Storage Virtualization Enters Hot Second Phase


Acquisitions in the storage virtualization sector topped more than $4.2 billion since 2000, as the sector entered its second phase of evolution, according to The 451 Group.

While major vendors were reticent to latch on to virtualization because they feared it could cannibalize their products, daring companies made acquisitions on that front. Or they forged their own virtualization products, creating virtual storage pools and consolidated servers, which cut IT costs.

"Major vendors, such as IBM and EMC, are now embracing virtualization, since it helps them address short-term tactical customer issues, such as data migration, and it positions them for more strategic capabilities that help enable their larger enterprise visions around ILM and utility computing," said Simon Robinson, sector head for Storage & Systems at The 451 Group.

Cisco Systems , IBM and Veritas are considered virtualization pioneers. But the second turn will feature more consolidation and innovation, with EMC , McData and Network Appliance likely to lead the storage pack, said Robinson in a year-end report.

The analyst expects virtualization will be a key enabler of information lifecycle management (ILM), a strategy among storage providers. ILM proposes cost-effective ways for customers to manage storage in tiers according to file relevance.

ILM, which EMC has championed since 2003, is expected to improve the way enterprises meet compliance regulations from government agencies, such as SEC 17a-4 and HIPAA.

Chided for the last couple of years by IBM and HDS for not having a virtualization offering, EMC's engineers are crafting a Storage Router for 2005.

EMC officials claim the product will feature better throughput and overall performance than products from IBM and HDS. The device will run on Cisco Systems' intelligent switch platform, with support for platforms from Brocade and McData to follow.

EMC has reason to want to raise the bar. Not only is it behind rivals in the virtualization hunt, but storage infrastructures are becoming more complex, meaning customers need new hardware and software to help them be productive at less expense. This means new revenue opportunities for vendors that can create value for customers.

Going forward, the research firm expects mergers among file system virtualization companies and NAS aggregators and/or iSCSI storage startups to be red hot, with targets featuring exciting new technology. Innovation around file virtualization and iSCSI storage may also drive additional mergers and acquisitions, Robinson said.

The 451 analyst also predicted software makers will write virtualization-based storage management applications to run on the new infrastructure. These apps would operate at the file level, making them vital to data archiving to meet compliance requirements, as well as at the physical block level.

Although virtualization is promising, but not everyone is in agreement on how and when it should be used to simplify IT, he said.

"There are still deep divisions between vendors over where virtualization should be implemented, and how," Robinson said. "This continues to cast a shadow over the storage virtualization space, which could impact user adoption."


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