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STORAGE: The Terabytes are Piling Up

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DQI Bureau
New Update

One man’s misery is another’s euphoria–and the maxim proved to hit bull’s

eye with the storage segment in fiscal 2001-02.

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While most of the Indian IT industry reeled under the bludgeoning impact of

the slowdown and 9.11, these very events created a cascading demand for the

storage segment. If there was one segment other than IT-enabled services that

spent the year notching up strong growth, it was storage.

But fiscal 2001-02 was unique, in that while it saw storage requirements

expanding on the one hand, it saw IT budgets being squeezed on the other. So it

was that while volumes jumped by a heady 70% (DQ estimates) for storage players,

values were down 5% (DQ estimates), primarily due to crashing component costs.

Storage needs grew, but IT budgets were squeezed
Data consolidation became key—triggering simpler disaster recovery and business continuity strategies
Shift toward designing/building storage architecture
Storage service provider model began to take hold
Adoption of storage software increased
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The slowdown meant that average sales cycles became longer and in certain

cases, it was more than six to eight months, or even more. There were also some

cases where prospective deals didn’t close even after a year of follow-ups.

Though storage requirements persists, IT budgets are tight in these scenarios.

SAN up, but DAS dominates



Direct attached storage (DAS) dominated the Indian storage market with a 74%

marketshare. SAN (storage area network) and NAS (network attached storage)

together accounted for 16% and 10% of the marketshare, respectively.

The reluctance exhibited by enterprises to move beyond DAS were two-fold–costs

and implementation time for enterprise network storage solutions, besides lack

of awareness and RoI pressures. As the cost of hardware components and time of

implementation go down, more enterprises are set to go in for storage solutions.

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Another reason for slow deployment of storage solutions remained lack of

critical mass for comparative evaluation.

The total storage hardware market in 2001-02 stood at Rs 605.15 crore (DQ

estimates), a 5% drop over the previous year.

A

SLOW SHIFT:
DAS

continued to dominate the storage market, but there was a

marked increase in enterprise SAN deployment

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This was mainly due to a significant reduction in component prices. According

to IDC, HP-Compaq at 63%, accounted for the top marketshare in the storage

hardware space, followed by IBM with 13% and Network appliances-6.7%

Fiscal 2001-02 witnessed an increase in the requirement for specialised

back-up solutions like LAN-free, SAN and zero-downtime back-ups in large

organizations, and enhanced back-ups in the SME space. Incidents such as 9.11

and the Gujarat quake only made organizations realize the need for a

comprehensive disaster recovery plan, of which storage was a critical component.

From being just something that people looked at as a back-end implementation,

storage ended the year assuming a significant level of importance, an issue at

the core of most enterprise business strategies.

Data consolidation emerged as a key issue, leading to a simpler disaster

recovery and business continuity plan. Other key storage terminologies that

became hot buzzwords were ‘data archiving’ and ‘hierarchical storage

management’. The key drivers for this were the still high cost of disks, far

more expensive than tape drives.

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The long-term picture for the enterprise storage industry remains positive.

The dynamics are shifting to server-agnostic enterprise storage, both SAN and

NAS. It will be important for storage solution providers to initiate RoI and TCO

calculation for the overall requirement and explain the accruing benefits to

customers, which will help them convince their management to take strong

measures before it is too late.

Storage software: Up, up, up…



Computer storage needs have evolved from simply backing up on a tape to

pulling data from multiple heterogeneous environments across the enterprise and

managing these functions from a central point. This necessitated the need for

automatic monitoring tools that could not only check the health of the storage

solution, but also allow all hosts in a storage environment to communicate with

each other.

Significant Events
Vendor and User Space
System consolidation and datacenters made storage the centre of any IT infrastructure
Corporates started thinking of storage separately and not as an afterthought
9/11 and other incidents has made organizations realize the import of data storage and implement disaster recovery system and BPC solutions
An increasingly larger number of businesses went in for a backup policy and CIOs are finding it easier to convince the top management on the need for and benefits (return on investment) from investments in the storage area
In revenue terms, growth was around 25% , mainly due to tighter IT budget caused by the slowdown
Virtualization became a buzzword with most vendors announcing plans and unveiling software management strategies.
Banks and telecom companies drove up storage requirements
Storage software vendors revamped their presence in the storage market space
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All this and the need to have ‘anytime, anywhere’ data access made

managing storage solutions a continuing headache for enterprises. Also, with the

slowdown squeezing budgets, CIOs were under pressure to realize higher RoI.

Till recently, external storage was only about hardware, but now, a dramatic

shift toward designing and building storage architectures is visible, apart from

widespread adoption of storage software, considered key to realize maximum

business value and returns on investment. With a lot already happening in

storage hardware, storage software also witnessed few vendors establishing or

augmenting marketing activities in India. Besides established players like

Computer Associates, others are beginning to map India within their operations.

While vendors like Brocade established their presence in India, Veritas set

up its marketing bureau. The storage software market is valued at Rs 73.5 crore,

a growth of 70% over previous year. In late 2001, virtualization emerged as a

buzzword as most vendors announced their plans and unveiled management software

strategies. Virtualizing at the fabric and router levels are players like HP-

Compaq and Brocade. Veritas moved virtualization into the fabric level for both

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 expected to realize the full

potential of SAN and NAS environments.

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There are only a few vendors offering solutions for a NAS environ. For the

SMEs’ s, virtualization in a NAS environment is possible but not for DAS.

Storage virtualization is expected to reach India in another two years. Demand

for storage management software is likely to be boosted by a drop in prices for

storage devices, which is expected to stimulate the purchasing cycle. Also,

large enterprises are expected to improve business processes by investing in

enterprise applications that will encourage demand for storage devices and

storage management software.

While vendors are focussing extensively on the high potential financial

services and telecom markets, e-government 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 from CA and Veritas.

Bluefin technology emerged from a league of major storage players who

collaborated on specs for open standards that could fuel the interoperability

movement. The Bluefin technology standard was developed from application

programming interfaces (APIs) and management tools developed by VERITAS Software

and other SNIA member companies.

Value from LMEs, volumes from SMEs



There seems to be a direct correlation between industry segments undergoing

deregulation and their storage requirements.

WIN

SOME, LOSE SOME:
While

the storage software market rocketed by 70% in value terms,

the storage hardware market shrunk marginally by 5% in value,

despite 70% growth in volumes. Falling component costs hit the

bottomline hard

While the banking and insurance, telecom and energy segments are witnessing

an exponential increase in storage requirements, they are shifting to a network

storage environment, especially SAN. HP bagged the SAN implementation project 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.

CA implemented solutions on clients spanning verticals like HDFC Bank,

Corporation Bank, Standard Chartered, CanBank, 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, large enterprises are going to

make large value purchases, 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. Larger IT-savvy organizations are expected to consolidate their

requirements and implement business continuity plans. Key trends for the

recovery market beyond 2002 will include price falls in storage devices, which

is expected to boost purchase cycles and trigger demand for storage management

software. In addition, large enterprises improving their business processes by

investing in enterprise apps will encourage demand for storage devices and

storage management software. Poor awareness, high perceived cost, poor RoI

models and extended sales cycles are possible inhibitors. Another shift is

expected toward inter-operability, especially in technologies such as storage

area networks, and vendors like Veritas, Legato, EMC, IBM, CA and HP are

striving to achieve a manageable storage system.

Bytes of the Pie
The size of the Indian storage market in volume terms is approximately 1700 TB (growth rate over previous year in volume terms was around 70%)
Total storage hardware market value is around Rs 605.15 crore (5% drop over the previous year)
The total storage software market in the country is valued at Rs 73.5 crore (marking a growth of 70% over previous year)
HP-Compaq (63%) accounts for biggest market share in the hardware space followed by IBM and Network appliances

With an explosion in the amount of digital information, the need for storage

capacity has surged. Resultantly, the industry has been searching for the right

paradigm to take storage from a dedicated, direct attached state (where storage

space is not shared and unmanaged) into a networked state (where all storage

resources on the network are available for use by all host computers). Storage

management is experiencing very high growth rates in India, primarily due to a

lower base on account of its nascent market. India has considerable expertise in

managing, implementing and supporting such storage solutions. Coupled with

declining hardware and software costs, the total cost of ownership (TCO) is

reduced as a result of this.

The storage service provider (SSP) model is also expected to take off as

enterprises realize the importance of data management without increasing their

in-house IT headcount. Currently, the main impediment is mindset and security

concerns.

The fact that vendors who were earlier represented by channel partners are

now directly present in the local market indicates that they are taking this

market very seriously, realizing its future potential.

TEAM DQ



Storage Solutions: The Pull Factor

Enterprises are becoming acutely aware of what information can do to their

businesses and are looking for solutions to address their storage needs. The

target—to emerge as a zero-latency organization–one that enables free and

immediate exchange of information

The drivers



The main factor driving the storage market is the need to consolidate data

storage across fragmented storage in various servers, reducing the total cost of

ownership of storage. There is also a need to safeguard data in the most

effective manner without compromising on data integrity.

Several other factors are also driving the adoption of network storage, be it

SAN or NAS. Enterprises are concurrently running resource hungry, data intensive

and data generating applications such as CRM and ERP, which need to be accessed

by a range of users. Storage solutions that are network dependant are therefore

required. The Network storage market is also being driven by the need to scale

storage infrastructure easily without adding staff, and the need to reposition

existing resources to take advantage of cost savings in hardware and existing

expertise. Also, the increasing adoption of network standards such as TCP/IP,

NFS and CIFS has contributed to the growth of the network storage market.

Corporate information has become a key competitive factor, and more and more

organizations are looking for ways to access and protect it more efficiently.

Applying a networking model to storage environments (Storage area networks) has

become a strategic necessity

As SAN is about true interoperability, connecting any processor with any

storage device regardless of manufacturer customers are looking towards

implementation of Open-Ended Storage Systems. Currently, Fiber Channel

technology is the basic standard for SAN -interconnectivity and most of the

storage devices support Fiber channel interfaces and are SAN ready.

Another important trend in storage networking is implementation of IP Based

storage networking using iSCSI as the technology that allows SCSI protocols over

high speed IP Networks. Since using iSCSI will also overcome the limitation of

Fiber channel of not providing direct means for connecting remote sites beyond a

distance of 10km, we would soon see organizations implementing enterprise wide

SAN s’ using a combination of Fiber channel as well as iSCSI.

The inhibitors



There are no major inhibitors for storage. Storage worldwide and in India is

being seen as the hottest technology business, the one least affected by the

slow-down and the one that will be the fastest to recover from the US slowdown

and the general softening of business sentiment in India of late. So, the growth

continues in Storage, albeit at a slightly slower pace than it was witnessed

last year.

The only issue that one faces is that there is still much lesser appreciation

of the most important piece in the IT (indeed, business) puzzle around the World

(including India, of course) and that is Storage. After all, if you are a CIO or

IT director or IT manager of any Corporation, what is it that is most important

among all the things that you hold in your custody for the Corporation? Is it

the servers? Is it the desktops? Laptops? Or Data?

Obviously, the answer is data. And where does the data reside? Storage, of

course.

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