Leadership perspectives 2005.

Q1 IN LIGHT OF THE SYMANTEC AQUISITION OF VERITAS, HOW DO YOU SEE STORAGE-BASED SECURITY AFFECTING THE ENTERPRISE DATA PROTECTION MARKET?

Security continues to be a hot topic for storage administrators and management, especially where large SANs are deployed. Very little has been done to lock-down geographically distributed SAN attached storage. Most companies rely on physically secure storage arrays, switches, routers and servers to protect them from unauthorized data access outside of normal application security measures. With the increased adoption of remote mirroring, distributed iSCSI storage, and geographically distributed Fibre Channel SANs, physical security isn't enough. In the long term, the VERITAS acquisition will enable Symantec to get into the storage security market. This will take many months, and possibly years, as the two very large organizations learn to work together on common objectives.

--John Howarth, Senior Director--Storage Systems Division, Xyratex

I see no change at present. It will likely take some time for the acquisition details to be worked out, for the organizations to bond and blend and for new integrated products to emerge. Veritas was already endeavoring to move up the food chain, out of storage to some degree, and into enterprise management. They had some nice code, acquired from the Israelis, for application performance discovery, but they had a long road ahead to do anything with it. Ultimately, it might have become a thermostat for an automated IT infrastructure, but that seemed like a long way off. Missing from their tentative software stack was security, which Symantec supposedly brings to the party with the merger. I see Symantec's real contribution, however, to be a better SRM toolset than Veritas ever offered: the IP acquired with PowerQuest. I would like to see Don Kleinschnitz, who did such a good job with the PowerQuest line as CTO, put in charge of the integration. Don is good people who will not oversell technology that isn't ready for business primetime--a problem in the past with some Veritas wares.

--John William Toigo--Consultant/Analyst, Toigo Partners International

Storage-based security used to mean security for data: more and more it is coming to mean security (or, even better, integrity) of data. There is a growing realization that data represents an obligation (economic, regulatory and legal) and that "reasonable efforts" to ensure the integrity of data records may no longer be acceptable. Traditional security technologies will be incorporated into storage solutions and those solutions will be protected from both external and internal attacks. The inexorable trend toward network storage means that network security will become a necessary (if not sufficient) characteristic of all storage networks. Security of data at rest will become a factor, but will be addressed very differently for primary (application) storage and secondary (system) storage since different balances among control, access and audit must be struck for these two classes of storage.

--Kevin Daly, CEO, Avamar

Today, security is applied through a variety of security measures (both hardware and software based) sourced from different vendors. These applications work independent of each other handling specific tasks. This leaves gaps that can be exploited. This also makes it hard for IT to respond in an effective and timely manner. Better synergy among these tools is needed to help IT protect and recover from a security event. We believe more consolidation, or at minimum collaboration, will be required among vendors for IT to effectively safeguard their data.

--Sean Chang, President & CEO, Rasilient Systems, Inc.

The Symantec acquisition demonstrates the paradigm shift that is occurring in the market. Security has become the newest storage management discipline and is quickly driving the need for security based storage appliances. Security is an issue that customers across multiple industries are faced with--added to that compliance challenges with such regulations as HIPAA and Sarbanes-Oxley. As a result, we see security as an integral part of the solution offered to customers and will become a solid requirement of all Storage Companies.

--Veena Raman, Director of Strategic Marketing, nStor

Q2 WHAT TWO OR THREE STORAGE TECHNOLOGIES, HARDWARE OR SOFTWARE, DO YOU THINK WILL MAKE THE MOST IMPACT IN THE SMB/SME SPACE IN 2005? AND WHY?

SATA-based disk arrays are now well accepted and will become a mainstream product in 2005. The prices of these arrays with the 500GB drives that will available in 2005 will drive the useable cost per MB of these arrays below 2 cents per MB. This will make these arrays denser and cheaper than the equivalent tape library. This will result in the tape library moving away from "Nearline" applications into an archive only mode. Additionally, these cheap arrays will enable a host of other applications such as offsite archiving and repositories for data distribution. The acceptance of SATA arrays will also promote the acceptance of SAS-based arrays. Customers, especially SMB/SME customers, will be able to buy a single type of array and populate the array with either SAS or SATA type drives based upon their needs. This dramatic simplification of architectures will lead to a very rapid adoption of these types of arrays. Many customers in the SMB/SME space are still using direct attached storage. 2005 will likely be the year of iSCSI in this market as very low cost iSCSI/SAS or SATA enclosures become mainstream and prices for these arrays dip into the $10k range. Customers will no longer lose access to storage because their server is down.

--John Howarth, Senior Director--Storage Systems Division, Xyratex

Tough call. Obviously, S-ATA arrays are already finding homes in the SMB space because of their low cost. iSCSI may also begin to find a stronger presence there. I also like SAS as a cheaper way than Fibre Channel to connect up a lot of storage for SMBs with big storage appetites.

--John William Toigo, Consultant/Analyst, Toigo Partners International

Disk-based data protection--because it brings the greatest operational and economic advantages to this space and because it leverages the skills and resources of this segment and its suppliers (e.g. IP networking, disk storage arrays, Pentium-class servers) most effectively. It is also affordable for this market segment and represents a scalable investment. Silicon-based iSCSI storage controllers--because they will enable a new price/performance plateau for storage arrays, because they provide an integrating element for sATA and SAS technologies and because they permit low-risk scalability for this market segment.

--Kevin Daly, CEO, Avamar

iSCSI SANs--Explosive storage growth is not just happening at the Enterprise. We are living in a digital world that impacts SMB/SMEs. iSCSI SAN solutions that offer high availability, easier manageability and reasonable cost will be critical to help SMB/SME's stay ahead of the growth and management required to keep theirbusinesses running and keep their data secure. Standards Based Hardware Platforms-One issue with current ASIC based storage solutions is that they are expensive and too complex for SMBs and SMEs. In addition, storage and system vendors will have a hard time offering feature rich solutions based on traditional ASIC based designs and still make money. Standards based hardware platforms built on commodity IA architectures and running specialized storage software can offer better price performance and are easier to deploy and support. In addition they offer greater flexibility for customization to the varied needs of SMBs. Value-added Storage Software--SMBs are all about ease of use. They cannot afford storage experts on staff to manage and deploy their storage assets. Value added software that handles disaster recovery, archiving, backup, security, patch management, and provisioning can be run on standards-based hardware and can offer appliance like simplicity at price points that are still attractive to these cost conscious customers.

--Sean Chang, President & CEO, Rasilient Systems, Inc.

Emergence of SAS: Serial Attached SCSI is designed to replace parallel SCSI and will compete with Fibre Channel. It will be relatively inexpensive, easier to install than Fibre Channel, yet offers the promise of higher performance than traditional SCSI. SCSI is legacy proven technology, the expertise already exists. SAS uses the same connector style as SATA, and the same signaling and encoding, making it a reliable choice for customers who don't want to install Fibre Channel. It supports all the features of parallel SCSI and has better performance and reliability, while remaining backward-compatible with SATA devices. SAS will eventually dominate FC.

SATA will continue to grow significantly: SATA will continue to create huge market opportunities as inexpensive network storage products. As companies look at consolidating storage and reducing overall costs. SATA is a compelling alternative. There has been widespread industry support and we will continue see SATA move up the food chain and capture a larger portion of the middle to upper tier of the storage market. SATA drives, cheaper and less robust than either SCSI or Fibre Channel drives, are often just fine for any number of enterprise IT tasks.

Storage Management & Data Protection: The complexity of data and integration of solutions has increased the need within the SMB/SME arena for automated, self-healing offerings. We are starting to see simplified offerings of SRM packages, snapshot, replication and easy to use backup and restore packages move up the priority list for customers. We will begin to see more and more appliance type offerings in this space as customers seek an all-in-one solution as opposed to having the additional burden of integration.

--Veena Raman, Director of Strategic Marketing, nStor

Q3 CONSOLIDATION IN THE STORAGE INDUSTRY SEEMS TO BE ACCELERATING. WHAT FURTHER MOVES DO YOU ANTICIPATE IN 2005?

EMC will of course buy 4-5 more software companies in 2005. It will be interesting to see how the relationship between Symantec and EMC works out. I would expect that CommVault will vanish to one of them.

Of the start-ups there will probably be only one independent iSCSI company left at the end of 2005. Most will disappear or be swallowed up as EMC, NetApp, IBM, and Dell get serious about the market next year.

--John Howarth, Senior Director--Storage Systems Division, Xyratex

If you are referring to corporate consolidation, I think what you are really seeing in the big name equipment manufacturers is an effort to rearrange deck chairs on the Titanic. As a friend recently shared with me, a lot of the purchasing by Big Iron guys seems aimed at taking lower cost/equal value competitors off the market--an effort to sustain the overly-large profit margins from what is increasingly commodity stuff. They can't do this forever, though. When it costs a couple of hundred dollars to build an array offshore that is sold by the brand name vendors for several thousand dollars, there are inevitably alternative vendors who will get the same gear from the same sources and sell it cheaper. Every time one of these small players is sucked up, five more pop up behind them. So, the big vendors may continue their purchases of alternative providers, but this will have to end eventually.

--John William Toigo, Consultant/Analyst, Toigo Partners International

Hardware consolidation is inevitable. This has, very likely, (almost) run its course at the component level and is moving up-scale. Linux and Windows will homogenize and will lead to a declining differentiation based upon operating system. Differentiation will necessarily become based upon functionality built between the hardware/OS base and the application layer and upon services. Given this scenario, organizations dependent upon traditional differentiators will be seriously challenged and will become targets of dominant players in order to get access their existing market share. The strong will get stronger, the weak will get weaker and differentiators such as cost of ownership and manageability will become the most valuable assets for competing players.

--Kevin Daly, CEO, Avamar

Value-added storage software continues to be a hot area for acquisitions in the storage market. System and storage vendors see greater revenues and profits in storage software that complements their hardware and services. We expect continued software acquisitions from system and storage hardware vendors.

--Sean Chang, President & CEO, Rasilient Systems, Inc.

As companies seek to address application-specific storage needs, vendors will acquire a select few to round out their overall portfolios, yielding in solutions focused product offerings. As a result, customers will streamline their storage management and consolidate the number of vendors they support. This shift from best-of-breed products will focus around fewer vendors that offer integrated products and services. We will also see leading companies, such as Cisco and others entering the storage market as they build more intelligence into the switch and overall fabric. We will continue to see consolidation among hardware and software companies as vendors integrate value-added offerings to move up the value-chain.

--Veena Raman, Director of Strategic Marketing, nStor

Q4 AT THE SAME TIME, INNOVATION SEEMS TO BE SLOWING. IS THAT A RESULT OF CONSOLIDATION, OR THE SLUGGISH ECONOMY IN GENERAL? DO YOU SEE A CHANGE COMING IN 2005?

Not really. The Storage market is maturing and the growth has slowed--that generally slows innovation. The focus is going to move to higher volume and lower prices as former enterprise capabilities are leveraged down into the lower end price range of the market in 2005.

--John Howarth, Senior Director--Storage Systems Division, Xyratex

I don't think that innovation has slowed. Little guys have all the bright ideas, owing in part to their lack of install base. Look at Avamar Technologies and Revivio: two very innovative companies that are just now coming into their own. The big guys are wringing their hands wondering what to do about them, since their technology cuts into profits from their existing proprietary software-plus-hardware plays.

I think the biggest innovation this year may well come from Adaptec. With the SNAP acquisition, they now have the capability to enable consumers to custom configure and purchase exactly the kind of storage they need for their applications--no one size fits all with 30-plus percent of software features unused or wasted. The innovation really needed today is innovative delivery models. We need to get all of the small, point software vendors working with an Adaptec to create highly manageable Lego building block approach to storage provisioning. Only when this is done, can we begin discussing concepts like ILM with a straight face.

--John William Toigo, Consultant/Analyst, Toigo Partners International

Innovation is not a smooth process. The scale of the market necessarily drives "in stream" developments toward incrementalism ("... let's polish this apple one more time."). Innovation will be driven by new needs and new realities. Geographically distributed work groups, continuity of operations in stressed scenarios and, yes, even regulation such as compliance will be the drivers of innovation because they present problems least effectively solved by incremental variants of existing approaches.

One other source of innovation is technology crossover. Some of the most innovative storage system designs today are drawing on such diverse technologies as cryptography, distributed operating systems, information processing and synchronization--not traditionally considered core storage technologies. This "new technology blood" is also an engine for innovative change.

--Kevin Daly, CEO, Avamar

Many of the exciting innovations in storage continue to be generated by startups. Larger companies risk established revenue streams by introducing disruptive technologies so they resist launching them. The slow economy has also affected funding for startups. With the economy improving and demand from customers for new innovation, we see acceleration in storage innovation.

--Sean Chang, President & CEO, Rasilient Systems, Inc.

The storage industry as a whole is recovering from its slide over the last three years. We are finally beginning to see a modest sign of recovery as the global economy improves. Analysts believe that the storage demand presently ranges from 30 to 50 percent annually, depending on the source of the research. We believe that compliance, fixed content and long-term archival requirements will be the strong drivers of storage demand in 2005.

Additionally, there has been some consolidation as companies look to do more with what they have and streamline their budget expenditures. Increased data content is affecting all segments from the home to enterprise. We believe that 2005 will reflect significant growth in the SMB/SME space, whereby customers will demand a more solution integrated approach that provides price/performance, ease of use and management simplification. New technologies such as SAS and high availability multi-raid options will emerge that change the application landscape.

--Veena Raman, Director of Strategic Marketing, nStor

Q1 IN LIGHT OF THE SYMANTEC AQUISITION OF VERITAS, HOW DO YOU SEE STORAGE-BASED SECURITY AFFECTING THE ENTERPRISE DATA PROTECTION MARKET?

Storage-based security will enhance the overall enterprise data protection market. This trend has very little to do with Symantec's M & A activity and very much to do with disk and array vendors putting in more 'smarts' into disks (themselves) and controllers.

Q2 WHAT TWO OR THREE STORAGE TECHNOLOGIES, HARDWARE OR SOFTWARE, DO YOU THINK WILL MAKE THE MOST IMPACT IN THE SMB/SME SPACE IN 2005? AND WHY?

iSCSI and SATA. These are disruptive technologies because of their inherent SMB 'good enough' qualities and their cost points relative to FC.

Q3 CONSOLIDATION IN THE STORAGE INDUSTRY SEEMS TO BE ACCELERATING. WHAT FURTHER MOVES DO YOU ANTICIPATE IN 2005?

The trend is favorable to small, niche software companies being acquired by larger, horizontal blended (hardware and software) companies.

Q4 AT THE SAME TIME, INNOVATION SEEMS TO BE SLOWING. IS THAT A RESULT OF CONSOLIDATION, OR THE SLUGGISH EONOMY IN GENERAL? DO YOU SEE A CHANGE COMING IN 2005?

I disagree. Innovation is continuous and accelerating as we follow the exponential curves of Moore's Law and other inherent industry behaviors. What is slowing down is the market's ability to absorb much of this innovation because of the lack of corresponding market education and the lack of willingness on the part of enterprises to change their operational procedures. This will not change in 2005.

--Rob Peglar, Vice President and Chief Technologist, XIOtech