In many ways, small to medium-sized businesses (SMBs) have the same storage requirements as larger enterprises.
By Sanjeev Aggarwal and Sal Capizzi
Enabling IT organizations to manage their storage is the key to not only containing costs, but also to verifying that mission-critical systems run smoothly. In today’s complex business world, data is clearly the most critical asset. Effectively and efficiently managing this growing asset challenges organizations as they juggle exponentially increasing data storage capacities, shrinking IT staff, stagnant budgets, and rising management costs.
From a customer-demand perspective, the fundamental forces driving the growth of the data storage market remain strong. Businesses continue to create and accumulate massive amounts of digitized media that require storage capacity as well as access and manipulation. Other factors include increasing e-business and Web activity; growing requirements for e-mail, collaborative computing, data warehousing, and video/IPTV; an increased focus on compliance; and heightened interest in security and disaster recovery.
On the technology side, users are benefiting from numerous developments and enhancements, including expanded capacity drives at lower price points via Serial ATA (SATA) and Serial Attached SCSI (SAS) drives; storage virtualization; industry-standard initiatives such as the Storage Management Initiative Specification (SMI-S); IP SANs based on the iSCSI protocol; and new disk-to-disk backup/recovery and virtual tape library (VTL) solutions.
All these create tremendous opportunity but also significant complexity and confusion. Although large enterprises typically have the staff and financial resources to manage this complexity, this is not the case for SMBs. To be successful in the SMB market, both customers and vendors must focus on total solutions, ease of use, and TCO of the solutions over a period of two to three years.
Earlier this year, Yankee Group conducted the 2006 Small & Medium Business Storage Survey, an extensive survey of the US SMB and mid-market to examine the challenges and requirements of, and preferences for, the adoption of data storage systems and storage management software. The survey polled 474 respondents from SMBs and mid-market enterprises with 10 to 999 employees.
Yankee Group divided the data and analyses into five segments: very small (10 to 99 employees), small (100 to 249 employees), medium (250 to 499 employees), mid-market (500 to 999 employees), and for comparison, 53 enterprise businesses (>1,000 employees). The results show key differences among these segments, as well as their problems and preferences for sales channels and solution providers.
In 2005, SMB and mid-market storage spending was $13.5 billion-almost as big as the enterprise storage market, but with a much higher growth rate. US SMBs went on a storage spree, spending $7.1 billion on storage hardware, $2.8 billion on storage management software and $3.6 billion on storage services-a total of about $13.5 billion, with an overall 2006 growth forecast of 14% (see figure). The potential SMB market for the rest of the world is equally large.
The main trends driving storage spending today and in the future are the following: increased concern about data security (viruses, disgruntled employees, etc.); growing interest in backup and disaster-recovery (DR) solutions; widespread use of networks and enterprise-class applications; exponential increases in e-mail, short-messaging service (SMS), and the size of attached files (e.g., digital photos and videos); and regulatory compliance prompts companies to keep more information for a much longer period of time.
In addition, Yankee Group’s 2006 Small & Medium Business Storage Survey found that spending on storage systems, storage software, and storage services has increased in all segments of SMBs and mid-market enterprises (see figure, below). Yankee Group forecasts robust growth for all market segments for storage systems, software, and services-with the highest growth expected in the very small (18.7%) and mid-market (16.6%) segments.
The key trends driving increased interest and spending on storage are the following:
■ Interest in backup and disaster-recovery solutions followed 9/11, increasing further after last year’s Hurricane Katrina disaster. Many SMBs went out of business because they lost all their business information-even their backup data;
■ The downward pricing trend for both storage hardware and software means SMBs can purchase networked storage that rivals enterprise storage for $10,000 or less; and
■ As with enterprise-class environments, SMBs face similar challenges relative to growing data size and storage capacity.
Trends in storage networking
About 45% of SMBs with 10 to 499 employees and 35% of mid-market enterprises with 500 to 999 employees have not deployed network storage (see figure, above). The main reasons are cost, complexity, lack of IT resources that understand network storage, and the fact that there simply isn’t a need because of increases in internal server storage capacities with SATA disks.
However, as requirements for data availability and disaster recovery increase-coupled with the decrease in costs and an increase in the availability of complete storage solutions-the adoption of network storage will increase.
In 2005, direct-attached storage (DAS), network-attached storage (NAS), and network-attached tape systems led storage system deployment (see figure, right). Use of DAS remains high; more than 60% of all respondents have deployed DAS systems. More than 42% of the SMB customers have deployed NAS systems due to cost and their capability to attach to standard IP networks.
The deployment of network-attached tape systems is also increasing, indicating backup is becoming a centralized function. Also, deployment of disk-based data retention systems is increasing to support regulatory compliance requirements and to provide a nearline backup alternative to tape.
Fewer than 10% of companies with <250 employees have deployed Fibre Channel SANs. However, this figure increases to 25% in mid-market enterprises that have larger budgets and storage-specialized IT resources. This is not surprising because the cost and complexity of implementing a Fibre Channel SAN are significant, especially for smaller organizations with limited resources.
According to Yankee Group’s 2006 Small & Medium Business Storage Survey, there is strong interest in 2006 in deploying IP SANs, NAS, disk-based data retention systems, and virtual tape systems (see figure, right).
IP networks offer cost benefits because Ethernet is significantly less expensive than Fibre Channel. IP SANs based on the iSCSI protocol also address interoperability and network management issues-both crucial for enterprises of all sizes. In addition, unlike IP, Fibre Channel cannot be as easily transported over a WAN.
Therefore, it’s not surprising that many mid-market organizations-other than SMBs-plan to adopt IP SANs in 2006. IP SANs facilitate both storage consolidation and provisioning. Because many organizations are already familiar with IP and Ethernet, the adoption of iSCSI is a natural evolution for SMBs and larger enterprises alike.
Recent product offerings from several vendors reflect the demand for iSCSI. For example, most of EMC’s Clariion models (which are also available from Dell) are available with iSCSI. The alliance between IBM and Network Appliance has further heightened interest in iSCSI. And a wide variety of smaller vendors also offer iSCSI disk arrays.
NAS offers a cost-effective file-level storage alternative for firms ready to move to shared, networked storage. We anticipate that companies with <250 employees will continue to show strong interest in NAS.
With solutions available from companies such as Network Appliance and EMC, as well as vendors that sell NAS servers based on Microsoft’s Windows Storage Server, SMBs can take advantage of a variety of NAS options.
Disk-based data retention
In 2005, disk-based backup/recovery adoption picked up steam. Although tape continues to be the primary medium for long-term archiving, companies increasingly backed up to disk. This resulted in large part from ever-shrinking backup windows. In addition, critical applications cannot be subject to downtime for hours on end while a backup application writes to tape. As rapid retrieval becomes more important, disk-based backup/recovery has become particularly popular among SMBs. Also, lower-cost, higher-capacity SATA drives are spurring interest in virtual tape libraries (VTLs) and disk-based backup. Although tape continues to be less expensive, falling disk prices have brought the industry to the tipping point, making disk a viable backup option.
VTLs-which work with existing tape backup software, but use low-cost disks rather than tape-are growing in popularity. EMC, Hewlett-Packard, IBM, and Sun/StorageTek all now offer VTLs, as do a wide array of smaller vendors, and most backup software vendors support virtual tape configurations.
In 2006, 23% of the SMB respondents reported they were likely to make increased investments in tape systems. Interest in tape renewed as disaster-recovery and compliance issues became more important. Tape continues to be the dominant technology for long-term archival of data.
However, it is premature to expect VTLs to entirely replace tapes in 2006. The cost benefits alone ensure tapes will continue to be used for off-site archiving.
Midrange disk arrays now rival high-end arrays in features (although not in scalability) but at a much lower price. Many arrays have Fibre Channel disk drives, and some come with a mix of SAS and SATA drives and offer sophisticated replication, mirroring, tiering, and management features.
Why not networked storage?
Drives with higher capacities for storage inside the servers, lack of internal staff expertise, and high acquisition costs often keep small and mid-sized companies from deploying network storage solutions (see figure, right). There have been rapid increases in drive capacities (e.g., 500GB SATA drives are now common) with adequate speed, low price points, and reliability that is sufficient for the SMB market, therefore minimizing the requirement of SMBs to deploy network storage.
SMBs have limited IT staff that often does not have the expertise to deal with the complexities of network storage. To increase SMB network storage adoption, storage vendors need to introduce new solutions that are cost-effective while hiding the complexities. Vendors must also provide configuration and management software, and provisioning solutions for e-mail, databases, and backup.
Improved data availability/performance and centralized backup/recovery are the key areas of interest in network storage adoption (see figure, below). For those small businesses that do want to adopt network storage, their priorities are to improve data availability and centralize backup/recovery. The top priorities for mid-market companies are improving data availability/performance, increasing storage capacity, and reducing backup/recovery time.
Some of the above objectives now can be accomplished by the increased availability of network-based disk-to-disk secondary backup solutions that employ SATA disks.
Compared to tape, these solutions help reduce backup/recovery time. They also help to increase storage capacity by migrating less-critical data to the secondary disk systems.
SMBs and mid-market enterprises prefer to buy complete storage solutions that address their particular problems. Unlike larger enterprises, they do not have the IT resources or expertise to buy pieces and integrate them.
The figure, above, illustrates buying preferences for 2006. The top small business storage priority for the next 12 months is to expand storage capacity; enhancing disaster recovery is the top priority of medium-sized businesses.
Storage technologies are expected to make the transition from hype to real solutions for SMBs in 2006. Examples include IP SANs based on iSCSI, e-mail archiving, remote office storage solutions, SAS/SATA systems, virtual tape, disk-based backup, and midrange arrays with high-end functionality. These technologies promise to solve the storage problems many SMBs have wrestled with for years.
SMBs have similar storage requirements as larger enterprises. Their data must always be available, protected against security threats, and backed up to protect against system failure or disaster. But the problem has been that many of the solutions have been too expensive and/or too complex. SMBs do not have the personnel and financial resources to take the necessary measures, even though they know they may be exposed. While larger enterprises have staff dedicated to continually evaluating, learning, and implementing newer technologies and solutions, SMBs are often limited to only part of one person’s time for these types of tasks.
SMBs and mid-mar-ket enterprises need to evaluate the following:
■ Portfolio of cost-effective storage systems and management software- Does the vendor have a broad portfolio of offerings? It is easier to work with a single vendor vs. several that offer best-of-breed solutions.
■ Complete solutions-Does the vendor provide pre-configured and pre-tested solution bundles to address your specific requirements? They are easier to buy and install.
■ Channel partners-Does the vendor have storage channel partners that understand your requirements and can provide solutions/support to meet your needs?
■ Customer support and service-Who provides the installation, support, and service for the complete solution? This is important because data is mission-critical and most SMBs can only withstand minimal downtime before they suffer significant financial impact.
■ Financing solutions-As storage becomes a key part of a longer-term IT strategy, SMBs need to consider vendor financing solutions.
Sanjeev Aggarwal is a senior analyst, small and medium-sized business strategies, and Sal Capizzi is a senior analyst, enterprise computing and networking, at the Yankee Group (www.yankeegroup.com).
IT managers at small to medium-sized businesses (SMBs) and mid-market enterprises now face many of the same challenges that their brethren at large enterprises faced some years ago. They must deal with storing growing amounts of diverse data, managing and protecting increasingly complex data, and sorting through a vast array of product and technology choices.
Consider the following results from Yankee Group research:
In 2005, SMB and mid-market storage spending was $13.5 billion-$7.1 billion on storage hardware, $2.8 billion on storage management software, and $3.6 billion on storage services, with an overall 2006 growth forecast of 14%;
Security and e-mail are the top-two applications/workloads driving storage capacity growth;
About 45% of SMBs with 10 to 499 employees and 35% of mid-market enterprises with 500 to 999 employees have not deployed network storage;
In 2006, there is strong interest in deploying IP SANs, disk-based data retention systems, and virtual tape systems; and
Improved data availability/performance and centralized backup/recovery are key areas of interest in network storage adoption.
SMBs and mid-market enterprises prefer to buy complete storage solutions that address their particular problems; they do not have the IT resources or expertise to buy pieces and then integrate them.
Suppliers of storage hardware and software recognize the growing market potential of SMBs and mid-market enterprises. Therefore, they are developing and delivering a number of new technologies and easy-to-use storage solutions designed specifically for this market segment. These solutions address customer problems as well as the lack of storage-focused IT resources with products for storage consolidation, backup and recovery, data availability, disaster recovery, and compliance.