How To Sell: Storage - Part 5 - The road ahead
With the need for storage set to continue its dramatic increase, resellers need to know the technologies and trends to back. Paul Bray reports.
Pop into the bookie's tomorrow to bet on storage requirements declining in the next few years and you will get very long odds indeed.
According to Peter Coleman, of the Storage Networking Industry Association Europe (SNIA-E), its recent Storage Audit found that more than 30 per cent of respondents said their storage needs had grown by at least 100 per cent in the previous 12 months, and nine per cent had seen growth of over 200 per cent.
"The consensus of those surveyed was that this growth was set to continue at roughly the same rate over the coming year," he says.
The main drivers behind this growth were databases and email, according to the survey. But increasing digitisation in many fields, from storing CCTV footage to the Holy Grail of electronic government, is also adding to the demand.
"Between 12 and 22 petabytes of global storage is created per year," says Barry Edmonds, business manager at storage media vendor Imation.
"This is equivalent to 600 billion to 1,100 billion emails, a billion books or two billion high-resolution x-rays, which indicates some of the application drivers.
"Medical imaging, TV and radio broadcasting, banking, satellite navigation and air traffic control are all becoming digital."
Add to this the paranoia about terrorist attacks and directors' liability that has made businesses beef up their disaster recovery strategies, legal obligations to keep electronic documents, and storage resellers' tills should be ringing this year and next.
All types of organisations will need more storage, but key sectors include finance, telecoms, retail, manufacturing, utilities, health and government.
Corporates may have the most spectacular data volumes to accommodate, but the rapid growth of IT use among SMEs means their needs will mushroom too.
Doubled storage requirements are unlikely to mean doubled revenues, however.
While analysts are predicting storage sales growth well in excess of the IT sector as a whole, it is very much in the low two-digit range, not three digits. Companies, it seems, will be learning to make better use of what they already have.
"Many large data centres have embraced the concept of enterprise storage with gusto," says Mark Simmonds, general manager at IBM reseller Anix.
"But companies are now having to carefully justify policies and purchases, which for the past five years have been based on the premise of, 'Disk storage is cheap, let's get some more.'"
Coleman says scalability will be one answer, enabling customers to buy extra storage only when they need it, instead of over-provisioning and expecting to grow into the space. Research suggests that half of storage bought as 'growing room' is never used.
A lot of the storage that is in use need not be. "Recent reports show that about 80 per cent of data stored on disk can be archived," says Wayne Bugden, senior storage consultant at systems integrator HarrierZeuros.
"Before organisations consider buying more storage, they need to audit their current data to find out how it is used and how much of it is truly active.
"By consolidating active data into disk arrays, archiving as much as possible, and using storage area networks [Sans] to improve data access, organisations can considerably reduce their storage expenditure."
Far from cramping a reseller's style, this approach will offer good value-add opportunities.
"Before just taking another order for storage equipment, resellers need to question their customers' decisions and advise them accordingly," says Bugden.
"This approach can be more profitable because margins are generally higher in consultancy and there is less reliance on vendor-driven sales.
"This approach has allowed us to continue to expand our own storage division and significantly increase our client base."
Margin pressures on storage hardware, especially older technology such as direct attached storage (Das) and network attached storage (Nas), will leave resellers little option but to add value elsewhere.
"Getting away from competing on price will be a psychological hurdle for some resellers. They'll have to put the emphasis back on quality and value-add," says Seamus Twohig, product director at storage distributor Ideal.
"Rather than seeing this as a negative, they should remind customers that they offer the best service and that this comes with the necessary charges."
New disciplines and alliances will have to be developed. Dave Slater, senior European marketing manager at storage network vendor McData, says: "VARs will need to become more like systems integrators than single-vendor salon shops, and develop more understanding of storage software."
And resellers will have to decide where their key markets are. According to Paul Sangster, managing director of storage distributor Hammer, with so many different vertical markets, long-term success will increasingly require focusing on the development of specialist skills and expertise in a limited number of vertical sectors or types of product.
But if they choose wisely, the bewildering array of storage choices will work in a reseller's favour, believes Paul Trowbridge, regional marketing manager at San infrastructure vendor Brocade.
"The channel needs to realise that the vast choice of vendors, topologies - Nas, San, Das, fabric - and technologies is still confusing for some end-users, and that this is an opportunity they should seize now, while there's still plenty of market share to gain," he says.
By taking on more of a consultancy role, resellers will help their customers get to the root of their storage problems.
"Instead of simply throwing more capacity at the problem, companies should be looking to tackle storage only after key business and process issues have been identified," says Simmonds.
"This will reveal the pain points of the business, and clearly demonstrate how to address problems and present a concrete return on investment [ROI] figure."
Some observers clearly think ROI is a bit of a gimmick. "The concept of ROI has been much hyped of late, with large hardware vendors offering a range of tools designed to calculate turnover increases or cost savings over time," says Sangster.
"I'm doubtful that this can be measured effectively. In addition to initial cost, proven reliability and performance, what users want to know about a storage solution is whether or not, for example, they'll need to commit sizeable sums for maintenance and upgrades."
Steve Mackey, UK sales director at storage vendor ADIC, says: "ROI judgements are fine for applications such as customer relationship management, which are designed to increase revenues.
"More relevant to infrastructure expenditure such as storage is the broader goal of reducing total cost of ownership."
But others believe ROI will be critical in achieving sales. "Buying decisions have changed, and customers won't buy a system which doesn't clearly demonstrate financial benefits in the medium or even short term," says David French, applied technology specialist at storage software vendor Legato.
"Vendors who aren't producing clear ROI stories are finding it increasingly difficult to sell their solutions, however good their technologies. VARs will need to understand these arguments and articulate them effectively to compete successfully."
Trowbridge has clearly done his homework. "A San can offer ROI in as little as four months," he says.
"One person can manage seven times as much storage over a San. It offers increased performance of stored data and higher productivity by reducing the back-up window by up to 80 per cent and enabling higher applications availability, better performance and increased uptime.
"On average a storage service provider charges about £132 per gigabyte per year for a tier-three service, but the storage team at [one of Brocade's UK customers] HBOS provides near-tier-one service for £103 per gigabyte."
These kinds of improvements in productivity and staff efficiency will be a key selling point for storage resellers, as storage administrators will each have to look after 50 to 100 per cent more storage every year just to stand still.
Automation will be necessary, believes Bharat Kumar, director of marketing communications at storage virtualisation vendor DataCore.
"Although storage automation is still in its early stages, it has considerable potential to increase productivity by freeing IT administrators from mundane, time-consuming tasks," says Kumar.
"As storage requirements grow, rather than reducing staffing levels, automation will offer the opportunity to expand operations and storage management with the same number of personnel."
Over the coming years, as the storage market continues to develop, resellers with their eyes on the ball will clean up.
"Overall, there's a great deal of potential for the channel in 2003 because it is in a strong position to respond quickly to any changes in storage buying behaviour, particularly around new technology transitions such as iSCSI, Serial-ATA and NACs ]network accelerator cards]," says Russ Johnson, EMEA sales vice-president of storage access vendor Adaptec.
"By keeping ahead of these trends, resellers should see a number of fresh revenue opportunities open up to them this year."
TECHNOLOGIES TO WATCH
San, Nas, Das and fabric-attached storage (Fas).
They may sound like dwarves from a low-budget clone of The Lord of the Rings, but the balance between these technologies will be a key issue in the coming year.
The most successful is likely to be San, for its lower cost, lower maintenance, better use of capacity and enabling of consolidation, with departmental Sans emerging this year.
"Das is losing popularity as companies are increasingly thinking about centralising their data storage," says Tony Price, managing director of online reseller WStore.
"Nas has also suffered a setback. With Maxtor pulling out and Quantum selling off Snap, a number of companies have rethought their buying strategies, but it's gradually beginning to regain momentum.
"Sans, however, seem as buoyant as ever, and will definitely grow over the next few years as businesses look for the easiest and most cost-effective ways of managing their data."
The distinction between San and Nas will blur. "Soon users won't be able to distinguish between Nas and San," says Marije Stijnen, marketing communications manager at Quantum's storage solutions group.
"San and Nas hybrid products are emerging, or products that offer 'heads' or 'gateways' that transfer data between file-based (San) and block-based (Nas) devices and networks. Several analysts have already converged their tracking of San and Nas into a single category, with Gartner naming the new category Fas."
Fibre Channel
With speeds of 2Gbps commonplace and 10Gbps backbones emerging from late this year, Fibre Channel will be the technology of choice for data centres and high-performance networked storage, according to the European Storage Networking Industry Association's Storage Audit.
For longer-distance networks, and for companies (especially smaller businesses) that haven't installed fibre, IP-based technologies such as iSCSI will be critical, especially as iSCSI Sans become available during this year.
"iSCSI presents a significant revenue opportunity for the channel in 2003," says Russ Johnson, EMEA sales vice-president of Adaptec.
"It allows you to build IP Sans over the most common networking infrastructure, Ethernet, taking much of the fear and cost out of implementing and using an IP San.
"Following the IETF ratification of iSCSI and Microsoft's progress with its iSCSI architecture for Windows, IP storage will be one of the hottest storage topics for 2003."
Serial-ATA
S-ATA is a low-cost alternative to existing disk drive interfaces which also promises higher performance and greater reliability, It will be one of the enablers of the San/Fas revolution.
Barbara Murphy, vice-president of marketing at Raid storage vendor 3ware, outlines S-ATA's advantages.
"It can support speeds of 150Mbps with a roadmap to 300Mbps," she says. "It's a point-to-point architecture which will provide full bandwidth to every drive.
"It supports longer, more flexible cables, and will allow much easier routing within a server or Nas box. S-ATA will be a significant player in the low-cost enterprise storage market."
Storage virtualisation
This aims to separate information from the physical devices on which it is stored, but has a less certain future. "Virtualisation is facing an uphill struggle," says Price.
"Every vendor has a different take on what it actually is, which makes selling it difficult. Buying a scalable, non-proprietary solution is very hard, and a number of virtualisation start-ups have folded over the last six months."
But major vendors such as EMC, Hewlett-Packard and IBM are getting behind virtualisation. It offers the ability to combine physical resources into a single repository to increase use and reduce waste.
"You might think this reduces sales of products, but it's a great opportunity for the channel to advise customers on how best to configure their storage," says Paul Trowbridge, regional marketing manager at Brocade.
Despite the focus on efficiency in disk-based storage, tapes and removable disks will be a healthy market.
Tape will remain the technology of choice for back-ups, for its cost and longevity, and the increased focus on efficiency may increase demand as no-longer-used data is archived.
SME opportunities will be particularly good, as tape solutions become cheaper and easier to manage. Linear Tape Open and Super Digital Linear Tape technologies will prosper, and Imation and Tandberg are developing a new 1.2 terabyte tape technology for launch next year.
DVD storage has huge potential, according to Andrew Wyllie, commercial manager at NEC's business equipment division. "Take-up of DVD writers for storage and archiving is low. It's a big area for expansion," he says.
"We believe users will migrate to DVD/RW from CD/RW as the price difference narrows."
CONTACTS:
3ware www.3ware.com
Adaptec www.adaptec.com
Adic www.adic.com
Anix www.anix.com
Brocade www.brocade.co.uk
DataCore www.datacoresoftware.com
Hammer www.hammerplc.com
HarrierZeuros www.harrierzeuros.co.uk
Ideal www.ideal.co.uk
Imation www.imation.com/uk
Legato www.legato.com
McData www.mcdata.com
NEC www.nec.co.uk
Quantum www.quantum.com
SNIA-E www.snia-europe.org
WStore www.wstore.co.uk
ALSO IN THIS SERIES:
How to Sell: Storage - Part 1 - Space odyssey
How to Sell: Storage - Part 2 - Management issues