The rapid rise of storage

Storage has never been the sexiest area of the IT industry. ‘Snorage’ as the pessimist calls it, may not get you on the end of your seat, but that doesn’t mean it is not important and it certainly doesn’t mean the channel cannot earn money from it.

The price of the average terabit of storage has dramatically decreased since the turn of the millennium, but that has opened the door wider than ever for channel involvement in the sector.

The ascent of storage“
I have spent the past 12 years in storage in one shape and form, and the industry has grown quite significantly,” said Sam Srinivasan, partner sales director at Sun Microsystems.

“Previously storage was an enterprise sale due to the cost, but the technology has evolved since then. As density increased, the cost has been dropping dramatically at a significant rate.”

Srinivasan said that in 2000 the commoditisation of storage began in a big way and from 2001 onwards it has opened up the opportunities for channel participation more than ever before.

“It is not a question of if customers want storage, but how much storage they need. There has been an emergence of rich content in applications, communities and social networking has driven the whole demand for storage,” he said.

“The advice I give to resellers is understand that storage is already going to be present within a customer’s organisation so the channel needs to look at how the customer can better use the storage they have.”

Francois Vazille, business unit executive for storage at IBM STG, said: “Storage is a great place to be and it is growing faster than any other sector in IT. If you look at how much revenue there was in storage back in 2004, we have grown 68 percent since then. I’m sure distributors and resellers have experienced the same growth in storage. This is good news for all the resellers in storage.”

Vazille said the rise in demand for storage has been fuelled by Australian firms experiencing growth in their volumes of data every year.

“You also have some compliance issues, emerging business continuity issues and a need for organisations to put their products and services to market in a quicker fashion using the web for example, and that increases the amount of data they have to manage,” he said.

Vazille said data creates complexity and resellers can go to customers and address this complexity.

“Resellers have the opportunity to talk to customers about the growing cost of managing data. More money than ever is being spent on data. Resellers need to be flexible with clients on how they can manage their data. The best method to sell storage is to look at the challenges of the organisation, the complexity of their environment and compliance issues.”

Resellers these days have already developed the skills in offering solutions, according to Vazille, and now need to develop skills in information lifecycle management (ILM) and business continuity.

“ILM is all about placing data and finding the most appreciate storage for data. Before this area was just a marketing spin, now it is a reality. It is important to be deploying different levels of storage. Resellers need to work with vendors who have a wide range of solutions, so end-users can deploy ILM.”

Vazille stressed that storage is a services- rich area for resellers and there has been a significant rise in the demand and relevance of storage software, too.
“The first stage is the sale of hardware, with more money to be made on the high-end storage. However software and storage management software is becoming critical. You can reduce complexity by automation and you can do this via software.”

In support of Vazille’s points around storage software, according to IDC’s Worldwide Quarterly Storage Software Tracker, the worldwide storage software market experienced its 14th consecutive quarter of year-over-year growth in the first quarter of 2007 with revenues of US$2.7 billion, an 11.4 percent increase over the same quarter one year ago (see statistics, page 28).

“Virtualisation is critical to ICM. For resellers to make money they need to sell data management software and virtualisation,” added Vazille.

Shane Moore, product marketing manager for A/NZ at EMC, supported the storage explosion argument and insisted the vendor has been seeing firm growth of storage across A/NZ.

“We had an IDC storage report done and it showed data has grown 50 to 60 percent in organisations. There are opportunities for resellers across all industries. Our partners are capitalising on that growth. For us in Q1 based on capacity sold we grew 98 percent year on year in storage purchased by customers,” he said.

There are a number of components to storage, according to Moore. “The only unique aspect of a company is its information. They need to think about how they can manage this information.

“We are seeing the bigger users of storage, such as Google, using storage differently. They have lots of it and it’s geographically diverse. Data duplication can also dramatically reduce back-up by a factor of 300 to one and you will see that more and more adopted by companies.”

Moore said the next stage of storage which EMC is pushing is storing more intelligently and the vendors intend to provide the blueprint for that shift.

“The first stage of that drive is understanding the data within an organisation. It is not until you understand that you can store more intelligently,” he said. “Our partners discuss with customers how to back up data, which is all about moving data onto another platform, we call this active archiving. For example at EMC with our email system, if an email hasn’t been assessed for three months it will automatically be archived.”

Moore said it is common for organisations to have no mature policy of just how to best manage their data.

“With no structure it is difficult to put a policy in place. To solve that we offer content management systems. My advice to resellers would be to look for projects such as server consolidation through (EMC-owned virtualisation vendor) VMWare and that leads onto some network storage,” added Moore.

Virtual reality
It is impossible to discuss the current storage landscape without including the seemingly unstoppable emergence and penetration of virtualisation.

According to Gartner, virtualisation will be the most important technology in IT infrastructures and operations up to 2010. The analyst stated that virtualisation is dramatically changing how IT departments manage, buy, deploy, plan and charge for their services.

Speaking recently at Gartner’s Infrastructure, Operations and Data Centre Summit in Sydney, Gartner vice president and analyst Thomas Bittman said that virtualisation was no longer only about server and storage consolidation and cost saving.

“It is now less about the technology and more about process change and cultural change within organisations,” said Bittman. “Virtualisation enables alternative delivery models for services. Each virtualised layer can be managed relatively independently or even owned by someone else, for example, streamed applications or employee-owned PCs. This can require major cultural changes for organisations.”

Selling challenges
Simon Green, vice president of sales at NetApp, said: “Selling storage is such a challenge as there are so many entry points for the conversation about delivering storage. Resellers have to focus on the customer’s problem and make a sale in that area.”

Green said to successfully supply storage, resellers must understand the customer’s applications and the problem they need to solve.

“Resellers at the tier one level understand the storage conversation, but as you move down, the smaller players are just interested in shifting the storage to customers,” added Green. “I think we communicate with our channel partners pretty well and I would say we are interested in providing better value to their customers. We are willing to spend the time with our customers.”

Future of storage
Srinivasan at Sun Microsystems said: “In the future, the storage market will continue to have the core technologies that have been there for some time, but the market is moving towards programmable storage. There will also be a fair amount of work on storage management, data duplication and storage security.”

Vazille at IBM said: “The storage marketing is going to become more and more solutions- based. I still expect the issues of managing growth to be the issue. In 10 years any storage environment will be virtualised. The second aspect we will see is in terms of flexibility of choice. You need to have a portfolio of technology which brings choice for customers. The successful vendors will be the ones with a large portfolio of solutions.”

Richard Villars, vice president of Storage Systems research at IDC, said: “This year, both the storage and server industries will take steps to bridge the gap between their virtualisation solutions. We expect to see enhancements at multiple levels including SAN drivers, data replication, and integration between server and storage virtualisation management platforms.”

Dave Reinsel, director of Storage Systems research at IDC, added: “Personal storage will become a major storage category, providing new services opportunity around data migration and protection solutions. Look to leading consumer device and content-centric companies to deliver products and services that meet the increasing needs of consumers and small businesses.”
Snorage? Call it what you will, but storage has never been more pertinent to the channel and there is nothing boring about making money.

Hitachi Data Systems: Last month claimed to have shipped more than 6000 intelligent virtual storage controllers worldwide

“(Storage) is growing faster than any other sector in IT.”

IDC: The analyst has reported that EMC Australia has secured 37.2 percent of total storage revenues so far in 2007

“Resellers need to be flexible with clients.”