Microsoft Raises NAS Roof

CHICAGO -- Storage Decisions 2003 -- Microsoft Corp. (Nasdaq: MSFT) said today that its much-anticipated Windows Storage Server 2003 has finally hit the market and that a number of its OEM partners are rolling out products to support it (see Microsoft Ships Windows NAS Server).

Microsoft started trumpeting its new platform at the break of dawn today at the Storage Decisions 2003 conference here. The company had a long line of storage hardware and software vendors in tow, each of which eagerly declared their undying support for the new file and print server software (see Vendors Jump to Back Microsoft NAS).

This just hits the sweet spot of where the market is right now,” said Chuck Hollis, VP of storage platform marketing at EMC Corp. (NYSE: EMC). “Customers want tools that work and that they know how to use.” EMC, of course, is Microsoft’s newest dance partner in the NAS space (see EMC Kisses Microsoft's NAS).

At this morning’s briefing, Bob Muglia, senior VP of Microsoft’s Enterprise Storage Division, said that the company has already signed on more than 20 OEM partners for the platform, including EMC, Dell Computer Corp. (Nasdaq: DELL), Fujitsu Ltd. (OTC: FJTSY), and Hewlett-Packard Co. (NYSE: HPQ). While the availability of NAS systems based on the software will depend on the individual partners, Muglia says he expects most of the OEMs to have rolled out products that incorporate Windows Storage Server by the end of this year.

Note that IBM Corp. (NYSE: IBM) was not among the list of Microsoft's partners: Big Blue inexplicably discontinued its Windows-based NAS systems this summer (see IBM Kills Runts of NAS Litter).The software, which succeeds Microsoft’s Windows Powered NAS platform, comes in an Enterprise Edition for enterprise data centers, and in a Standard Edition for departments, branch offices, and small and medium-sized businesses. It can handle as little as 160 Gbytes and as much as 40 Tbytes or more, and includes features like Volume Shadow Copy (VSS) for point-in-time copies, Distributed File System (DFS), eight-node server clustering, multipath I/O, and iSCSI support, Microsoft says.

The release of Windows Storage Server is no surprise -- Microsoft in June said that it expected to launch the new software this month -- but industry observers say they are impressed by the weight the company is putting behind the push (see Microsoft Powers Up NAS Play).

“The biggest thing here is how serious Microsoft is about this,” says Arun Taneja, an analyst with the Taneja Group. “I don’t think they’re going to be satisfied with just the low-end of the NAS space.”

Of course, companies like Network Appliance Inc. (Nasdaq: NTAP) and low-end NAS player Snap Appliance Inc. have been painfully aware of Microsoft’s gravitas about entering this market for quite some time. Since the computer giant founded its storage division in January 2002, it has grabbed 41 percent of the NAS appliance market in terms of units shipped, according to IDC.

And Microsoft’s Muglia says the company has no intention of stopping there. “My goal is that in the NAS space, people are as likely to buy Microsoft as they are in the general server space,” he says.Snap Appliance, which is one of very few players left offering low-end NAS devices running on an operating system other than Windows, must be feeling the burn most acutely now. But, as Microsoft continues to move up into the midtier NAS market and EMC uses its partnership with Microsoft to make its way down to lower ground, NetApp risks getting squished between them.

“We’re certainly facing a new dynamic in the marketplace,” EMC’s Hollis says. EMC’s soon-to-be released NetWin 200 will be based on Windows Storage Server.

But perhaps EMC shouldn’t feel so smug. Analysts warn that an 800-pound gorilla like Microsoft could eventually smash everything in its path -- including its partners. “Sooner or later, the machine will run you over,” says Enterprise Storage Group Inc. founder Steve Duplessie, pointing out that Microsoft could eventually compete directly with EMC’s Celerra NAS platform. “Eventually, they’ll hurt everybody.”

Taneja agrees that EMC’s alliance with Microsoft could prove a double-edged sword. “At the moment, it looks opportunistic,” he says, “but in 12 to 18 months, they’re going to need to make some strategic decisions... Long term, it’s not going to be worry-free for [EMC].”

Hollis, however, says he’s not worried: “We see the Windows Storage Server as complementary to Celerra. We think they’ll soldier side by side for a while.”— Eugénie Larson, Senior Editor, Byte and Switch