Downturn be damned, FY 2001 was significant for the storage market in more ways than one. With storage fast becoming a vital part of IT infrastructure, it was among the few segments that bucked the slowdown, with most vendors recording their highest growth figures. The increasing deployment of Web-based architectures across various industry segments meant an exponential increase in data. The resulting inefficiency of the direct attached storage (DAS) came into sharp focus, causing firms to look at new storage options. Storage area networks (SAN) and network area storage (NAS) were suddenly taken far more seriously. Data storage requirements in large Indian firms also crossed the 1-terabyte (TB) mark for the first time.

NAS, SAN are the future

The storage space comprises of DAS, SAN and NAS. Players like H-P, IBM, EMC, Sun and Compaq compete in the SAN segment while in the NAS segment, Net Appliance is the market leader. All the server vendors are active in the DAS segment. The year 2000-01 has been good for most storage vendors, with Compaq posting 400% growth and Seagate tagging 125%.

As far as operating systems are concerned, Unix emerged a clear winner, bagging over 50% of the total marketshare. NT was a close second, with 30% of orders. NetWare, with 9%, was the third-best OS in server environments. Given the dominance of DAS, the RAID architecture accounts for 85% of the market. ‘Just a Box of Disks’ (JBOD) is dying a slow death, but is expected to be around for a while due to its cost advantage, but volumes are thinning.

SMEs are the fastest

The growth of the Internet coupled with the deployment of mission-critical applications like ERP and CRM has forced companies to develop a strong storage infrastructure. Medium-sized businesses, in particular, demonstrated a propensity for purchasing RAID-based disk storage systems as the simplest and least expensive means of online backup for e-commerce solutions. From the vendor’s point of view, storage became an important component of strategy for those who were previously into desktops and servers.

Present scenario

The adoption rates for NAS and SANs are expected to increase significantly throughout India during the next 12-18 months. Both solutions address the issue of capacity, consolidation of data and shortage of resources by promising simplified management.

SAN solutions have already had a positive and significant impact on the storage market. This is spurred by the development of network infrastructure in large companies (>500 employees) who have been the primary driver behind new storage purchases.

NAS is also expected to do well in India as long as the product is positioned as complementing the previously installed storage solution rather than as a total replacement alternative. Customers are seeking scalability instead of total replacement of their solutions. The SAN market is expected to grow at 65%, while the NAS market is poised for a 70% growth. But by about 2005, the growth rate for SAN is expected to overtake NAS.

The lion’s share of the market, however, goes to magnetic storage methods, such as disk drives and tape cartridges. They are cheaper and have a rapidly increasing capacity. What dissuades their use in a wide range of applications is the limited ability to be easily altered and their short life. Hard drive producers rate their product life at 3-5 years, while tape has a 7-10 year data life rating in office environments.

Telecom and finance: Key verticals

Among the vertical segments, telecom, media, financial and manufacturing are leading demand drivers. Telecom sector growth will be fueled by deregulation in the coming months, which implies investment in IT solutions and, therefore, an increased demand for storage products. Many of the recently set up Internet data centers have started using NAS and SAN for their massive storage requirements. Examples of SAN implementation in the past year include ITC, UTI Bank, IDBI Bank and HDFC Bank. NAS implementation examples are TI India, Cisco India, Philips Software, and HCL Perot.

Outlook

It would not be wrong to say that the storage market is still in a nascent stage. The SAN and NAS growth will continue to push the market ahead in spite of an overall slowdown in capital spending. Organizations will feel the stress of the relentless growth of storage, and the increasing demands of storage management. Efficiencies will have to be found to contain the costs of storage expansion and to improve network performance. SAN and NAS seem to be the new gods.