NAS Market on the Ups

Originally considered a niche product category, the network-attached storage (NAS) market has experienced a surprise increase in popularity in the storage space over the last six months.

So says the latest report from Frost & Sullivan, titled "European Network Attached Storage Market. It reveals this market generated $410 million in 2000, and projects revenues to reach $1.8 billion by 2007.

"The NAS approach is easier to implement and, combined with a low cost of total ownership, has proved itself attractive to customers who are managing explosive growth in data within a finite budget," says Frost & Sullivan research analyst Andrew Ball. "In this environment, specialized NAS vendors have enjoyed rapid growth, while traditional storage and server vendors have attempted to leverage their expertise to deliver new NAS solutions to the market."

Ball is referring to EMC Corp.’s (NYSE: EMC) huge effort to catch Network Appliance Inc. (Nasdaq: NTAP) in the NAS space. And it has apparently paid off. EMC claims to have shipped more NAS boxes in the first half of this year than Net App (see EMC Sues Over Secrets).

Interestingly, the strongest revenue-generating NAS markets are in the U.K., Germany, and France, which Ball puts down to companies in these regions adopting the technology later and therefore going for the newest solutions. He says the U.K. has a disproportionate share of the market, "which is a reflection of the close affinity with the U.S. and the fact that NAS has been developed and implemented by U.S. companies."According to Ball, the entrance of heavyweights like EMC and server vendors like Compaq Computer Corp. (NYSE: CPQ) into the NAS market has legitimized and raised its profile as a storage solution.

"Those companies best placed to capitalize on this are the dedicated NAS vendors who can draw strength from their years of experience," says Ball. Auspex Systems Inc. (Nasdaq: ASPX), one of the oldest NAS players on the block, is hoping this trick will work (see Auspex on the Mend), as is Quantum Corp/Snap Appliances (NYSE: DSS).

— Jo Maitland, Senior Editor, Byte and Switch http://www.byteandswitch.com