Expo marks the spot
With the sector thriving, Storage Expo 2002 promises to be a major event. Paul Bray examines how the market has changed over the past year.
Storage is probably as near as the IT industry gets to a recession-proof business.
The requirements of the average organisation are famously reputed to double every year, thanks to increased use of email, customer relationship management, enterprise resource planning, the web, intranets and graphical and multimedia applications, to name but a few.
By 2004, research firm IDC predicts that the world storage market will have grown to be worth $71bn.
But the storage market is not the same as it was 12 months ago, when the UK's only storage-specific trade show, Storage Expo, was launched.
Delegates arriving at the 'bigger-and-better' Storage Expo 2002 next week will have more on their minds than merely shovelling extra disks and tape drives into their data centres.
"The economic slowdown hasn't stifled the dynamic growth in data consumption," said Ian Lockhart, strategic projects manager at storage distributor Ideal Enterprise Solutions. "But it has caused budget cuts and stringent requirements to justify purchases."
The result, according to Lockhart, is a Catch-22, where firms cannot afford mushrooming expenditure on storage, but cannot risk the business consequences of running out of space.
New approach
The first effect of this has been to change attitudes to storage. "People are trying to drive storage up the business food chain to make it more of a business issue," explained Harvey Bremner, director of Storage Expo.
So this year's show will feature briefings on how IT managers and storage professionals can make a specific business case for storage to their finance directors.
General warnings that a company may run out of storage space are no longer enough to convince the board to sign the cheque, warned Bremner.
Whizzy new technology is off the agenda, unless its real-world benefits can be clearly demonstrated through, for example, case studies.
"The requirements of storage solutions follow a common theme of data protection, management and availability," said Paul Talbut, a director of the Fibre Channel Industry Association. "Any solution that provides one or more of these imperatives, in a way that saves the customer money, will be successful.
"Customers tend not to care so much about technology, other than ensuring that they are not buying something proprietary or non-standard."
Storage has become a tactical, not a strategic, purchase, according to Garry Elliott, UK country manager at Network attached storage (Nas) and storage area network (San) vendor Auspex.
"Companies are having to assess their storage needs from month to month rather than planning ahead," he said. "The economic slowdown has had a major effect on storage vendors, forcing them to change product lines and costs to shift products.
"Content-aware storage and virtualisation are having to take a back seat as users are requiring immediate solutions to solve the storage pile-up."
Improved utilisation
Instead of buying more and more capacity, businesses are increasingly anxious to make better use of the storage they already have. This is not difficult, considering estimates suggest that only a third to a half of installed storage space is actually used.
"Since last year there has been a clear focus on reducing costs and increasing efficiency," explained Sean Jackson, EMEA marketing manager at back-up software vendor BakBone. "It's no longer acceptable to keep adding more hardware and software. The key theme for us is doing more for less."
Resellers need to be sensitive to this. "Instead of 'pushing storage', resellers need to show their customers how to save money through resource consolidation," suggested Scott Brooks, EMEA sales director of Fibre Channel and storage management vendor LSI Logic.
"We're encouraging resellers to talk to their customers about how they can save money by consolidating servers, storage and administration through implementing San systems with storage management software.
"They should provide customers with a total cost of ownership analysis and demonstrate the business, operational and financial benefits of consolidation to be successful in a tight market."
Storage management, which can help companies simplify and automate the management of storage, as well as cut down on staff illicitly hogging storage for private use, is high on the agenda. IDC has reported that the world storage resource management market grew by more than 27 per cent last year.
At Storage Expo, Fujitsu Softek is promising customers at least a 25 per cent improvement in storage utilisation with its storage management software or their licence money back.
Brooks pointed out that the worsening IT skills shortage increases the attractiveness of management software, which allows fewer people to manage more storage.
Richard Stinton, business development manager for storage solutions at systems management software vendor BMC, suggested that companies need better co-ordination of their existing storage resources.
"Companies buy storage on a project-by-project basis without really knowing how it's being used," he explained. "Most analysts agree that data needs to be viewed in the context of the business application it is being used for, making it far easier to spot whether it is irrelevant, duplicated or obsolete."
When new investment is made, it is increasingly likely to be in networked storage such as Nas or San - which can be shared and reallocated to suit business demands - than less flexible direct attached storage (Das).
Converging technologies
In a way, the debate between the three types of storage is becoming less important as they converge and consolidate.
Visitors to the Ideal Channel Zone at Storage Expo can see demonstrations of Das to San migration, as Das disk arrays are moved into a San environment without loss of data.
Nas can already form part of a San or use San disk resources, and in future, Nas and San are likely to converge still further.
The ultimate in convenience and cost-effectiveness would be to pool all of an organisation's storage devices so that they appeared to be a single storage device, managed automatically from a central point on the network.
The concept already exists, under the name virtualisation, and promises dynamic reallocation of capacity, upgrades without downtime, and support for heterogeneous, multi-vendor networks.
However, buyers don't seem to want virtualisation yet. "Virtualisation is a niche market. There are quite a few approaches, and in some cases performance is a concern," said Lockhart. "The introduction of standards is a long way off."
Another casualty of belt-tightening and reluctance to innovate among user companies is the storage service provider (SSP).
A couple of years ago, SSPs were expected to clobber traditional storage sales by providing storage as a managed service via the internet or other networks.
But according to IDC, by last year the SSP market had shrivelled until few pure-play SSPs were left. If the model has a future, it is likely to be with telcos or large outsourcers.
By contrast, the provision of other services by storage firms is burgeoning, and several vendors have recently launched or beefed up their services offerings.
IDC forecasts that the European storage services market, including consulting, integration, management and support services, will grow to $10bn by 2005.
"Although storage hardware will continue to be commoditised, and it will be cheaper to add capacity to existing storage implementations, the rigours of building and managing a networked storage environment won't be overcome in the near future," warned Doug Chandler, director of IDC's storage and data management services research programme.
"This should lead to solid spending on outside help for storage consulting, integration and management."
Reseller opportunities
Much of this spending could come to resellers, if they play their cards right. "Resellers are essential to the storage market," said Elliott. "All vendors are developing their channel at the moment, because resellers can offer integrated solutions to customers, rather than individual components.
"They can also offer additional services and consultancy that vendors can't provide themselves."
This year has been a good one for storage resellers. "Over the past 12 months, we've seen signs of strong growth from the channel, which will play an increasingly important role in the delivery of storage solutions," explained Talbut.
Resellers can add value at every stage of a storage sale, from audits, recommendation services and pre-sales consultancy, to solution integration, installation, migration, remote diagnostic support, implementation of data management tools and policies, and staff training.
While hardware margins remain tight, this is where the best profits are to be made. Smaller businesses will provide good opportunities for resellers to offer a one-stop shop for storage, especially now that San vendors are starting to target them.
"One of the key themes of Storage Expo 2002 will be tapping the vast potential of the SME market," said Bob Aitchison, European region manager at San infrastructure vendor QLogic.
"SMEs have always been restricted from implementing a San by the potential cost and complexity. Now a number of vendors, including us, are introducing entry-level products aimed specifically at SMEs."
Experience counts
However, inexperienced resellers which clutch at storage as a life belt in choppy economic seas are unlikely to succeed. Nigel Ghent, marketing manager at vendor EMC, recommends vertical market experience.
"For many vertical segments, knowledge of specialist applications and specific industry business processes is the key to growth," he insisted.
Resellers must also be prepared to invest to enter new markets, according to Lockhart.
"The entry costs for delivering enterprise San solutions can be quite high, requiring technical expertise and, now just as importantly, consultative skills to define business requirements, map the storage architecture to the applications, and ensure that a return on investment can be delivered," he explained.
While vendor accreditation and training are sometimes essential, canny resellers are wary of vendors' motives.
"There's been a rush from almost every vendor to announce their own accreditation schemes, and some are making the retention of reseller status dependent on it," said Talbut.
"While accreditation is important, I suspect that resellers see this as a cynical move driven by the chance to derive training revenue. They should resist such pressure, and look to industry-accepted accreditation, and those they think are vital to their own success."
The resellers that get the balance right, however, should have plenty to celebrate by the time Storage Expo 2003 comes around.
IT'S SHOW TIME
Storage Expo is firmly established as the UK's premier event for buying and selling storage solutions.
Claimed to be the UK's only storage-specific show and the largest event of its kind in Europe, Storage Expo 2002 will be nearly twice the size of last year's inaugural show, with about 80 main exhibitors representing a Who's Who of the storage market.
Virtually all the main UK players will be there, according to the exhibition organiser, Imago Group, either on their own stands or appearing with partners.
Two thousand people attended last year's show, nearly twice as many as expected, and the target for this year is 2,500.
At least 80 per cent are likely to be IT people, mostly generalists, although delegates also include a smattering of specialist storage managers, a job title almost unknown last year.
"It will be very much an end-user show," said the exhibition's director, Harvey Bremner. "We launched Storage Expo because storage vendors were demanding a show where they could meet buyers and sell to them."
The format seems to have worked. "Last year we received good enquiries and new customers as a direct result of being at the show," claimed Jeff King, director of product marketing at Nas vendor BlueArc.
"We expect this year's show to be better, since Storage Expo has become known as the key storage show to attend in the UK."
Sean Jackson, EMEA marketing manager at back-up software vendor BakBone, added: "The show proved invaluable last year.
"There had never been an exhibition where the focus on storage was so strong, and Imago's organisation was excellent. We know the right people will be visiting the show again this year."
Last year's show assumed that many visitors would be storage virgins, but the organisers expect most of this year's delegates to be highly knowledgeable and seeking solutions to specific problems.
Their main aims will be to view new technologies, shortlist vendors and, hopefully, sign cheques. "We learned last year that people are much more educated than we thought," said Bremner. "We attract a completely different level of visitor from general IT shows."
Bremner identified four main themes at this year's event. "Users are asking: 'How does this work? Will it work for me? Where do I get it from? How can I get the funding for it?'" he said.
These themes are reflected in the show's key workshops and seminars, which include Technologies Explained, So Many Vendors - So Little Time, Building the Business Case for Storage, and Creating an Information Policy.
A major innovation at this year's show is the Ideal Channel Zone, run by storage distributor Ideal Enterprise Solutions.
In collaboration with vendors and resellers, Ideal will mount working demonstrations of solutions including data replication, clustering and high availability, Das to San migration, San management, virtualisation, disaster recovery and Fibre Channel over IP and iSCSI.
The zone will also have a lounge where resellers can relax, meet customers, and imbibe a well-earned half of shandy.
CONTACTS
Auspex (0118) 940 7300
www.auspex.co.uk
BakBone (01202) 241 000
www.bakbone.com
BlueArc (01344) 408 200
www.bluearc.com
BMC (01784) 478 000
www.bmc.com
EMC (0870) 608 7777
www.emc.com
Fibre Channel Industry Association (020) 8334 8068
www.fibrechannel-europe.com
Ideal (020) 8286 5000
www.ideal.co.uk
LSI Logic (01344) 426 544
www.lsilogicstorage.com
QLogic (01483) 295 825
www.qlogic.com
Storage Expo 2002 (01252) 823 680
www.storage-expo.com