Why There Won't Be a Big 3 in Storage

For almost the last decade there has been the constant prediction of consolidation of the storage industry, where the eventual scenario is a Big 3 of storage. Could Oracle's purchase of Sun be the domino that falls, triggering one of the largest consolidations of storage that we have seen thus far?

Picture this, IBM disappointed in not getting Sun and decides to buy NetApp. Cisco may then feel the need to respond, so it buys EMC. HP not wanting to feel left out goes after HDS or 3Par. Dell, also feeling the need to respond, buys Compellent -- and all of this happens within the next year!

That's a lot of consolidation in a short time and it will have ripple effects throughout the industry. At the surface we could get to that Big 3 scenario that everyone has predicted for years now, so we can finally draw the parallel to the automotive industry. Given the state of the auto industry I am not sure why we'd want to, but it is always held up as the example.

Reality is that this won't happen in IT in general and storage in particular. Let's face it, we can't even all decide on a standard protocol (Fibre, FCoE, iSCSI, NFS, CIFS, or Infiniband) and it is unlikely that three companies will take over the industry.

Also consider that this is not a logistics-ladened industry. A smart guy with a workstation can design the next great quantum leap in storage, and he can do so quickly. The hardware part of the puzzle can be easily outsourced -- look at EqualLogic (pre Dell), Compellent, NetApp, 3PAR, etc. -- for the most part, they outsource the hardware end of the system. Even when companies like BlueArc or 3PAR put their intelligence in the silicon, they do not initially need to go out and build a fab plant, they can outsource that too.To some extent we are even seeing parts of the storage software itself be outsourced. Look at OnStor's recent announcement -- they're leveraging ZFS instead of spending time developing their own file system. This allows them to focus on the data management aspects of the storage system. I'd expect this sort of leveraging of other software components to continue to grow in popularity.

Sure we have seen some consolidation -- Oracle buying Sun, Dell buying EqualLogic, HP buying Lefthand -- and switches are now basically down to Brocade and Cisco, HBA's have consolidated a bit, and there are rumors the Emulex will be gobbled up soon, so all of my above predictions might come true. Yet, as quickly as a consolidation move happens, another four young companies appear. Storage is like the mythical Greek Hydra -- you lop one head off and two more grow in its place.

There is always some smart guy or gal out there that has an idea about a better way to do it. The tools and resources for him or her to develop a company thanks to the Internet are basically free, and he or she can leverage hardware and software outsources to complete the vision.

George Crump is founder of Storage Switzerland , which provides strategic consulting and analysis to storage users, suppliers, and integrators. Prior to Storage Switzerland, he was CTO at one of the nation's largest integrators.

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