The industry shifts from snorage to storage

At the end of 2007 the Australian storage market was worth just a shade under half a billion dollars ($499.2 million to be exact) and had just recorded 20 percent growth, according to IDC’s program director for Asia Pacific Storage Research, Simon Piff. At its most basic, the Australian storage landscape consists of vendors, distributors and resellers, and systems integrators, but that is to underestimate its complexity.

The Australian IT market, and storage is no exception, is highly complex and competitive, with every major vendor - as well as several not so major vendors - represented. The other major component of the Australian storage landscape is the battle between fibre channel (FC) and iSCSI protocols. Some vendors have their feet in both camps, while others extol the virtues of their preferred technology. But what are the real differences between FC and iSCSI?

EMC product marketing manager, Clive Gold, divides the storage landscape into four different models. “There are vendors like EMC who have committed to Australia, with established research and development teams, global support organisations, and sales and marketing, as opposed to vendors who are testing the waters by putting sales into the country. There are also products that are represented by a sole distributor, usually a system integrator who has found some niche technology and products that go through a two tier distribution channel, such as Westcon or IngramMicro, who have a great number of resellers that purchase through them.”

HP StorageWorks division product marketing manager, Mark Nielsen, believes there is an even more fundamental difference between vendors in the storage market. “In the storage market, there are vendors providing end-to-end solutions, offering not only storage but servers and other forms of infrastructure, and there are vendors that are focused mainly on storage.”

“All the major storage vendors are present in the Australian market to various degrees,” says Quantum Australia & NZ country manager, Keith Busson. “The distribution market seems to reflect the general global set-up of large broad-based distributors and smaller, more specialist distributors who add value to the resellers in their effort to build solutions.”

The reseller market is similarly varied, although there has been consolidation in recent years. At the top end of town there are large broad-based systems integrators such as Dimension Data, Kaz, Leading Solutions, AlphaWest and Volante, with a plethora of niche market players at the other end.

“It seems like the ‘pure play’ storage reseller is disappearing and the storage market is consolidating through acquisitions,” said Gold. “However, there are a number of ‘storage consulting’ companies that provide expert services but don’t sell product. They provide value through expertise in areas such as disaster recovery.”

In terms of distributors, Nielsen says they form into one of two categories. There are volume distributors and there are value added distributors which manage higher end storage solutions, including blade and storage technology. This effectively provides more of a business solution to the end-user,
although the distributor doesn’t do the actual implementation.

Vendors, distributors, and resellers and integrators have all seen a lot of change in the channel, said Dimension Data’s general manager data centre solutions, Ronnie Altit. “There are more integrators playing in storage and data centre market space. But there’s also been a lot of consolidation. Telcos are moving into the space, such as with Kaz and Telstra and Optus and Alphawest, so there are fewer large integrators that are independent.”

Resellers and integrators aren’t the only part of the storage landscape to have changed. There has also been consolidation among the vendors, with takeovers such as Sun and StorageTek, and Brocade and McData. Much of this is because it’s no longer enough for storage vendors to manufacture boxes of disks or switches, etc. All the large vendors now have a much broader offering. Instead of being interested in disks, they’re focused on the software suite and the way organisations manage their environment.

Altit believes that this broadening of vendor product portfolios, coupled with commoditisation of storage technology, has fundamentally changed the relationship between vendors, distributors and resellers. “Vendors are starting to value the channel because they realise they can’t do it all. They can’t scale, because their product suite and price point is at a place now where it is more accessible to SME. But the cost of entry and the cost of sales to penetrate that market is prohibitive, so they’re turning more to the channel, and they’re turning to the distributors to manage smaller resellers.”

This view is echoed by Gold. “Most vendors see the SMB as the fastest growing market for external storage, due to the growth in storage requirements in this sector and the technology becoming more cost effective. To address this market, a vendor needs wide coverage, and the distributors who have a large network of resellers satisfy this need.”

The commoditisation of storage technology is also changing the way the channel deals with its customers, said Altit. “The longer technology exists, the cheaper it becomes, and the more accessible and simplified. Also, as it becomes more commonplace, people aren’t as scared of the risks inherent in new technology and are implementing it. And as the market becomes more educated, the service opportunities change.”

The opportunities change in two main ways, explained Altit. “While there is a greater degree of education, a lot of organisations can’t afford to all the things they want to do, particularly in the area of skills. This creates an opportunity for integrators because complex solutions need the experience of someone who has been there done that when integrating, and in such a competitive market there are always going to be niche players that target a market that the large players can’t focus on.”
IBM storage director Asia Pacific, Francois Vazille, also believes that services are becoming an increasingly important part of the Australian storage landscape. “Implementation services have become essential service to get IT projects up on time and on budget. Many implementations of perfectly sound solutions fail because the services are not confident installing/implementing and as a result the channel has become more than just a selling arm. It is now the key to effective implementation because it offers those services, and also has a thorough understanding of client needs and anxieties.”

CommVault regional director Oceania, Gerry Sillars, agrees that services are important, but he argues that it’s too difficult for new vendors to break into the Australian market and there’s actually not enough channel partners to go around. “Most major players in storage have been for a long while which makes it hard for new vendors like LeftHand or 3PAR, etc, to break in because there’s not enough channel partners to go around and the older players like to keep the new ones out.

“The problem is not so much with the hardware any more, it’s software and services. There is not enough expertise in the channel to support a plethora of vendors, as you see in the USA, and there are only a handful of specialist storage resellers who can handle the professional services side. As a result, most vendors have to provide their own professional services, as too many resellers which lack the skills have stuffed up.”

While there is little disagreement among vendors, distributors and resellers that the service component of the sale is of major importance, there is a major format fight shaping up between FC and iSCSI. Adaptec South East Asia Regional manager Demetri Christodoulou believes that vendors are blurring the distinction between network attached storage (NAS) and storage area networks (SAN) by offering dual-capable products.

“The SAN marketplace is fairly well divided between the fibre and Ethernet camps, with each telling the public that the other is unnecessary and their product is the best. NAS has now become a commodity, with vendors producing very cheap, low-function products at the bottom end of the market, and traditional NAS vendors pushing their products up into the enterprise marketplace competing with traditional servers for storage within the enterprise.”

Quantum’s Busson has a more cynical take on the duel between the two competing formats. “Every hardware manufacturer claims to have the best technology for your particular business, and more often than not the claims have more to do with what they “have on the truck” than what is right for your data. Basically, a SAN does block input/output (I/O) which is just like having a disk directly attached to a server (DAS). A NAS storage device is for file systems I/O, where the file request is redirected over a network to a device where the file I/O is actually performed.”

Databases are probably the largest example of block level data access in the data centre today. When an application on the network requests information, the request is handled by a server and the correct chunks of data are returned to the client. Only the server knows where the data comes from or where it’s located within the storage subsystem. “Because the server has to manipulate the data prior to sending it out to the client, we want it to be ‘as close’ to the server as possible. In this instance ‘close’ has more to do with direct control rather than distance,” said Busson.

File level data access is frequently used in “workgroup” environments. A good example of this type of access would be a word processing or spreadsheet application. With this type of access there is no server involved, just direct manipulation by the client of an entire file. Data access that follows this type of pattern cares very little where the storage is, as long as the client has control over the file. In this type of environment, administrators often want to be able to access these files from multiple locations, or “share” the files.
EMC’s Gold believes that differences between protocols such as FC and iSCSI are less relevant than the difference between unified and specialised categories of storage. “Unified storage systems are all-in-one systems that allow all connectivity types, use all device types and incorporate high levels of automation. Specialised systems do a limited set of jobs very well, for example store fixed content forever and guarantee the data integrity.

“From a cost of ownership perspective there are major differences, and this is where a lot of people get caught. A unified storage system does it all, but if there is a specific requirement, a specialised system will always provide a lower total cost of ownership.”

Symantec Australia & New Zealand director systems engineering, Paul Lancaster, sees the major differences between these storage technologies in terms of two simple parameters - cost and speed. “We are seeing a change in the storage environment with the cost of storage declining and the amount of information and subsequent storage technologies increasing. It is not uncommon for enterprise data centres to be managing various tiers of storage,
NAS or direct attached storage (DAS) versus fibre channel disk drives in the one environment.”

HP’s Nielsen acknowledges there is a definite difference between the two protocols but argues that in the long term fibre channel over Ethernet (FCoE) is likely to end up dominating the market. “SAN is very prevalent in the marketplace today. It is a very stable technology that has been delivered for a number of years. It forms the basis for most network based storage environments. NAS is still popular as it is suitable for file serving type environments.

“Fibre channel (FC) is currently the most prevalent networking technology in the storage market and this trend will continue for at least three more years. iSCSI is very much still in its infancy. The technology to watch is FC over Ethernet (FCOE). It is basically a FC interface over an IP network and this means it can be implemented easily into existing environments.”

The numbers

While the Australian storage market grew 20% in 2007, and clocked in at nearly half a billion dollars, storage capacity (the amount of terabyte shipped) increased a massive72%, from 58,671 terabytes in 2006 to 101,177 terabytes in 2007, according to IDC’s Piff.

“High-end external disk storage systems accounted for 30% of the total market in 2007 compared with 445% for mid-range disk storage systems and 19% for entry level disk storage systems.”

IDC tracks the “major vendors” within the Australian market. These companies are: Dell, EMC, Fujitsu, HDS, HP, IBM, NEC, NetApp and Sun Microsystems. These companies account for 96% of the storage revenues in Australia for 2007, and ex-factory revenue shares for 2007 are:

In 2006 this market grew 10%. However, in 2007 the market grew an incredible 36%. Whilst the largest segment within Australia is the mid-range storage systems - and this segment grew substantially in 2007 - a lot of the increase in demand also came from high-end systems.

When looking at the interconnect technologies, fibre channel is the largest segment in terms of revenues and grew a healthy 42% in 2007. However, iSCSI is an area to watch since its growth was 295%, albeit of a smaller base. NAS and direct attached storage also grew at the healthy rates of 28% and 19% respectively.