Despite being 18 months in the past, 9.11 and its fallout continued to cast its spell on the storage market, with an increasing number of enterprises coming forward to implement disaster recovery and data replication solutions, driving demand for hardware and software. While the trend of lower storage hardware prices continued this year, the effect on vendor revenues was not as acutely felt. The year ended with a growth of 6% in value terms, compared to a fall of 5% in the previous year, even as growth in volume terms matched last year’s level of a whopping 70% (DQ-IDC India estimates).

Storage, hard and soft
Crashing disk and hardware prices meant more and more businesses could afford sophisticated storage infrastructure. An interesting side-effect of cheaper disks was that it encouraged large and medium enterprises to go in for disk-based data replication solutions, abandoning tapes altogether. Steadily-decreasing margins on hardware forced major vendors to focus more on storage strategies. EMC demonstrated this trend as it took heavily to storage management tools, even though it targeted only the high-end of the market. The company tried to break into the mid-market on the hardware front by launching a mid-range NAS device. Other software vendors Legato, CA and Veritas had their products targeting at the mid- and lower segments, notably small and medium enterprises.

The storage software market continued to grow rapidly—posting a spectacular 65% growth over last year—riding on the back of increased enterprise spending on applications like disaster recovery, business continuity planning and high availability. Growing awareness among Indian enterprises about the availability of solutions offering these enhanced features acted as a catalyst for growth. As data continued to grow beyond the ‘manageable’, need for software-controlled automated processes like online backup and restore, and storage resource management forced many to look at software solutions offering such functiona-lities.

A couple of other trends also gave a major boost to the storage software market—remarkable among them being the increasing incidence of storage consolidation, and the resultant increasing complexity in storage infrastructure. The free fall in storage device prices also acted as a stimulant to drive growth for the storage software industry. It continues to do so this year as well.

The key verticals driving demand for storage software products remained unchanged from the previous year—it was again banks and telcos that headed the list, with the government and BPO companies also chipping in with significant purchases.

Buying and revenue trends: LMEs vs SMEs
The biggest instances of storage implementation took place in the three core sectors—telecom, banking and BPO. A few petrochemicals and pharma majors also took to storage consolidation in a big way. Implementations at Indiaoil Corporation, Reliance and ICICI were the biggest turnkey projects during this fiscal. And the manufacturing sector also splurged most on storage.

Despite a healthy trend among SMEs with regard to low-end network storage, most vendors continued to focus on LMEs, trying to skim the top-end of the market.

A few notable trends emerged in the LME segment. Slithering disk prices inspired a few large enterprises to experiment with disk-replication—the fastest media for recovery in the event of a disaster. Despite the low cost of disks, replication continued to be an expensive technology to use—particularly when done remotely across different locations.

Even though the SME segment was still evolving—with miniscule volumes in network storage and storage software—a buoyant storage market for DR solutions and huge volumes for DAS solutions ensured the continuing presence of SMEs on the radar of storage vendors. Interestingly, almost all DAS shipments during the year went straight to the SME space. Many SMEs have also looked actively at storage consolidation and backup. Significantly, adoption of tape automation and entry level SAN/NAS was on the rise in this market segment. And though smaller in size, even SMEs saw their data volumes rising sharply through the year. Consequently, entry-level capacities for storage devices saw a massive jump.

Storage technology trends
While DAS continued to dominate the Indian storage scene, the star performer of the year was networked storage. Networked storage options performed better than the previous year and continued to gain momentum. The share of DAS in the enterprise storage space continued to nosedive and reached a low of 65%, with the remaining 35% being taken by NS (IDC India estimates). As the NS market continues to grow rapidly, IDC India predicts that by 2005, DAS and NS would stand equal with 50% marketshare each.

The year also saw the merger of SAN and NAS, as devices featuring both block and file handling capabilities began to arrive by the fourth quarter of the fiscal. The net effect was increased cost efficiency and faster return on investment for customers. Devices featuring block and file serving capabilities debuted from HP, IBM and NetApp. The estimated market size of network storage in India this year would be $35-40 million, grossing out at around 700 TB.

The debate between fiber channel and iSCSI as the interconnect standard for data transport also simmered down a bit during the year. As prices continued to fall for fiber channel-based equipment, the technology strengthened its foothold as the de facto interconnect standard for SANs. The biggest development for iSCSI during the year was the formal ratification of the standard in February 2003. With an official standard in place, it is expected that more products will come out in the market in the near future.

For now, both technologies will coexist, though iSCSI is expected to find a major market in the low-end SME market due to its integration with NAS devices. Fiber channel will ride on its superior reliability, speed and sheer number base to be the technology of choice for enterprise-level implementation.

In the secondary storage market, DAT continued to be the de facto standard, whereas DLT and LTO were the two upcoming technologies. These technologies began to gain acceptance in the Indian market as back-up needs increased exponentially. In fact, while DAT will continue to rule the market, IDC India expects DLT and LTO to witness increased momentum in India.

The total market for tape-based storage grew by 20%.

The tape automation market also grew riding on an increased concern for disaster recovery and business continuity by enterprises. According to IDC India, Year 2002-03 saw hectic activity in the low-end automation space, including autoloaders and sub-100 slot libraries. The country also witnessed a few high-end library incidences, and it is expected these will also find momentum in line with low-end ones. The main drivers for high-end libraries are the banking, finance services and insurance (BFSI) and telecom sectors, apart from, of course, the IT industry itself.

Vendor push
In storage hardware, HP continued to be the market leader—even as it increased its hold on the market, ending the year with a 32% share of the overall storage hardware pie. Major installations for automated backups and SANs helped the company achieve those figures. A centralized storage and backup implementation for BPCL was a major highlight for HP in 2002-03.

IBM continued to be active largely in the DAS and NAS marketplace. The company shipped 50-70 low-end NAS boxes and 15-20 high-end ones during the year. Hero Honda, Bajaj Auto and Vysya Bank remained the company’s top customers, with some sales also being notched up in the BPO space.

NetApps continued to bet big on unified storage (block- and file-level access) and launched products with a direct access file system (DAFS) and iSCSI that simulated block-based storage using file-based commands. The company had largescale implementations in GE, ICICI and a 45-TB rollout for Texas Instruments.

EMC continued to be focused at a niche segment with its high-end storage devices—it implemented a SAN for AirTel for the latter’s billing and CRM applications. Hitachi Data Systems had almost all of its sales in networked storage during the year. Intel and i2 Technologies were two big clients for the company that implemented India’s first SAN for a telecom major, way back in 1998.

Among software vendors, Veritas launched Adaptive Software Architecture (ASA), a new software and services model to reduce data center complexity. As part of its ASA, the company launched a product that unifies the management of DAS, SAN, tape and storage infrastructure for business-critical applications. The product was upgraded in September and features for automated storage provisioning were added.

Legato Systems launched solutions in content management, automatic availability and hierarchical storage management (HSM) and archival services during the year. The company had major installations in the banking sector, followed by telecom and BPO. Legato’s major customers during the fiscal were Citibank, Global Trust Bank, Bharat Forge Ltd and NDMC.

Storage virtualization
Storage virtualization is about the abstraction of storage from a physical level to a logical level using specialized virtualization software and hardware like intelligent routers and servers. Though network-based storage evolved from simple RAID into NAS and SAN with many successful solutions coming from major players like EMC, HP, Sun and IBM, storage virtualization has a far higher potential. At its best, storage virtualization can pool each and every storage device that an enterprise has, even those spread over different geographical locations (connected by a WAN), to form a unified virtual storage disk, with higher levels of data integrity, redundancy and fault–tolerance thrown in for good measure. Storage virtualization does not, however, replace SAN. Rather, it’s an evolution of SAN that complements and adds to SAN’s efficiency and features on a larger scale across different storage pools.

Among the routes vendors have adopted is server-based virtualization. Here the virtualization software resides on the application server (host) and causes the host’s OS to simulate direct communication with the storage device. In storage-based virtualization, virtualization software resides on the storage devices. Quite similar to host-based virtualization, it works best in uniform environments. In network-centric virtualization, an intelligent device (like a router) on the network takes care of the virtualization function.

The players HP, EMC, Sun, Network Appliances, IBM and Hitachi are some of the major players in this arena who offer storage virtualization solutions. DataCore, FalconStor, TrueSAN and LeftHand Networks are some of the other players who offer virtualization software.

As of now, most of the benefits are yet to be translated from concepts to reality. And some of the advantages might seem a tad over-hyped too. Complete virtualization and true inter-vendor operability will depend on the standardization of the different protocols involved, which will, in turn, depend on the maturing of the market. But, initial moves towards standardization have already been made by SNIA (Storage Network Industry Association). The Bluefin initiative (now named SMIS or Storage Management Interface Specifications) that was created by a consortium of leading vendors and the Storage Management Initiative by the SNIA are right moves in this direction. The ball is now in the vendors’ court.

Storage resource management
Virtualization cannot happen on its own, and the key driver here is storage resource management (SRM) software. This enables virtualization by taking the inventory of the physical assets (the number of storage devices) and digital assets (the volume of data that resides in the devices) and prescribes various parameters and allocation to the storage administrators in effectively managing the storage resources. Also with the advent of storage controllers, shared storage and virtualization has become easier.

As IT usage and automation increases, enterprises are prioritizing storage. This is because the organization’s entire digital assets reside in the storage infrastructure. If data has to be accessed from anywhere and at anytime, the storage architecture a CIO is putting in place makes all the difference. As an Aberdeen research aptly sums up, " A storage infrastructure has to fundamentally do three things—store data, move data where needed and make the previous two manageable. Probably the biggest challenge a CIO has to deal with is managing these three effectively and arriving at a storage management infrastructure!

Shared storage
In simple terms, shared storage is nothing but sharing of contents between multiple client entities by putting in place a combination of technologies at work—like NAS, SAN, tape, virtualization etc. The idea behind a shared storage is to consolidate the gamut of data that runs through the enterprise. For instance in a robust data-sharing environment, users will be able to share data irrespective of the platform on which it runs. For example a Windows application can be shared with a user running UNIX. This seamless integration is the major advantage of shared storage. Lets sample another scenario—when an enterprise with a typical DAS architecture has a large number of RAIDS (Redundant Array of Independent Disks), by consolidation, the number of RAID systems can be narrowed down to two or three units. The return on this kind of RAID revamp will be the drastic increase in the per user storage allocation which is between ten to 15 times after consolidation.

Networked storage and SMEs
As networked storage grows rapidly in the Indian marketplace, and gain acceptability among Indian enterprises, the SMEs are still reluctant to take the bait. Most of the SMEs are still limited to DAS (direct attached storage), and are reluctant to migrate to even NAS, forget SAN. The principal reason behind this reticence is plain economics, the perceived notion that SAN is an expensive proposition especially for an Indian SME kind of set up. The perception remains that adding an NT server is cheaper option than having a NAS or an entry-level SAN.

According to Gartner estimates, SAN would account for 49% of the storage revenue pie in India this fiscal, but the SMEs contribution towards this would be negligible. And one big factor that hinders SMEs march to adopting SANs is the ubiquitous complexity in setting up a SAN solution.

There is no single, open standard as yet for interoperability between SAN management products from different vendors. They can be set up in myriad permutations, and include many connections among host bus adapters, switches, RAID disks and SCSI or Fibre Channel disk arrays that enable storage solutions on multiple platforms and operating systems. Add to this, a huge installed base of proprietary components, and SANs become somewhat of a nightmare to manage.

Coupled with this, the majority of SAN management software, with the exception of the data management sector, is still tied to specific hardware products. The lack of interoperable and hardware-diagnostic standards has made it difficult for vendors to present a truly heterogeneous software solution, even if they wanted to. This makes it doubly difficult for IT managers with SMEs to look for SAN deployment, as they are already constrained by lack of quality skilled manpower.

Despite the lack of SAN penetration into SMEs till now, the picture is getting brighter. This coincides, more with SMEs too facing a large influx of mission-critical data. And the storage vendors too are coming up with offerings that bring down the costs and reduce the deployment complexity of the colution. IBM’s "SAN Made Simple" offering is priced at Rs 9 lakh and can be implemented in quick time—total cycles from beginning to functionality are as little as three to four days.

SANs are now being used for local area network-free backups. A typical SAN solution can be deployed from 1 TB data onwards, with 10 servers. The increased implementation of high availability enterprise level applications such as ERP, CRM and data warehousing software even across SMEs has contributed to the growing storage market in India. These applications involve tremendous data analysis and distribution, all of which require storage.

In addition, SAN is finding its niche in storage consolidation or business continuity solutions amongst SMEs. For years organizations have been using server-attached storage, server hard disks and tapes. This makes data sharing complicated and backups difficult to administer. Storage consolidation offers flexible and centrally managed storage that can be distributed to provide the performance and availability demanded by applications. It lets organisations manage growth, control security and information access, and provide rapid response to changing business demands.

The onward march
The good news in FY 2002-03 was that all the efforts, time and money spent in educating businesses about the value of their own business data seemed to pay off. Despite the general economic slowdown, businesses finally began to perceive sound data storage infrastructure as something more than an extravagance and an actual business necessity. This fact was best demonstrated in the manufacturing sector’s rush for storage consolidation.

Though the storage market seems to have attained a preliminary level of maturity in the country, there’s still a long way to go before the market achieves its full potential. The biggest promise for storage vendors continue to be the SME segment, which is just starting to wake up to the business advantages of a sound storage plan. Though the bread and butter for storage companies will continue to come from the core segments—banking and finance, telcos, BPO and government—if the SME market blossoms, the picture next year should be even rosier.

RISHI SETH