Fed Storage Spending Lifts Off

Storage gear will soon gather and back up data from places where no human has yet dared to go -- and apparently, it's all part of a trend.

NASA is loading up on storage systems from Silicon Graphics Inc. (SGI) (NYSE: SGI) and other providers for its Project Columbia, designed to accelerate the rebirth of space missions.

NASA plans to use twenty 512-processor SGI Altix supercomputer systems with a 500 terabyte InfiniteStorage SAN system to create its Space Exploration Simulator. Gear from Brocade Communications Systems Inc. (Nasdaq: BRCD), Engenio Information Technologies Inc., and Voltaire Inc. will also be part of the simulator, which will be among the worlds largest Linux-based supercomputers.

The NASA project comes at a time when federal government IT spending is picking up. According to a report from market research firm Input, the U.S. Federal Government awarded more than $23 billion in IT contracts during the second quarter of 2004, up 50 percent over the $15.5 billion awarded during the second quarter last year. Input says the federal IT storage-related budget grew from $121.1 million in 2003 to $134.3 million this year.

Input doesn’t break out how many contracts are storage related, but storage vendors have announced partnerships with around half of the most active defense contractors listed in the report, including Lockheed Martin Corp.The vendors are over the moon about the NASA work. NASA will use Voltaire’s 288-port InfiniBand switches and multiple InifinBand adapters in each server in the Project Columbia deal. Voltaire marketing director Asaf Somekh says the overall number of processors involved will make it the largest configuration the InfiniBand interconnect has been used for so far.

Voltaire’s InfiniBand gear is used in large government labs, including Sandia National Laboratories and Los Alamos National Laboratory.

Voltaire sees the NASA work as part of a renewal of government orders for storage technology. “We’ve seen a lot of government spending last year and this year -- it’s been a very nice trend,” Somekh says.

Other vendors, not necessarily part of the latest NASA deal, concur. Backup software vendor BakBone Software Inc. (Toronto: BKB), for instance, also counts NASA as a customer. Last February, BakBone announced that its NetVault software was used by the NASA Langley Vehicle Analysis Branch to back up flight trajectory and atmospheric data from the Mars Rover. BakBone expects NetVault will also be used in future NASA space missions.

BakBone won another government contract in June for NetVault as part of major IT contractor Titan Corp.’s deal with the Administrative Office of the United States Courts (AOUSC) (see U.S. Courts Decide on BakBone ). Titan won six government contracts last quarter, according to Input.Some of the largest government contracts are awarded by the Department of Defense, and storage companies are positioned to gain there. Lockheed Martin, which led all contractors with seven DOD awards last quarter, is either a customer or partner with several storage companies, including EMC Corp. (NYSE: EMC), Network Appliance Inc. (Nasdaq: NTAP), Computer Network Technology Corp. (CNT) (Nasdaq: CMNT), and blade server vendor Verari Systems Inc. (see EMC Expands Lockheed Partnership, MPI, NetApp Team for Streaming, Lockheed Martin Locks in CNT, and Verari Goes Off the Rack).

Another of the top Defense contractors, Computer Sciences Corp. (CSC) (NYSE: CSC), has an alliance with SAN management software vendor CreekPath Systems Inc.(see CreekPath Partners With CSC).

For all this activity, nothing's written in stone when it comes to government work. Voltaire's Somekh says that, while his company has done well with laboratories, government agencies can be fickle customers that are often hard to retain.

“These are the types of customers looking around all the time,” he says. “They will have no problem switching to a better product.”

— Dave Raffo, Senior Editor, Byte and Switch0