According to industry prognosticators, the enterprise IT market is picking up steam. A number of analysts have raised their expectations for some storage vendors and market segments in the next six months. Despite the rosy outlook, some IT administrators may face tough questions when expanding their storage infrastructure.
Concurrence among analysts is rare; each company has its own view into the market and its own method for judging success. Some, like Goldman Sachs Group, were pessimistic earlier in the year; their surveys predicted a drop in IT spending. So its only natural that followers of the stock market would pay close attention when Goldman Sachs mid-summer survey showed improvement and when its analysts last week plugged hardware companies such as hard drive manufacturer Seagate Technology.
Last week Infonetics Research appeared to offer a similar upbeat message for the Fibre Channel SAN market with its SAN Interconnection Hardware report and a press release titled FibreChannel SAN Market Fired Up: Cisco Set to Take a Bite Out of McDatas Happy Meal, but Brocade Still Tops the Food Chain. It predicted that Fibre Channel SAN revenue will grow at a rate of 31 percent over the next 12 months and that the total market will reach $1.6 billion annual sales by 2005.
Sounds great, right? However, according to a story by Byte and Switch, thats half the growth the research firm predicted six months ago. The analyst who wrote both reports said that top-tier enterprises were cutting back on new deployments and seeking to leverage their existing infrastructure. Most growth will be seen in mid-size enterprises, he was reported as saying.
The inference we can make is that large enterprises are taking advantage of the downturn to consolidate storage resources and make sense of the overcapacity theyd purchased during the Internet-bubble years. (For more information, see "The Storage Network Conundrum." )
But will storage vendors find such quick success selling SAN to these new mid-tier enterprise customers? Perhaps so, and perhaps not.
Surely all enterprise organizations have been making a similar examination of storage resources and performance bottlenecks. Both large and mid-size enterprises stocked up on storage when budgets were better. Since then, theyve been getting by on what they have.
According to an Imago Communications survey of storage practices in large and mid-sized U.K. enterprises late last year, 47 percent of responders said they were using less than half of their storage capacity; only 19 percent were really in the effective utilization range, and those were the larger companies. For most of these companies, half of their 2002 storage budget was spent on hardware and 20 percent on software; 15 percent went for storage management.
However, a change for the better in the business picture and its resulting demand on corporate resources could tax the capabilities of some IT outfits in mid-tier enterprise sites. That was certainly the analysis offered in a recent discussion with storage software executive Mark Silverman, CEO and president of Bocada. (For more information, see "An Appliance Approach to Backup Reporting.")
Silverman said many enterprises have underfunded their key storage infrastructure for several years. The organizations have avoided trouble with this strategy mainly because their businesses havent yet taken off. However, now that were seeing signs of a recovery, IT managers may be caught flat-footed when demand for resources surfaces.
"This isnt technology that can you can implement overnight," Silverman said. The process of developing requirements, evaluating products and implementing the chosen solution will take six months or longer. "Companies will have to rebuild the infrastructure over again, rebuild the systems and the people to support it."
On one hand, theres a silver lining to this wait-and-see, make-do-with-less strategy: Customers may gain a product cycle on the product they wish to purchase. For the same budget, they will gain better performance, or more capacity, or other advantages.
On the other hand, as Silverman observes, infrastructure is more than hardware. Personnel, training and support costs must be counted when considering the entire implementation.
I note that one of the workshops at this weeks Storage Decisions 2003 conference in Chicago covers the building of requirement-for-procurement (RFP) documentation for storage area networks and tape libraries. A very practical course, without a doubt. But when sitting down to create that RFP, managers must figure plenty of education costs into their plans.
Storage Center Editor David Morgenstern is a longtime reporter of the storage industry as well as a veteran of the dotcom boom in the storage-rich fields of professional content creation and digital video.
More from David Morgenstern: