SAN spending outpaces NAS 3:1

Posted on December 09, 2005

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By Dave Simpson

—A survey of 100 Fortune 1000 CIOs in the US, conducted by Citigroup, reveals a number of surprising results. For example, spending on SAN storage is expected to outpace NAS spending by a 3:1 margin over the next year—and that's excluding switches and host bus adapters (HBAs). Only 15% of the CIOs surveyed expect to increase their NAS budgets next year, versus nearly triple that amount (43%) predicting an increase in SAN storage spending.

When spending on SAN switches and HBAs is factored in, the SAN market appears to be very healthy. For example, 35% of the respondents in Citigroup's Q4 2005 (October) survey plan to increase SAN spending in 2006, vs. only 7% in Citigroup's Q3 (July) 2005 survey. And none of the respondents in the Q4 survey expect a decline in spending on SANs.

Another mild surprise showed up with respect to CIOs' plans for spending on tape drives/libraries. For example, 21% expect budget increases (vs. 19% in the Q3 survey), while only 14% anticipate their tape spending budgets to decrease. The other 64% expect tape spending to remain about the same.

In Citigroup's Q3 survey, 43% of the CIOs placed a high priority on tape replacement, while only 18% cited tape replacement as a high priority in the Q4 survey.

However, Citigroup analyst Paul Mansky concludes: "While over the near term this suggests a slightly more positive outlook for the tape market, our longer-term thesis suggesting erosion of the market at the hands of new low-cost disk storage [e.g., Serial ATA drives] is unchanged."

As for other storage project priorities, interest in security appears to be on a sharp decline. For example, in Citigroup's Q3 survey, 38% and 10% ranked security as a high and low priority, respectively. In contrast, in the Q4 survey only 20% of the CIOs ranked security as a high priority and 29% ranked it as a low priority.

In terms of storage project priorities, consolidation, compliance, and disaster recovery continue to top the charts.

Virtualization lags
In accordance with other end-user surveys, the Citigroup survey shows that the storage virtualization market is still in the nascent stage. More than half (59%) of the CIOs have not deployed and are not evaluating virtualization. That compares to 63% in the previous survey. In terms of mind share in the virtualization market, CIOs cited EMC, IBM, and Hitachi Data Systems (and its resellers Hewlett-Packard and Sun) as the market leaders.

Citigroup analysts remain skeptical about the adoption of virtualization for three reasons, all of which were confirmed by the CIO survey:

  • Considerable technical hurdles to achieving full feature portability;
  • Disparity among software offerings from different vendors; and
  • Difficulties in and/or resistance to transitioning away from established maintenance contracts.

And so does iSCSI
Citigroup analysts note that iSCSI is poised to gain a foothold among small to medium-sized businesses (SMBs), although not among large enterprises. In the Q3 survey, which polled companies of various sizes, about half (51%) of the respondents had no plans to deploy iSCSI within the next 12 to 18 months, and smaller companies (less than $5 billion) were much more likely to adopt iSCSI.

In the Q4 Fortune 1000 survey, only one of the 100 respondents had deployed iSCSI; three planned to deploy it in 2006; and only 19 said that iSCSI was currently under evaluation. The remaining 77% either had no plans to implement iSCSI or were undecided.

SATA/SAS vs. FC
One further surprise in the Citigroup survey was the apparent staying power of Fibre Channel in light of competition from newer interfaces such as Serial ATA (SATA) and the upcoming Serial Attached SCSI (SAS).

For example, when asked which disk drive interface is primarily being used today for new capacity additions, 64% of the CIOs cited Fibre Channel, while 14% said parallel SCSI, and only 9% cited SATA or SAS. When asked what their primary drive interface will be one year from now, Fibre Channel actually picked up share—to 66% of the respondents—while SCSI slipped to 9% and SATA/SAS stayed flat at 9%. (The remainder of the respondents checked "don't know.")


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