Storage wars

Vendors are jockeying for position now - because the next 18 months will see big changes in storage. Consolidation is on the cards, as is a final move away from storage as a silo and towards a ubiquitous information life cycle or total data management approach, Henderson continues.

He claims that will leave CA, Veritas and NetApp out in the cold. 'They all offer a point solution or part of a solution,' Henderson says. A key reason for all this intensity is flat hardware sales, leaving vendors scrambling for new weapons to control data centres.

According to research firm IDC, worldwide sales of storage hardware hit US$20.9 billion in 2004, up 3.2 percent from the US$20.2 billion sold in 2003. Storage software sales grew 16.1 percent to hit US$7.9 billion. Of the top seven hardware vendors, only EMC, Dell and NetApp saw yearly growth. Mark Lewis, executive vice-president of EMC, claims all the market growth in 2004 came from EMC. He could be right.

In the fourth quarter of 2004, EMC, the third-largest hardware vendor, saw its sales rise 13.4 percent over the previous year. Dell's storage sales, mostly EMC entry-level and mid-range products, rose 15.8 percent. The relentless onslaught has shrunk share for IBM, HP, HDS and Sun, three of which depend heavily on alliances.

HP has been depending on HDS for its enterprise-class arrays. Sun also OEMs arrays from Dot Hill and builds others using technology acquired with its 2002 purchase of Pirus. IBM has reinforced its NAS and entry-level SAN business by signing a deal to OEM NetApp's NAS and iSCSI SAN appliances from the second half of this year. IBM, StorageTek, SGI and Sun, meanwhile, depend on OEM and reseller agreements with one supplier, Engenio, for much of their array business. Sun in Australia at least has kept its strategy acutely targeted where it sees the most gains.

Dan Kieran, Australian national storage business manager at Sun, says it is still seeing 12 percent growth a year, down from 15 percent last fiscal year. Kieran says pricing pressures are tough. But Sun, of course, expects the war to be won by open, interoperable systems that allow vendor-agnostic virtualisation and infrastructure management.

'EMC doesn't have the complete stack. IBM has the stack, but they won't service different parts of it,' he says. 'And HP's business model is going down. They have multiple operating systems they're trying to support.' ISVs and other partners are crucial to winning the battle as storage technology continues to consolidate and converge, touching every part of a business. 'We're adding resources and assets to the channel and working with them to go to market,' Kieran says. Sun's channel appreciates its approach.

Ed Jeffers, national practice manager of infrastructure services at Alphawest, goes for best-of-breed vendors that treat their partners well - choosing HDS, HP, Sun and Quantum.

Some of that has been evolution, not revolution, but Alphawest sees no reason to change. 'We're taking an aggressive stance on storage and focus on a finite group,' Jeffers says. Relationships with EMC or IBM 'haven't presented themselves' but Sun and HDS have certain synergies.

However, Australian storage must be 18 months behind the US industry, he believes, so shake-ups may happen down the track. One looming driver is a move from compliance - investing in storage because you have to, to best practice - investing in storage because it makes for a better business. That has not happened here yet but it is all good, Jeffers argues. 'There'll be more different things to do, and different ways to sell it,' Jeffers says.