Anders Lofgren
Network-attached storage (NAS) devices have to continue to evolve
technologically in terms of scalability, performance, availability and
manageability. NAS was developed to address an underserved market – the
departmental, workgroup segment with users who have collaborative computing
needs (sharing files) and, more importantly, ease of management to serve the
non-technical nature of its initial target customer. Instead of buying a file
server, customers could buy a NAS product customized for file sharing. NAS has
now begun to move up the value chain and is moving into the high-end space – a
territory now being targeted by the startups. However, it is a crowded market
with many vendors potentially (some of the companies have yet to deliver a
product) competing for IT budget dollars from an increasingly conservative
customer. The barriers will be too great for many of these startups since it is
difficult to determine their competitive advantage over current solutions.
There is clearly a market opportunity for emerging NAS technologies since
both NAS and storage area network (SAN) (as well as direct attached storage,
DAS) have a place in the enterprise. Future NAS technologies need to address the
following areas:
- Scalability: NAS devices need to scale beyond current capacity levels.
- Manageability: NAS is positioned as inexpensive and easy to manage. This
is the case with a single NAS but not necessarily the case with multiple
devices. With more devices, the management advantage becomes less apparent. - Performance: NAS needs to address performance issues with database
applications running on file systems. - Future storage needs: Future storage needs will be addressed both by block
and file-based storage. File-based storage has several advantages that will
drive the need for either NAS or some kind of global file system.
Despite the clear market opportunity, there are significant barriers that may
limit the chances of success:
- NetApp and EMC control the current NAS market: These two vendors continue
to be very popular solutions for customers looking for the benefits of SANs
but without the complexity and cost. - Increasingly, these are the solutions being adopted by customers with
high-end needs. - Microsoft’s increasing influence: Microsoft has positioned itself in the
NAS market with the availability of its SAK (server appliance kit). This
embedded OS has currently positioned MS as a player in the low-end to
midrange market, but the company is undoubtedly setting its sights higher
for the future. - Too many startups: This is an increasingly crowded marketplace with a
number of startups vying for customers’ attention. Market consolidation
will occur as funding, time to market and, more importantly, time to revenue
become issues. The market cannot sustain the current number of startups. - Software NAS: Software NAS implementations are gaining some traction as an
alternative to the HW/SW combination. The separation of the HW and SW does
run counter to one of NAS’ primary advantages – the complete, all-in-one
solution. However, SW NAS does give users the flexibility in terms of their
disk components and allows re-use of SAN capacity. - SAN integration: Many of the emerging startups are focusing simply on NAS.
Few appear to be addressing a critical issue for customers: how to integrate
NAS and SAN into an overall storage infrastructure. This is especially
important for those customers who have already made significant investments
in SAN. From a resource perspective, the larger, established vendors are
much better positioned to address this need for customers. - Distribution channels: Many of the existing storage and server vendors are
already selling NAS products, so few of them have needs to partner with the
startups. Sun would be the only major company today that does not have a NAS
solution, but within nine months, it will have addressed this area. Selling
direct will be very difficult, and if the midrange market is to be targeted,
the VARs and SIs will be the best channel. The company that establishes the
OEM partnerships will have the highest chance for success. - Market conditions: The economic conditions are not amenable to new
startups since IT budgets are already stretched thin and many organizations
are in a maintenance mode rather than expansion into new product areas and
technologies. - Target customer: Many of these startups are targeting high-end markets
when the market opportunity may be greater in the midrange. In the midrange
market, SANs have made few inroads, budgets are smaller (negating the
potential for FC SANs in many cases), and ease of management is critical
based on the expertise level of the IT staff. It is a perfect market for NAS
and largely a market whose needs are being met primarily by NetApp. In other
words, there is some room for competitive products. - Software support: Most, if not all, of these devices are not supported
under many of the major storage management software packages. This results
in two problems: (1) integration into current storage management
infrastructure will be difficult and (2) it creates a vendor lock-in
situation since both hardware and software will need to be purchased from
the same vendor. Given the current state of the storage industry, the latter
issue is not too dissimilar from current storage hardware products. However,
it is important for end users to consider the products in the context of an
overall storage architecture rather than as a point solution.
It would be unfair to say that these challenges are insurmountable, but it
does demonstrate that only one or two of the startups will make it through the
next 24 months. Especially if economic prospects do not improve and IT budgets
remain constrained. As far as market leaders, it would be difficult to prove any
kind of leadership position. There are many small companies with little or no
revenue, unknown financial status, uncertain economic conditions,
time-to-revenue concerns, etc. For example, Cereva Networks, developer of a
highly scalable storage system with value-add software functions, recently
ceased operations. The company was not in the NAS market but in the related
storage system market. With almost $200 million in funding from established VCs,
it is indicative of some of the problems even the best funded startups face. For
end users, these companies bear watching, but implementations are full of risks.
In other words, it is a wait-and see situation. However, there is minimal risk
in prototyping products in test labs, but the big question, beyond the obvious
questions of business viability, will be how these new products will integrate
into the existing architecture, since wholesale replacements are unlikely. In
other words, unless the benefits of these new products are so compelling that a
major architectural change needs to occur, these companies need to address how
they seamlessly fit into the existing storage infrastructure.