NAS Market Poised For Dramatic Growth
Analysts and vendors alike share optimism for fledgling NAS (network attached storage) market.
Welcome to the first exclusively mass storage issue of Business Solutions magazine. This bonus edition contains articles on SANs (storage area networks), NAS (network attached storage), Fibre Channel, RAID (redundant array of independent disks), and tape technologies. We hope this issue serves as an excellent resource for VARs and integrators as they pursue storage opportunities in the year 2000 and beyond.
There are scads of opportunities. During the past few years, the world of storage has collided with the world of networking, and VARs and integrators have been reaping the benefits. The Internet is an expanding data pipeline, gushing forth gigabytes of information into the smallest of businesses. And storage technologies have been keeping pace, particularly in the areas of SAN and NAS.
Speaking Of NAS…
Have you seen the latest numbers for network attached storage? Pu Xiang, an analyst at research firm Dataquest (Stamford, CT), is forecasting the total NAS market to increase from 109,000 units sold in 1999 to 1 million units sold in 2003. That's a growth rate of 900% in three years. This unit growth will be matched by an increase in revenue from $781 million in 1999 to $6.7 billion by 2003. That's a growth rate of 857% in three years. These numbers are good news for VARs who are poised to move a lot of NAS devices through the channel.
Despite this optimism, it's important to note that, although NAS appliances have been shipping for some time, the market is still in its infancy. For example, NAS vendors are still in the process of developing the NAS space and defining the differences between NAS and SAN. These factors make it clear that, despite the excitement, NAS is still a baby with a lot of growing to do. But there's lots of good news. Here are a few of my predictions for the NAS space:
The shift from centralized to networked storage — It's clear that the traditional storage paradigm will continue to shift from centralized storage to networked storage. The days of accessing data through a central server or mainframe are numbered as storage solutions are deployed throughout the network. This trend will continue and will — by itself — sell a lot of NAS devices.
The impending convergence of SAN and NAS — The prevailing attitude in both the SAN and NAS camps is that SAN and NAS will eventually converge. The questions are how and when. Many people in the industry continue to express the belief that the Storage Networking Industry Association (SNIA) can play a key role in this convergence, and I agree. However, the industry needs to eliminate confusion through education before it begins to focus too much on the convergence of NAS and SAN.
Specialization — Not long ago, Merrill Lynch issued the following statement: "[Storage] appliances are a break in industry evolution in that they are specialized, rather than general-purpose. The age of the specialist is here…." I agree with Merrill Lynch; we definitely live in an age of specialization. In the storage industry, we have found that network bottlenecks too frequently occur with general-purpose servers. The mission of NAS and SAN vendors, therefore, is to eliminate those bottlenecks through the use of NAS appliances.
Specialized appliances will enable general-purpose servers to function more efficiently. This trend is a logical progression of the storage industry's desire to provide custom solutions, rather than moving forward with a "one-size-fits-all" mentality. Look for specialization to continue, and be ready to mold your strategies around this trend.
Eliminating the confusion around SAN and NAS — This confusion is clearly outlined by Marc Farley in his book, Building Storage Networks. Farley's recommendation is to avoid the terms "SAN" and "NAS" because they are ambiguous. This is especially true when speaking with end users. Instead, Farley argues that vendors should speak with partners and end users in more specific terms. Therefore, instead of asking, "Which technology is better, NAS or SAN?" VARs need to ask, "What combination of technologies best solves a user's problems?"
And although I realize that communicating more specifically takes more work, I also believe that communicating more specifically will clear up a lot of the confusion in the market. In my conversations with IT managers, I have found that the terms "NAS" and "SAN" create instant confusion. At the same time, when I tell my IT friends that they can buy a black box, plug it into an Ethernet port, and turn it on for instant storage, they understand immediately. After the installation is complete, you can go ahead and tell them, "By the way, that's a NAS appliance."
The shift from storage scarcity to storage abundance — Robert Gray, research director for storage systems at IDC (Framingham, MA), claims that the mentality of today's storage customers is changing. "Not long ago, the typical user worked to conserve storage resources," he said. "That's because storage was so expensive." But all that has changed. The new mentality is to exploit, not conserve. "Why should users worry about conserving storage when they can just buy more storage?" he asked. "The price per GB continues to drop by 40% on an annual basis. The forecasted installed capacity for 2003 is nearly 300 times the capacity installed for 1993. And typical servers have grown from a few gigabytes to a few terabytes."
This shift in attitude represents an incredible opportunity for VARs selling NAS products. The Internet is pouring information into businesses of all sizes. All of this information needs to be stored and managed. E-mail is a good example. More and more companies (as well as government agencies at all levels) are adopting policies for storing and managing company e-mail. NAS appliances can provide an instant solution for e-mail management problems. And, with low-end appliances starting under $1,000, the solutions are not cost-prohibitive.
Time scarcity for network administrators — One of the factors driving the NAS market is the issue of time scarcity. Not only are IT managers pressed for time, additional staff is either unavailable (due to a lack of qualified people) or cost-prohibitive. Therefore, the effective management of stored information is critical. That's where VARs enter the picture.
VARs can use their expertise to offset the lack of qualified IT professionals in the industry. By understanding NAS boxes, VARs can offer instant storage as a cost-effective solution.
Storage: a great business — Everybody wants to move into storage. According to IDC's Gray, revenue from disk storage systems is expected to grow to $46.4 billion by the end of 2003. Yes, that's $46 billion. Not too shabby. The storage industry is certainly eager to take advantage of the increasing demand for storage. And NAS technology is going to lead the way. NAS appliances are relatively inexpensive, and they work today. Those two factors are going to push NAS into the foreground of the storage stage as the year 2000 continues. More people are going to purchase NAS solutions than SAN solutions — at least early on. In fact, many customers will become initiated to network storage through NAS devices. Therefore, VARs need to educate themselves on NAS, and then they need to carry that education to end users. Once that education is accomplished, we can begin to worry about other issues, like the convergence of NAS and SAN.
And finally, don't worry about slinging the terms "NAS" and "SAN" in order to look cool. In the long run, your customers will be more impressed by the solution you provide rather than your ability to hurl jargon at them.