It used to be the runt of the high-tech litter, shoved to the back of the pack by bigger, more glamorous, and better-heeled siblings.

But storage is nosing itself to the forefront. At a time when many technology sectors suffer from financial downturns and investment jitters, storage providers are making their move.

In fact, by the end of 2003, the value of storing escalating amounts of data is likely to soar past the $8 billion mark in annual revenue, analysts estimate.

There's little mystery why so much corporate attention is now spent on storing information - staggering amounts of new data are opening up grand vistas to companies like IBM Corp. (stock: IBM), Hewlett-Packard Co. (stock: HWP), and, of course, the industry leader, EMC Corp. (stock: EMC).

And the storage business is moving to keep pace, analysts said. It's growing at a minimum of 25 percent in the mainframe space, and up to 100 percent in the open systems area, said Ed Broderick, an analyst at the Robert Frances Group, Poughkeepsie, NY.

"The competition is a dogfight," Broderick said, noting that IBM, Storagetek, Sun Microsystems Inc. (stock: SUNW), and HP are also furiously chasing EMC for a slice of the expanding market.

Storage services are getting cheaper, decreasing in price per megabyte by 20 to 30 percent, said Ernest Parsons, president and CEO of Articulent Inc., Hopkinton, Mass. At the same time, the task of managing data is getting more complex.

As price per megabyte of storage decreases, technology manufactures will pay closer attention to storage management software, Parsons said.

One challenge storage vendors face is providing adequate management and automation, said Carl Greiner, analyst at Meta Group, Stamford, Conn. In addition, he said there will be more interoperability among the equipment of storage vendors.

Michael Harrison, director for storage alliances at IBM, points to two broad trends that will guide storage service in the year ahead. The first, he said, is corporate mergers. The second will be consolidation within companies.

Jack C. Scott, an analyst at the Evaluator Group, Denver, said the market for NAS and SAN solutions will expand while production of direct-attached storage will decrease. Scott said he expects EMC to introduce more NAS products and add to its Symmetrix enterprise storage product line.

Some said next year will be marked by the introduction of two significant new technologies. William Hurley, an analyst at The Yankee Group, Boston, said IP-based routers and gateways will become fixtures in the storage world.

"These elements will initially bridge SAN islands, but will quickly be found in the body of switch/router blades for a more close integration between storage and data networks," Hurley said.

Hurley said the second technology to emerge will be carrier-scale storage solutions, designed from the ground up with the specific carrier and service provider requirements in mind.

Digital information that customers have accumulated has really pushed how information storage requirements are growing, said Ruya Atac, director of enterprise marketing at StorageNetworks, Waltham, Mass., a company that outsources data storage services. Storage is becoming the overall IT budget at companies, she added.

"Companies will increasingly look toward storage service providers to handle their storage issues," Atac said.

Cost of managing and maintaining storage equipment costs four to ten times the original equipment cost, observers said. EMC will focus in part on developing a single solution for NAS and SAN requirements. Douglas Fierro, director of enterprise storage network for the Hopkinton, Mass., company.

"The industry will be faced with the challenge of creating hardware and software that support new applications regardless of the server," Fierro said.

Related Stories:

EMC Takes Chameleon To Mid-Range NAS Market

Sun Expanding Its Influence In Storage Market

IBM, EMC In Storage Dogfight

Downtime Stresses Need For Site Monitoring Beware Of Happy New Year Virus Storage Moving To Front Of Tech Pack College Student Pleads Guilty In 'Net Fraud Utility.Com Ponders Options

		Print this story
		Send as e-mail

		What would you pay to stay on top of the IT Industry? How about nothing?
			Daily Update
		Text			HTML
		More Newsletters

		Define an IT Term

Technology Webcasters Will Reap Gains From New Rule

What's Ahead For Solution Providers?

Embarcadero Technologies Update