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SAN Sales Thick in the Middle
Midrange sales challenge the high end as demand and features catch up
February 19, 2005
4 Min Read
When it comes to SANs, it looks as if the middle of the road is the place to be.
Major SAN vendors report burgeoning midrange sales, as an expanding pool of medium- to large-sized companies look to network their storage. These customers are drawn to modular designs, software advances, and the expansion of iSCSI as an alternative to Fibre Channel.
Midrange fever is manifest in a rash of recent news. In the last week or so alone, weve seen EMC Corp. (NYSE: EMC), Hewlett-Packard Co. (NYSE: HPQ), and IBM Corp. (NYSE: IBM) make midrange announcements:
EMC rolled out iSCSI capability for its Clariion midrange systems. Previously, EMC offered native iSCSI only for its high-end Symmetrix. EMC will likely sell iSCSI mostly on its low-end AX100i at first, but it is also making it available in the midrange CX300i and CX500i (see EMC Mounts iSCSI Blitz).
While it made no formal announcement, HP has new disaster-recovery software for its EVA SANs, including the EVA 3000 and 5000, that allows automatic failover for applications on the server cluster and storage. The software adds synchronous and asynchronous replication and remote mirroring to EVA systems.
IBM added an upgraded 146-Gbyte Fibre Channel drive to the DS4000 system it gets through an OEM deal with Engenio Information Technologies Inc. (see IBM Upgrades Tape, Disk, Software). The new drives spin at 15,000 rpm, up from the 10,000rpm spindle speed of previous 146-Gbyte drives. IBM also offers optional 300-Gbyte, 10,000rpm drives, increasing the maximum capacity of the DS4000 to 67 Tbytes.
According to International Data Corp, revenues for the range of SAN products priced in the range of $15,000 to $150,000 per device is growing more quickly than costlier high-end systems and is a more significant slice of the market than lower-end small- to medium-sized business (SMB) gear.
In the third quarter of 2004, for instance, systems in this price range accounted for $743 million in worldwide factory revenue -- up 6 percent from the quarter before. Systems in the $1,000 to $15,000 range were up 90 percent in sales, but that segment accounted for just $19 million. High-end systems priced at $150,00 and over dropped 9 percent in the same timeframe, representing a market of $898 million.Storage companies are showing midrange gains even if sales in other storage areas are lagging. Though storage sales at IBM dropped 11 percent year-over-year last quarter, the company had its best quarter ever selling its DS4000 midrange system. HP storage revenue was down from last year and flat sequentially last quarter, but sales of its midrange enterprise virtual array (EVA) systems increased more than 10 percent from the previous quarter.
“The midrange is the fastest growing segment,” says Charlie Andrews, IBM director of TotalStorage Solutions. “Elements migrate downstream from the high end to the midrange. Now we’re seeing more use of SANs, and more companies addressing business continuity, compliance, and migration in the midrange. Some of these features were mature in the high end, and now are becoming more prevalent in the midrange.”
Often midrange growth comes at the expense of the high end. For instance, EMC reported revenue from its midrange Clariion rose 45 percent from 2003 to 2004 while high-end Symmetrix increased 7 percent (see EMC Closes Year With a Bang).
Midrange mania started last year, with announcements from Hitachi Data Systems (HDS) and Sun Microsystems Inc. (Nasdaq: SUNW):
In December, Hitachi pitched its Thunder 9520V system for SMBs and other first-time SAN users, but stuffed it with features available in its high-end systems (see Hitachi Heads for SMB ). Those capabilities include virtual storage ports, support for 512 LUNs, and most of the same software available in higher-end Thunder systems.
Sun is building its storage strategy around the StorEdge 6920 midrange system launched last September (see Sun Sings New Storage Song and Sun Expands Storage). The StorEdge 6920, based on switches Sun acquired when it bought Pirus Networks for around $165 million in 2002, has intelligence such as snapshots and replication. Sun plans to support other vendors’ hardware this year (see Sun Beams on Pirus). Sales have been slow, but Sun CEO Scott McNealy called the StorEdge 6920 “a blow-away product” during his company’s earnings conference call last month. “It’s still a bit of a secret in the market place,” he said.
— Dave Raffo, Senior Editor, Byte and Switch0
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