The overall external storage market grew by 18% during FY 2004-05 to reach Rs 565 crore from the FY 2003-04 revenues of Rs 479 crore. What was of more significance was the gradual shift from DAS towards a network storage architecture, particularly storage area networks (SANs) or even network area storage (NAS). The network storage market, both SAN and NAS combined, grew by 39% to reach Rs 311 crore, up from Rs 225 crore a year earlier. At the same time the DAS market, a long time favorite of Indian enterprises, dwindled by 7% to be pegged at Rs 254 crore. All leading vendors like EMC, HP, NetApp, Sun, IBM and HDS recorded higher growth figures for their SAN and NAS offerings. However, overall, it was the year for EMC as it pipped HP to the post finishing at #1, while NetApp too climbed the ranks to finish third in the overall pecking order.

IP SAN's Impactful Debut
Within network storage, SAN garnered a lion's share of the overall pie-at Rs 236 crore it accounted for 76% of the overall sales, up from 70% in FY 2003-04.While traditional fiber channel SANs still ruled the roost, the emergence of IP SANs really tilted the scales. A spate of IP SAN deployments across enterprises including even SMBs, accelerated the move away from DAS. Organizations who were hesitant to go for fiber channel SANs earlier, perceived as expensive, made the move towards IP SANs during the year. These IP SANs promised the same level of performance as fiber channels, albeit with a slimmer price tag and a simpler network topology.

Since IP SANs used the iSCSI protocol, they offered SAN-like functionality over industry-standard TCP/IP and Ethernet. IP, in turn, offered cost benefits, as Ethernet was significantly less expensive than its fiber channel equivalent. It also addressed inter-operability and network management issues, both crucial for all enterprises. In addition, unlike IP, fiber channel cannot be easily transported over a WAN. No wonder, therefore, that even other than SMBs, many larger organizations too went for IP SAN in FY 2004-05. Particularly, since it facilitated both storage consolidation as well as provisioning.

Since IP SAN finally succeeded during the year in marrying off SAN to TCP/IP, iSCSI also became the de facto industry standard. By carrying SCSI commands over IP networks, iSCSI facilitated data transfer over an intranet and helped IT teams remote manage storage from afar. The iSCSI protocol was, therefore, among the key technologies that helped SAN deployment filter down to small and medium organizations. Amongst SMBs, it was typically the technology, media and healthcare companies that witnessed a larger deployment of IP SANs.

However, all this brouhaha over IP SAN should not imply that there were no takers for traditional fiber channel SANs. All the large telecom service providers went for multiple SANs-as their customer acquisition spree continued unabated, it generated voluminous data that required meticulous management. It also meant correct generation of a large number of bills, as otherwise the very viability of the businesses for telcos would have been lost. The experience of telcos indicated that though IP SANs gained ground, fiber channel SANs were still preferred by larger enterprises for their mission-critical applications. The perception remained amongst large enterprises that IP SAN was neither as robust nor as secure as fiber channel.

One interesting strategy followed by some vendors was to push IP SANs as a complementary technology to fiber channels. IP SANs were used to consolidate existing SANs at the high end, but fiber channel was preferred for the high–end applications. Banks were the early adopters of this strategy-many of them still had fiber channels for their core applications, but went for IP SANs as their nearline storage. This was killing two birds with one stone-IP SANs cost nearly the same as tape libraries so the shift to random access for archived data was done at no extra cost; besides, it enabled them to reduce content on online fiber channel. ICICI Bank was a typical example-while it had only islands of fiber channel, for consolidation purposes it moved from DAS to IP-SANs in many cases.

ICICI's case indicates the other trend responsible for the shrinking DAS market. Other than the price factor, many organizations could not grapple with the complexities of fiber channel and were, therefore, still remaining with DAS. However, with growing data and the need for a centralized data management system it was only in FY 2004-05 that they discovered a new manna in IP SAN with simple management from a GUI screen. As a result, 65% of the IP SAN deployments recorded in the country were directly from DAS-typically, organizations which followed the DAS to NAS route still went for fiber channel when they migrated to SAN.

SAN's Virtualization Catalyst
The maturity of storage virtualization as a technology was another factor that helped in the growth of SAN, particularly the traditional fiber channel variety, during the year. While SANs promise superior performance and flexibility, their benefits were outweighed by their complexity. Many Indian enterprises, nearly 60-70% of the ones on SAN, adopted the concept of storage virtualization to take full advantage of the SAN technology. Through storage virtualization, storage devices from several vendors were consolidated into a virtual storage device.

Not only the consolidation of resources, it also allowed policy-based automation as well as automated backups. Virtualized storage was not restricted by the capacity, speed or reliability limitations of physical devices making up the virtual storage pool. This gave customers the ability to choose storage hardware independent of the functionality that they needed from it, and to change it and upgrade hardware without disrupting existing data. Deployments of storage virtualization during FY 2004-05 took place in the BFSI, telecom, and oil and gas verticals. This was logical considering that these sectors were early SAN adopters and, therefore, also the first to realize the advantages of storage virtualization. Their cost savings were significant, and solutions were consistent across platforms.

On the vendor front, SAN was extremely lucrative for all the leading players. Particularly since everyone pushed down SAN prices to accommodate the pockets of Indian customers. An entry-level SAN box in FY 2004-05 cost as little as Rs 2.2 lakh as compared to Rs 7 lakh in FY 2003-04. One important factor behind EMC's dramatic rise in the overall storage sweepstakes was its super success in bringing SAN prices down to make it affordable for the SMBs. The shift from the high end to accommodate customers in the mid-size segment was seen from the fact that EMC's cheapest solution used to be priced at around Rs 25 lakh, whereas in FY 2004-05 the company's entry-level box AX100 CLARiiON went for Rs 2.8 lakh. On the IP-SAN front, a new entrant, Intransa, tasted immediate success by closing more than 15 accounts across verticals in less than one year.

NAS Losing Ground?
SAN might have grown by 49% during FY 2004-05, but NAS failed to match this scorching pace, growing at only 12% to reach Rs 75 crore, thereby constituting just 24% of the overall network storage pie. NetApp, HP and IBM were the top three players in the Indian NAS segment. India proved to be a particularly happy hunting ground for NetApp, contributing roughly 15% of its Asia Pacific NAS revenues in FY 2004-05. Again, it was the question of NAS becoming affordable for the SMBs-NetApp's Fabric Attached Storage (FAS) FAS900 Series and FAS200 Series have contributed significantly to its Indian sales.

SAN majors such as HP tried to catch up with NetApp in the NAS sub-segment using their SAN strengths. For instance, HP tried to use the installed base of its SAN deployments for selling its NAS products. It recommended NAS boxes to its existing SAN customers for hosting non-critical applications. The biggest growth areas for HP proved to be BPO, banking and software development. It also saw growth from banks using NAS devices for branch-level backups. EMC capitalized on its SAN strengths to sell the EMC NetWin NAS Server (based on Windows Storage Server 2003). At Rs 2.92 lakh, the NetWin 110 NAS was marketed as a cost-effective solution for organizations looking to implement NAS for the first time.

Another development in the NAS space during FY 2004-05 was the acceptance of Microsoft's Windows Storage Server (WSS). HP and EMC, among others, released entry-level WSS-based NAS boxes during the year. For both vendors, WSS gave them a quick way to release a fairly robust entry-level NAS box at a competitive price point. In India, HP and Microsoft pitched entry-level NAS boxes as a plug-and-play platform for dedicated file and print services, disaster recovery or backup and for file server consolidation. SMBs were looking for cost-effective options for storage and retrieval of e-mail mailboxes. HP wanted to position its NAS boxes as a viable option for this segment. The importance of the HP-Microsoft alliance can be seen from the fact that it managed to target 5,000 Microsoft Exchange customers in India.

The FY 2004-05 also saw small players such as Tulsient coming out with entry-level NAS boxes that cost less than $500 per box. These devices started with a capacity of 360 GB and scaled up to 2.4 TB in the same enclosure. Tulsient believed this approach suited SMBs to a tee, because this flexibility allowed companies deploying NAS to have fixed configurations giving rise to the phenomenon of forklift upgrades. NAS vendors also geared up to address compliance issues. For example, NetApp's product, SnapLock backed up new or changed files only once. This feature was designed for use for organizations complying with regulations such as HIPAA, wherein medical records are meant to be unchanged.

The convergence of SAN and NAS also accelerated during the year. While primarily SAN vendors like Hitachi or EMC promoted NAS gateways, NAS vendors like NetApp pushed iSCSI. For example, EMC's NetWin NAS server could also be used to expand the capabilities of an existing SAN by enabling it to perform NAS functions as well. This SAN-NAS consolidation definitely helped enterprises reap better RoI.

Tapes Rejuvenated
According to a Purchasing Intentions Survey conducted by TechTarget amongst more than 1000 CIOs globally, in 2004, 79% informed they were likely to either increase, or at least maintain, their tape storage spending in 2005: while 48% would maintain the status quo, 31% opted to spend more on tapes and tape-related storage products. Nothing could have been a more absolute rebuttal of the growing perception that tapes are on the verge of extinction, gradually being replaced by disks as the most convenient form of storage. The scene was no different in India, though owing to falling prices the market could grow only by 14% to reach Rs 179 crore from Rs 157 crore in FY 2003-04.

Within tapes, India witnessed a preponderance of the low-end and mid-range variety-at Rs 97 crore and Rs 69 crore, respectively they constituted 54% and 39% of the overall secondary storage market (mainly tapes) for FY 2004-05. While DDS/DAT mainly constituted the low-end of tapes, it was primarily DLT/VS and some part of DDS/DAT that made up the mid-range variety. The enterprise part was made up by LTO, another form of secondary storage based on open standards developed by a consortium of HP, IBM and Quantum (strengthened with the acquisition of Certance from Seagate). Tandberg also joined this forum during the year as a full licensee. A large part of LTO also incidentally came under the mid-range category.

In the overall Asia-Pacific secondary storage market, India ranked second only behind Australia with 19% of the overall market share. However, it was still primarily DDS/DAT and DLT/VS that ruled the roost, with LTO yet to make deep inroads into the Indian market. There were even lesser takers for proprietary technologies like Travan and AIT/VXA. It was primarily a three-horse race between HP, IBM and Quantum-with HP at nearly 45% having the lion's share followed by IBM and Quantum. Vendors like StorageTek and Exabyte, however, managed to carve out their own niches. While new technologies emerged on the scene, tape continued to be the preferred medium for long-term archiving. India also continued to be a big market for these tape vendors.

That tapes continued to go strong could be seen from the spate of product launches that happened during the year. The market leader HP launched StorageWorks Ultrium 960 tape drives based on WORM (Write Once Read Many) technology that could provide backup of up to 800 GB on a single cartridge. This was subsequently followed by the launch of the SDLT 320 and the DLT VS 160. Quantum also announced the launch of the SDLT 600 tape drives in India. These offered double the capacity of the earlier version (SDLT 320) for a 20% hike in price. All SDLT 600 tape drives included the built-in intelligence of DLTSage, a suite of predictive diagnostic and management tools designed to ensure that data backups are completed successfully and both drives and media can be properly managed by IT administrators to prevent system outages. In November 2004, Exabyte released Magnum 1X7 LTO Autoloader, an automated backup and restore system followed by the Magnum Tape Drive (LTO-2), an external LTO-2 tape drive.

The next generation of LTO technology in the form of LTO3 made its appearance in 2004. Players like HP, Quantum and Exabyte came out with LTO3 solutions during the year. LTO3 doubled the capacity to 400 GB uncompressed, while the data transfer rate also doubled to 80 Mbps. This LTO tape enhancement played into the ILM space because organizations could use tape for deep archiving or backup, while optical jukeboxes helped with archiving and WORM support. The improvements in the ILM product line focused on discovering and classifying data in storage tiers and then moving that data into appropriate storage-either disk, tape or optical storage-based on its importance, how accessible it must be, frequency of use and relevancy.

Just as HP StorageWorks Ultrium 960 tape drives based on WORM were launched, Quantum also enabled WORM into a disc drive with its M series range of tape drives. The introduction of WORM tape provided an extra layer of long-term protection, ensuring that data could last in an unalterable form for years if not decades. WORM tape storage gained popularity during the year for its ability to meet regulatory requirements such as HIPAA and the Sarbanes-Oxley Act.

The FY 2004-05 saw Indian enterprises adopting disk-based backup. Although tape continued to be a prime medium for long-term archiving, backups were increasingly being taken onto disk due to the need for an ever-shrinking backup window, as critical data applications could not be subject to downtime for hours on end while a backup is written to tape. Disk-based backup became particularly popular amongst SMBs and entertainment companies where rapid retrieval and zero data loss are important.

It took two hours to back up 1TB of data onto a tape, whereas the same amount of data could be backed up in less than 30 minutes using a disk-to-disk backup. With technologies such as SATA (Serial Attached Technology Attachment), disk drives therefore started giving tapes tough competition. SATA drives were designed to offer higher data transfer rates, simpler RAID integration and faster HDD installation as compared to parallel ATA predecessors. Nearly 70% of installations in India were still on PATA (Parallel Attached Advanced Technology Attachment) and their graduation to SATA drives would still take some time.

Soaring Storage Software
The storage software market witnessed the highest growth of 25% amongst all three storage segments to reach Rs 110 crore, up from Rs 88 crore in FY 2003-04. Veritas led the pecking order followed by EMC (thanks to its Legato, Vmware and Documentum acquisitions) while HP, IBM and CA made up the top five. Backup and archival software still enjoyed a lion's share of the Rs 59 crore that constituted 54% of the overall storage software market; however, storage replication software witnessed the maximum growth of 86% to reach Rs 26 crore in revenue. Storage software was incidentally one of the strongest performers in the overall IT market as a result of increased interest in data protection and tighter legislation around data storage

Continued customer spending on software for data protection, storage resource management, and compliance helped to drive this positive growth during FY 2004-05. Spending growth related to data protection, including replication, backup, and archival software, was an indicator of customers' continued concerns about application availability, data management, and business continuity. This best exemplified the stupendous growth witnessed in storage replication software during the year. This was a tool that created a second copy of a back-up for disaster recovery. Incidentally, it was not only the storage vendors-even enterprise application vendors like Oracle, Sybase and Microsoft with their replication tools contributed towards this kitty.

The primary areas of concern during FY 2004-05 when determining which technology to use in a storage infrastructure, were no longer just capacity, performance, and price-the traditional axes of comparison. Instead, effectively managing storage became a top priority, and it was this area in which enterprises were willing to invest heavily. But the move to a focus on storage management was only the first step in what promised to be a two-step dance for storage administrators.

The next step was tying storage management with other infrastructure-management applications such as data management, network security, event automation and performance management, and platform virtualization. In the overall run, the focus in storage shifted during the year from the hardware infrastructure (eg servers, peripherals) to the software infrastructure (eg a component of an overarching infrastructure management layer). The shift in emphasis from storage hardware to storage software is already well underway during the year. And this was reflected in the 25% increase that also boosted the overall storage market growth.

Vendors who have traditionally specialized in the external storage space earned higher margins from storage software largely on account of the commoditization of external storage. Sector-wise BFSI, Telecom, ITeS, manufacturing and government were among the biggest spenders on storage infrastructure and solutions. Banks led the pack for the during FY 2004-05-there were five banks amongst the top ten IT spenders in India during the year. As banks needed to follow RBI regulations such as the Basel II and the Sarbanes-Oxley Act, they had to ensure that data is stored properly for the required timeframe. Veritas brought products to market for addressing the needs of SMBs. Netbackup 5.0 Server helped organizations to replicate data automatically to a safe site. It also launched the Backup Exec 10 suite in January 2005 that claimed to help SMBs consolidate their data and centralize their IT infrastructure.

Archiving E-Mails
E-mail archival gained prominence in 2004. For instance, almost 80% of Internet usage went towards the use of e-mail services. According to different regulations such as the Sarbanes-Oxley and HIPAA, every organization needed to archive its e-mail. As Indian organizations went global, the need to comply with different regulations, and in turn, the need for e-mail archiving was felt. E-mail, document management and instant message archiving were mandatory for regulatory compliance, legal discovery and business continuity practices. In India, the vendors were bullish about the emerging e-mail archival market. EMC looked at e-mail archiving as the next logical step. Its acquisition of Legato and Veritas, acquisition of KVS were done with the rationale that backup ensures that data is protected and stored appropriately. Archiving went a step further and simplified the process of managing and finding data.

Vendors positioned e-mail archiving as an effective tool for lowering the TCO of storage. Veritas pushed its solution as one that addressed the availability and performance of MS Exchange by archiving e-mail that is infrequently accessed. The archive could be kept on low-cost storage devices driving down the total cost of the Exchange system. EMC also offered an upgrade to its Legato EmailXtender archiving software that featured support for MS Exchange 2003. Apart from the usual functions, the EmailXtender mapped all e-mail against policies specified at the mail server, thereby freeing the mail server for mission-critical applications. Similarly, NetApp's LockVault identified data in spreadsheets, presentations or home-grown file formats that might fall under the ambit of regulatory compliance. These solutions permitted unstructured data backup by copying and storing only the unique blocks of data that have been written since the most recent incremental backup.

Rajneesh De