Predictions 2003

I love this time of the year. There's still a whole 12 months to look forward to, wonder about and plan for. And even though the holidays are over - a mixed blessing, certainly - there are always the pundits to look forward to. Herewith, the most interesting predictions of the bunch, in my opinion.

This year, most experts are repeating the storage industry's version of "fahgeddaboutit." Except for the most strategic projects - and storage is, even optimistically, only a small fraction of those if it figures at all - IT spending remains flat, or down, from 2002 levels. The projects that are getting done are those that companies simply can't live without - despite an economic slump - and those that will bring some sort of competitive advantage. This of course differs among industries and for specific companies within an industry, and it also depends on how a given firm manages its IT investments.

In general, though, folks are doing more with less, so technologies such as storage area networks (SAN) that can be installed in small increments and storage management packages that are reasonably priced are bound to do better than the all-singing, all-dancing storage systems. People are willing to give up some functionality for a price break.

Arun Taneja, senior analyst at the Enterprise Storage Group, headquartered in Milford, MA, is convinced that this year will bring a lot of consolidation - much as last year did - especially in the intelligent switching, storage resource management and network attached storage (NAS) arenas. He suggests that perhaps McData and/or IBM will need to buy someone, or some technology, to better compete in intelligent switches. In storage resource management (SRM), he suggests, be careful. There are a lot of very small players without a lot of money. As some inevitably go out of business, there may be some orphaned products out there. Choose wisely. Finally, in the NAS virtualization space, IBM, HP, Sun and Dell all need a high-end NAS solution - and some of the startups here will inevitably be acquired.

Jamie Gruener, senior analyst at the Yankee Group, headquartered in Boston, MA takes the consolidation theme even further. Fewer than 60% of the storage management vendors now existing will still be standing by the end of 2003, he suggests, with larger vendors buying the smaller ones. He also predicts that Cisco will grow its share of the Fibre Channel switch market.

There is some brightness on the horizon. EMC, StorageTek and McData, among some others, reported higher than expected preliminary fourth-quarter financial results. EMC, which will report official results on Jan. 23, said that customer demand was unexpectedly strong for its new Clariion CX family of arrays. (And this goes to show that the minicomputer vendors aren't completely dead - in this case, part ofData General lives on.) In 12 months, we'll see how all this panned out, of course. In the meantime, to borrow the ageless words of Bette Davis in 1950's "All About Eve": Fasten your seat belts. It's going to be a bumpy ride.

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