BY HEIDI BIGGAR
According to a recent report from Peripheral Concepts, a market research firm in Santa Barbara, CA, end-user interest in storage area networks (SANs) essentially remains unchanged from last year. The market researcher pegs current end-user SAN adoption at about 15%, with another 12% to 15% in various stages of implementation.
"[The adoption rate] isn't changing much, despite the wider awareness of SANs," says Farid Neema, president of Peripheral Concepts. "Some people are either going to another approach, which could be network-attached storage [NAS], or are just staying with direct-attached storage."
The Peripheral Concepts report, SAN-Infrastructure, Products, and Market Opportunity, analyzes data from five independent user surveys of more than 1,000 medium and large IT organizations over the last two years. The surveys were analyzed individually and compared to each other and to Peripheral Concepts' 2000 study.
Six vendors account for almost 90% of the total revenues for SAN/NAS disk arrays.
"We found that there is still a population that sees no advantage or no reason to go to a SAN," says Neema. "Forty percent of the IT organizations surveyed still have no plans to deploy a SAN in the foreseeable future." The perception among some end users is that SANs are still intrinsically expensive, complex, and immature, he says.
Nonetheless, Neema expects both SAN and NAS revenues to more than triple by 2003 (see figure). "SAN and NAS revenues are increasing to the detriment of direct-attached storage," he says, "but DAS won't disappear. However, it can't continue to double because the total storage revenues are increasing at only 14% to 15% per year."
According to Neema's forecast, SAN revenue will jump from $4 billion last year to $14.5 billion in 2003, while NAS revenue will approach $6 billion in 2003, up from $1.7 billion last year. Revenue from sales of external DAS, meanwhile, will hover around $11 billion through 2003.
Reaping the rewards of today's $10+ billion SAN/ NAS disk-array market are Compaq, EMC, Hewlett-Packard, IBM, Network Appliance, and Sun. These six vendors, says Neema, account for almost 90% of the total SAN/NAS disk-array market revenue.
IP SANs are expected to begin ramping up in 2003, although some products will ship this year.
In the fast-growing Fibre Channel switch market, Brocade (48%) and McData (30%) took in 78% of the total revenue. In the host bus adapter (HBA) market, Emulex (34%) and QLogic (20%) accounted for 54% of market revenue last year (see figure on left).
Neema expects the switch, HBA, and router markets to increase, on average, threefold by 2003. Fibre Channel switch revenue, for example, will increase from $840 million to $2.9 billion. The hub market, in contrast, will remain flat over the period.
As for the influx of IP storage technologies-including "pre-standard" iSCSI products-into the SAN space, the market will start feeling the effects in about two years, Neema predicts. "We'll begin to feel it in 2003. Though there will be products before then, there won't be enough to make a dent in Fibre Channel revenues." By 2005, Peripheral Concepts projects IP-SAN revenues to account for about 22% of total SAN revenues, versus 78% for Fibre Channel SANs (see figure above).
Networked storage revenues are expected to eclipse DAS revenues in 2003.