InformationWeek

Vendors are moving to close the gap. Storage, traditionally the second-thought technology and proverbial back-end system, is now edging closer to center stage. As servers become commodity purchases and Web computing demands more powerful means of collecting and aggregating data, "We're moving to storage as a bigger piece of the IT pie," says Shebly Seyrafi, an enterprise hardware financial analyst at A.G. Edwards in St. Louis. According to Dataquest, total storage sales worldwide will overtake total server sales in 2003.

The increased dependence on storage has led to a dramatically growing market. The storage industry grew 25.4% last year, to $13.5 billion, and is expected to grow to $17.4 billion this year, according to Dataquest. It's also led to a highly competitive market, rife with innovation and infighting. Businesses report fierce competition among storage vendors in terms of price, performance, ease of use, and scalability. In particular, the backbiting is fierce between EMC, the market leader with its proprietary Symmetrix line, and IBM, the traditional mainframe storage vendor, which is aggressively marketing its new Enterprise Storage System. IBM chairman Lou Gerstner recently told financial analysts that 75% of all new hardware dollars will be spent on storage. That may explain why ESS, which began shipping in the fourth quarter of last year, was code-named Shark. Based on IBM's scalable RS/6000 architecture, ESS is designed to recapture the market share for external storage that EMC grabbed from IBM over the past decade.

The competition is good news for organizations like Sallie Mae. "There hasn't been real competition in seven years," says Todd Bowling, a consultant with storage systems integrator Solutions-II Inc. As EMC and IBM compete in the high-end storage market with systems that support large volumes of mainframe, Unix, and Windows NT data, Compaq, Dell, Hewlett-Packard, and Sun wage war in the server-based, open systems storage market. Dell acquired ConvergeNet Technologies Inc. last year to make its own play in the storage market.

Storage has evolved over the last 30 years from the spinning tape disks pictured in '70s spy movies to sleek boxes bristling with hard drives and controlled by sophisticated software. It used to be that a storage system simply hung off the back of a mainframe, swapping data in and out of the CPU. Then came client-server technology, and storage systems were attached to servers on networks. The Internet has led to even more dispersed and sophisticated storage systems.

The hard-disk technology at the heart of most enterprise storage systems is dropping in price, down to 1 cent per megabyte for the storage system vendors that buy the disks. However, enterprise storage systems often include controllers that incorporate intelligence; these cost considerably more, making prices to the customer 10 cents to 50 cents per megabyte of storage. And that's not all. Industry estimates put the annual cost of managing all this storage somewhere between two to eight times the purchase price.

Price is important, but there are other deciding factors. Standard Register, the $1.4 billion business form and document-management company in Dayton, Ohio, has nearly 3 terabytes of data stored on EMC Symmetrix systems. Bill Valle, principal architect at Standard Register, is overseeing the migration of Microsoft Exchange data to the Symmetrix systems, which are already connected to Sun Solaris servers. "IBM made a big push in here with Shark--we even took a trip to Austin," where some of IBM Enterprise Storage System's technology is manufactured, Valle says. "IBM offered us huge discounts, but we went ahead with more Symmetrix."

Valle says EMC's support has been very good, and he's a fan of EMC's black-box architecture, which incorporates proprietary intelligent controller software. "Symmetrix means less timing and fewer processes," he says. Valle has concerns about Shark's architecture, which led him to choose EMC. The ESS controller is based on the same motherboard used in RS/6000 servers. Shark will run into the same overhead problems that any server encounters, Valle predicts. "IBM will deal with a higher level of code to make transactions happen and that means there will be more latency built into the process," he says.

EMC, of course, has its own critics. One customer found that Symmetrix performed well as long as it was running at about 50% of capacity. "If you increase the volume to 70% or more for a large-scale database, Symmetrix bogs down with a lot of overhead," says Ron Rainville, director of operations at Lycos Inc. in Waltham, Mass. Instead, Lycos stores 30 terabytes of data on Compaq storage attached to Compaq and Sun servers. Rainville admits that EMC outperformed Compaq by about 8% at half-capacity. "But it cost 30% more," he says.

Cost was also a factor for John Brighton, CIO at insurer Aetna Inc. in Hartford, Conn., especially when he installed 23 terabytes of IBM's ESS storage in April. "EMC was dominant with us three years ago but they lost it," Brighton says. First Hitachi Data Systems, then IBM, got much more aggressive with their pricing. According to Brighton, EMC continues to have better technology, "but they continually price themselves 20% to 30% higher than the other guys--and they lost the deal."

Bruce Kornfeld, director of marketing for Dell's PowerVault storage, says the most expensive part of a 100-terabyte system is still the hard drive, and Dell procures enough of them to keep storage prices in line. Dell, he says, delivers complete storage area networks in the $100,000 range. "We have the systems architected so you can order terabytes of disk over the Internet," Kornfeld says. "We fit storage into the same Dell Velocity model that our computers are under, and that helps us keep the costs in line."

Sallie Mae's Mowery and others are looking beyond the high-profile vendors for advanced storage technology. For example, the Xiotech storage system division of Seagate Technology Inc. brought technical innovation to the table that gives Mowery the performance boost he's looking for. "They use an information bus approach that lets us move an application from development to testing to customer delivery without engineers touching it or moving any hardware around," Mowery says.

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