RAID market consolidating; Artecon, Storage Dimensions merge
The RAID market is growing at a healthy clip (22% growth last year, with total revenue around $16 billion), yet further vendor consolidation is expected over the next few years. The most recent example is the merger of Artecon Inc. and Storage Dimensions Inc. Artecon, in Carlsbad, CA, targets the Unix market, while Storage Dimensions, Milpitas, CA, concentrates primarily on the NetWare and Windows NT PC-LAN arena. Based on recent revenue figures, the merger is expected to result in a company with annual revenues of approximately $170 million.
There are currently about 150 vendors of RAID arrays. And analysts predict that, even at 20+% annual growth rates, the market cannot support that many vendors.
According to a recent report from Peripheral Concepts Inc. and Peripheral Research Corp., both in Santa Barbara, CA, 86% of total RAID revenue is garnered by only eight vendors: IBM, EMC, Compaq, Digital Equipment, Sun Microsystems, Hewlett-Packard, Hitachi Data Systems (HDS), and Data General`s Clariion unit. The next 10 vendors account for 8% of the total revenue, leaving only 6% to some 130 vendors.
Farid Neema, president of Peripheral Concepts, expects the number of "major" RAID vendors to dwindle from about 40 companies today to 30 within the next three years. (Non-major RAID vendors include niche-market players that specialize in specific application markets.)
The 235-page report ("Intelligent Storage Arrays") from the two research firms covers a number of other important trends in the RAID market:
- One budding trend is the implementation of RAID controllers in fewer and fewer ASICs, which allows OEMs to add RAID functionality to motherboards. Controller vendors such as Adaptec and Mylex are leading this trend. Meanwhile, operating systems--most notably Windows NT--are incorporating more and more RAID functionality. Both trends may contribute to further market consolidation.
- New file systems are emerging that enable users to share all storage systems on a network, while providing RAID functionality at the file level. Leading file-system developers include Programmed Logic Corp. (PLC), Tricord, and Veritas Software.
- The market for network-attached storage (NAS) and storage-area networks (SANs) is expected to take off rapidly over the next couple years (see figure). Other technologies expected to fuel growth in the RAID market include clustering, which should pick up when Windows NT 5.0 is shipped later this year, and data sharing. High-end data sharing comes from vendors such as IBM, EMC, and Encore Computer, which was recently acquired by Sun.
Neema says that another hot technology is network-ready storage (a.k.a. "thin servers"), which are a subset of network-attached storage. Representative vendors include Artecon, Creative Design Solutions, ECCS, Network Solutions Corp., Mylex, and Streamlogic. Optical storage vendors such as Maxoptix are also getting into the network-ready storage market.
For more information about the "Intelligent Storage Arrays" report, contact Peripheral Concepts Inc. at (805) 563-9491 or Peripheral Research Corp. at (805) 563-9720.--DS