Storage software and management services, not hardware, will bring in the money in the sector over the next five years, according to analyst firm Gartner.
Speaking at the Gartner Symposium 2003 in Sydney last week, Gartner research director for storage and servers, Phil Sargeant, said the decline in revenue brought about by the drop in storage hardware product pricing year-on-year is forcing vendors to find alternative ways of increasing their revenue streams from storage.
“Storage pricing is declining year-on-year, and has eroded 40 to 45 per cent over the last three to four years,” he said. “I don’t see that changing over the next four to five years.”
Yet despite ongoing price cuts across storage hardware, Sargeant said the cost of investing in storage for both small and large sized companies will continue to rise.
“The question is: will you pay less for storage infrastructure? No. Hardware is but one element. Software and services are going up,” he said.
Sargeant said storage solutions would become more complex over the next five years as storage area management solutions, such as SANs, mature. As a result, organisations will need to implement automated mechanisms to cope with increasing capacity and more complex storage infrastructure.
“Users are crying out for end-to-end storage area management. Suites for end-to-end storage are few and far between,” he said.
While there are some “very good point products” now available, users should be aware that these might not be the best solution for their storage area management in the future, Sargeant said.
“It is important for organisations to create a storage management mentality…. Look at [storage] from a tactical perspective. Be aware you may want to consider replacing products in a few years’ time,” he said.
“If you’re putting in storage solutions which take more than six months, cut it back, and consider a smaller solution. The market will have changed before then,” he said.
Likewise, Sargeant warned organisations not to “throw hardware” at pending storage problems, adding that coordinating more and more individual storage boxes could become harder to manage than a combined infrastructure solution.
He also advised enterprises to avoid buying additional hardware in expectation of future storage demand, as prices will keep going down.
Focusing on the changing landscape of storage over the next five years, Sargeant also discussed the future of various storage hardware technologies, remarking that innovation in the storage market was now in the domain of storage software vendors, rather than storage hardware providers.
Fabric attached storage, such as that promoted by Cisco’s line of storage switches and other network-attached storage (NAS) applications, will become the more common model of storage management over the next three to four years, he said. The adoption of this type of storage infrastructure will be helped by the introduction of iSCSI as a mainstream storage technology over the next 24 months.
Tape will also continue to play a role in the storage space, but will increasingly become allocated as a secondary back-up technology, rather than a primary back-up medium, he said.
“The major emphasis from [tape] vendors is to be on recovery, not on back-up,” Sargeant said.
The proliferation of serial ATA (SATA)-based drives, which will offer “bulk storage at an economic price”, will also have an impact on tape’s dominance within three to four years’ time, he said.
Despite the growing use of optical drives within the small to medium business space, Sargeant said disk will continue to be the predominant storage technology over the next decade, with individual disk capacity for the enterprise increasing to over one terabyte in size.
The storage market was worth around $4.7 billion in 2002. Sargeant said the market segment is expected to be worth about $7 billion in 2007.
More players are entering the mid-range market sector, he said, particularly in the Asia-Pacific region, and predicted more revenue would be obtained from mid-range storage solutions than on high-end storage in 2004.