Storage: Towards the Network

Year 2001-02 saw storage requirements expanding on one hand and IT budgets
getting squeezed on the other. The size of the total Indian storage market in
terms of volume was approximately 1,700 TB. This was a growth of 70 percent in
terms of volume. Total storage hardware market, in revenue terms, was around Rs
605.2 crore, a 5 percent drop over the previous year. The drop could mainly be
attributed to a drop in component costs.

SAN on rise, but DAS dominates

Direct attached storage (DAS) predominates the Indian storage market, with a
market share of 74 percent. This, however, is less than its 80 percent share in
2000-01. Storage area network (SAN) and network area storage (NAS) accounted for
16 percent and 10 percent of the market share respectively.

The reasons for slow migration of enterprises to network storage include cost
and implementation-related issues, poor client awareness and the pressure to
justify RoI. A major reason could be a lack of a critical mass for comparative
evaluations.

As
the cost of hardware components and time to implement falls, more organizations
are likely to go for enterprise storage this year.

The storage software market is valued at Rs 73.5 crore, a growth of 70
percent over the previous year. HP-Compaq at 63 percent accounted for the
biggest market share in the hardware space, followed by IBM, Sun, and Network
Appliances.

The long-term picture for the enterprise storage industry is quite positive.
The dynamics are shifting to server-agnostic enterprise storage, both SAN and
NAS. It will be important for the storage solution providers to initiate RoI and
TCO calculation for the overall storage requirement and appraise the benefits to
customers, which will help them justify their management to take strong measures
before it is too late.

The year 2001 witnessed an increase in requirement for specialized backup
solutions like LAN free/SAN backup or zero downtime backup in large
organizations and enhanced backups in the SME space. From being just something
that people looked at as a back-end product, storage today has assumed a
significant level of importance and is at the core of an enterprise’s business
strategy today.

Storage SW: Impressive Growth

While there were a lot of activities happening on the storage hardware
front, the storage software front also witnessed a flurry of activities, with
quite a few vendors establishing or augmenting their marketing activities in
India. Besides established players like Computer Associates, other players began
to put India on their map of operations. While vendors like Brocade established
their presence in India, Veritas set up its marketing activities, previously it
just had a development center here.

In
late 2001, virtualization emerged as a buzzword with most vendors announcing
their plans and unveiling their strategies of management software. At the fabric
and router levels, the players are HP-Compaq and Brocade. Veritas has moved
virtualization into the fabric level for NAS and SAN from the host level.
Players at the host or server-based levels are Sun, CA, IMB, EMC, Compaq, and
HP. Virtualization is said to realize the full potential of a SAN and NAS
environment. There are vendors offering solutions for NAS. For the SMEs,
virtualization in a NAS environment is possible but not with DAS. Storage
virtualization is yet to make way into India.

Demand for storage management software is expected to be boosted by the drop
in prices for storage devices, which is expected to stimulate the purchasing
cycle. Also, large enterprises are expected to improve their business processes
by investing in enterprise applications that will encourage demand for storage
devices and storage management software.

While vendors are focusing extensively on the high potential financial
services and telecom markets, e-governance initiatives are also expected to act
as catalysts. Enterprise storage solutions are generally more complex and
extensive and are used by large and medium organizations. On the other hand,
smaller organizations still continue to use relatively cheaper options like
workgroup storage products.

Value from LMEs, Volumes from SMEs 

Banking and insurance, telecom, and energy segments, are witnessing an
exponential increase in their storage requirements and are shifting to a network
storage environment, especially SAN.

HP bagged the SAN implementation at BPCL and provided a disaster-recovery
solution to NIIT. Telecom companies, banks, software development houses, large
manufacturing firms, and government departments, show the maximum potential to
shift to SAN.

Significant events-vendor space and user space

System consolidation and data centers made storage the center of any IT infrastructure  Corporates started thinking of storage separately and not as an afterthought  9/11 and other incidents have made organizations realize importance of data storage and implement disaster-recovery system  Increasingly large number of businesses went in for a backup policy in place and CIOs are finding it easier to convince their top management on the ROI for storage investment In revenue terms, growth was around 25 percent , mainly due to tighter IT budget caused by the slowdown Increasingly more number of organizations went in for a backup policy in place and CIOs are finding it easier to convince their top management on the ROI for storage investment Virtualization became a buzzword with most vendors announcing their plans and unveiled their strategies of management software Banks/telecom companies drove storage requirements Storage software vendors enhanced their presence in the storage space

Computer Associates implemented its solutions at clients spanning verticals.
These include HDFC, Corporation bank, Standard Chartered, Canara Bank, C-Dot,
Spectramind, and GE capital services.

Both the LME and SME segments are potential users of storage. While the SME
segment is expected to drive volumes and large value purchases are more likely
to be expected from large organizations as they ramp up their networks.

As the SME segment moves up the value-chain in terms of intelligent use of
information, they will be forced to consider the use of intelligent enterprise
storage. The larger IT-savvy organizations are expected to eventually
consolidate their requirements and implement business continuity plans.

Key trends for the recovery market beyond 2002 include the fall in prices of
storage devices. This is expected to boost purchase cycles, triggering demand
for storage management software; and large enterprises improving their business
processes by investing in enterprise applications which encourages demand for
storage devices and storage management software. Poor awareness, high-perceived
cost, poor ROI models and extended sales cycles are possible inhibitors.

Another trend expected is towards interoperability in technologies like SAN.
Vendors such as Veritas, Legato, EMC, IBM, CA, and HP, are striving to achieve a
manageable storage system. Recent events such as 9-11, led to more awareness
towards investment in disaster-recovery solutions. India has considerable
expertise in managing, implementing, and supporting such storage solutions. When
coupled with the declining cost of hardware and software, this keeps the total
cost of ownership (TCO) down for the end-user organizations.

The storage service provider (SSP) model is expected to gradually take off as
enterprises to realize the importance of data management without increasing
their headcount of in-house IT staff. The main impediment to this currently is
mindset and security concerns.

Many vendors who were earlier represented by channel partners are now
directly present in the local market. This would indicate that the vendors have
begun to consider the market more seriously after realization of the market
potential.

The storage market is beginning to take off. In fact, this could be one
segment to look out for.

Amit Sarkar, DQ