-by-side or as a hybrid was becoming popular in both enterprise and SMB markets.
Heers predicted the trend would continue to move down into smaller and smaller businesses this year as product ranges expanded and prices fell.
He said the channel should be looking to SMBs. They represented the lion’s share of the untapped market.
“Get out and sell the benefits of network storage because more than 50 per cent of storage is still not networked,” Heers said.
Businesses need to understand their information and to be able to classify it according to its importance. They should be encouraged to look at multiple technologies so they have the right solution for their critical information that they need instant access to, and can save money by using a different technology for their secondary data.
“It’s no longer a case of one size fits all,” Heers said.
The head of HP’s storage division, Ian Selway, said organisations were becoming budget conscious and were no longer willing to pay the price per megabyte of storage they were a couple of years ago.
They were looking for alternative technologies that offer low cost storage and, in particular, more efficient and cheaper data management. A significant number of businesses — particularly SMBs — were starting to look at external storage solutions.
“Where the channel can add significant value is by understanding the customer’s business and their business requirements and then making a recommendation based on the various technologies that are on offer be it SAN, NAS, a blend of the two or even direct attached storage,” he said.
Senior technical architect with Veritas Software, Simon Elisha, said he didn’t think that in general SMBs understood the differences between SAN and NAS.
“It is a more complex issue than many of those organisations have had to deal so it is a lot better for a reseller to go in and offer them an end-to-end solution that will serve their data, store it and protect it,” he said. “SMBs really appreciate a truly turnkey solution.”
Elisha said he saw a lot of potential in the new Serial ATA technology that was already being adopted by enterprise for low-end storage tasks.
However, he was concerned that SMBs might not yet understand that it was not really suitable for critical applications.
“The low cost per gig [gigabyte] makes it a compelling solution but it is up to the reseller to explain to potentially customers why it is so cheap,” he said.
“The market is becoming much more crowded with different storage options and people are starting to ask how do I manage it altogether? How do I organise my data? How do I know what is appropriate? And so on.”
There is general agreement in the industry that the resellers that can provide the answers will be the ones that succeed in the coming year.