EMC Extends Lead In Storage Management

The need for data storage is growing by 50% a year at many companies. Yet, the utilization rate of most enterprise storage systems ranges between 15% and 20%. With IT budgets still tight, business-technology managers are looking to satisfy the need for more storage by making better use of the systems they already own. The answer: better storage resource-management software.

The growing demand for more-sophisticated storage-management software is fueling moves by vendors to expand and improve their software offerings. Market leader EMC Corp. last week disclosed plans to acquire Legato Systems Inc. in a stock swap valued at $1.3 billion. A week earlier, EMC bought a storage-management product from BMC Software. And in the past year, EMC bought storage resource-management specialist Astrum Software and storage network-management company Prisa Networks.

The deals should help EMC maintain its lead in a large and growing market (see chart). Worldwide sales of storage-management software were $4.9 billion last year and will jump to $9.1 billion in 2006, according to the Yankee Group.

EMC's competitors aren't sitting still. IBM's Tivoli division has added advanced features for managing storage area networks to its software suite, which includes backup-and-recovery, error-detection, fault-isolation, and resource-management capabilities. Hewlett- Packard, which became a major storage hardware vendor with its Compaq acquisition, is developing a network architecture that ties storage to its overall utility-computing strategy. HP last week said it will work with vendors such as BMC, CreekPath Systems, and Veritas Software to develop systems that comply with the Storage Management Interface Specification, a new standard that's expected to be ratified later this year. Veritas is expanding its management software to provide high availability and performance management for a wider range of software, including applications. And little-known LXI Corp. released a suite of storage-management apps for IBM's iSeries computers.

The long-term goal is to provide automated life-cycle management of data. That requires sophisticated software to track and manage data as it moves from one storage system to another. Such capabilities are becoming more important as businesses expand their storage networks to share data with employees around the world. But vendors must enhance their software and fill out their product lines to make it all work.

Storage-management software already is helping organizations such as the University of Pittsburgh's Medical Center Health System, which has 70 terabytes of storage and several storage area networks. Its IT budget and capital expenditures have been cut two years in a row. "We're forced to manage the storage more efficiently and share it across the organization," says Paul Sikova, director of operations.

So the medical center is consolidating its storage networks. It's using storage-management tools from HP, IBM, and IBM's Tivoli division. "Staff reductions have forced units to combine resources so they count more on central resources," Sikova says. Joe Furmanski, the project's technical director, is beginning to deploy HP's Storage Builder to help manage storage capacity. "Software allows one person to do a lot more with the storage," he says. "Software saves time for our people."

New regulations that require companies to keep more business records for longer periods of time and produce them quickly when requested by authorities also are placing greater demands on storage systems. In addition, more companies want to improve their business continuity and backup-and-recovery processes, which can be done only if storage is managed efficiently. Rogers Medical Intelligence Solutions, which maintains databases of medical information for the pharmaceutical industry, uses two types of EMC storage systems, one to provide quick access to 500 Gbytes of data and another for longer term storage of 5 terabytes of data. Robert Terdeman, senior VP and chief technology officer, says storage-management software is crucial "because we're in the information business, not the data-processing business. We view storage as a utility." His goal is to reduce by as much as possible the amount of time and money spent on storage, and he uses EMC's Control Center to manage it. "In the long run, it's the cheapest storage because I have nobody dedicated to it," he says. "It manages itself, tells me when something is broken, and sends alerts to EMC for the fix."

While Rogers has already made progress, Terdeman says managing data and storage needs to be even more automated. "The industry is finally getting the real issue. Data life-cycle management is essential," he says. Many companies have data stored on old tapes that can no longer be read. "Life-cycle management is automatic protection against storage obsolescence, and that's what we want."

EMC is still the market leader in storage hardware and software. The acquisition of Legato, with its 30,000 customers and a sales force experienced in selling storage-management software, should strengthen its position. But it's facing a tough new competitor in HP, which has combined storage hardware and software products from Compaq with HP's management software and IT services organization to become a formidable full-service storage vendor.

Kathy Walker, senior VP of network services at telecommunications service provider Sprint, says HP is working closely with her to solve storage problems. "We've had continuous access to HP, and it's not always attached to a sale," she says. Sprint has a mix of storage systems from EMC, Hitachi Data Systems, HP, IBM, and Sun Microsystems, but Walker looks to HP for high-end, high-availability software and services. One project involving call and fraud detection has been in the works for five or six years. "HP takes a collaborative approach with our software architects," she says. "That's not readily available for all our vendor relationships."

EMC's software acquisitions should also help it compete more effectively against IBM. The vendors have battled for years in the storage hardware market. But until recently, EMC, which specialized in high-end storage systems, didn't have the full range of management products to match those offered by IBM's Tivoli division.

That leaves Veritas, another leading storage-management software vendor, as the only major competitor without its own hardware. Company officials say they plan to stay independent and count on their ability to react faster and execute better to retain and win new business.

Vendors are expanding their software portfolios in reaction to customer demands, says John McArthur, an analyst at IDC. "Customers want a more complete solution, and software is a big part of that," he says. With storage hardware prices continuing to fall, the shift to software can help the vendors, too. "The margins are better with software. Hardware has become a commodity," he says.

Even so, if 80% of most storage systems aren't being utilized, it's a commodity that isn't being used effectively. That's why business-technology managers hope new and improved storage-management software will help them solve business problems, make it easier to share information throughout an organization, cut costs and support staff, and make better use of storage systems already in place.