As demand for storage continues to increase, the storage industry is showing some signs of consolidation even as innovative new companies continue to sprout.
According to IDC"s Worldwide Disk Storage Systems Tracker, factory revenue in the worldwide external disk storage systems market grew 6.7 percent year over year to US$3.8 billion in the first quarter of this year. That makes eight consecutive quarters of growth.
The total disk storage system market grew at a slightly lower year-over-year rate of 6 percent in the first quarter, according to the report.
"Storage spending is clearly trending upward as organizations strive to stay ahead of their information storage demands," said Brad Nisbet, program manager in IDC"s Storage Systems Program. "After nearly two years of positive momentum, spending on storage systems, particularly those priced less than $300,000, continues to be a top priority in the ongoing efforts to expand and rebuild IT infrastructure," he said.
EMC continued to lead in the external disk storage systems market with a 21.4 percent revenue share, followed by Hewlett-Packard with 17.7 percent and IBM with 11.5 percent.
Hitachi, which recently refreshed its product line, held the fourth position with 9.1 percent revenue share, while Dell ended the quarter with 7.7 percent in the fifth position.
"An analysis of top storage systems vendors performance over the past several quarters suggests that partnerships are becoming an important component of their market strategies," said Natalya Yezhkova, senior research analyst in IDC"s Storage Systems. "This mutually beneficial approach allows each partner to offer more complete solutions for its customers and often opens a door to new market segments and leads to growth in revenue and market shares."
Among the recent partnerships were IBM and Network Appliance. The two companies announced an agreement calling for IBM to resell NetApp"s NAS systems. Just last week, Sun has announced plans to purchase StorageTek for $4.1 billion to increase its presence in the growing storage market.
While many analysts, particularly from Wall Street, questioned Sun"s purchase, Tony Asaro, storage analyst at the Enterprise Strategy Group, said he understands why Sun made the purchase. "There are a lot of reasons they did. They wanted the additional revenue and sales force, and they get a pretty substantial service business," he said. For StorageTek, the deal represents a way to get into the disk storage market. "They"ve made moves into that market, but going with Sun gives them some instant credibility in that market," he said.
Asaro has some questions about the deal however. "You have to question any merger, because so many don"t work out," he said.
StorageTek this week unveiled its IntelliStore Intelligent Archive Solution, a new storage appliance aimed at the same compliance, archiving and regulatory market as EMC"s Centera.
IntelliStore is a Linux-based appliance that captures business data as it is archived or migrated and automatically migrates that data based on security, data protection, and regulatory requirements, said Russ Kennedy, director of software product management at StorageTek"s Information Lifecycle Management Solutions group.
IntelliStore stores data and metadata separately, offers the in-line hashing of files, WORM (write once, read many) storage, and audit trails of file access for security, said Kennedy. It also allows for searches using metadata for compliance and regulatory discovery, he said.
The files are stored on a StorageTek FLX600 storage array. The FLX600, introduced last year, is the StorageTek"s flagship disk-to-disk storage sub-system. The IntelliStore will be available this month, starting at $75,000 for a 4 TB system. Extra capacity for the appliance is available at a cost of $9,000 per TB.
While the IntelliStore is StorageTek"s entry into the midrange compliance storage market, Sun last year also announced it was developing a product, code-named Honeycomb, aimed at the same market. ESG"s Asaro said Sun has told him that if the merger is approved, the company will wait to see which system is better received. "I like the notion of having a system with the disk and tape combined like the IntelliStore. I think companies are fooling themselves if they believe they will keep all this unused data sitting around on disk for decades," he said.
While partnerships and consolidation among storage vendors and the growing commoditization of storage would indicate an industry that is shoring up its resources, plenty of new and smaller companies are attempting to gain access to the market.
One of the more recent and well-funded is Pillar Data System, a startup funded with $150 million from Oracle CEO Larry Ellison"s Tako Ventures investment firm. Pillar includes an array of storage industry veterans from IBM, Conner, NetApp, Unisys, SGI, HP, StorageTek, and Compaq. The company"s first product, the Axiom 500 server, offers SAN and NAS utilities in one system. Although not a new idea, the Axiom 500 pools both the NAS and SAN into one repository and uses a "peered NAS and San architecture," according to Pillar CEO Mike Workman.
"Our systems allow customers to deploy a NAS-only system, a SAN-only system, or build a mixed system to scale with their business. Customers can deploy many different applications on the same platform at the same time, while delivering the appropriate performance to each from a single system," Workman said.
According to ESG"s Asaro, Pillar has an interesting product and, perhaps even more important, a strong pedigree to bring to the storage market. "Pillar is a very scalable system, and they have both NAS and SAN capabilities. They have a pretty compelling technology. In addition, unlike most startups, they have some solid backing, so customers don"t have to worry that they will be gone next year," he said.
Pillar Axiom is now shipping, with a typical system starting at $70,000.