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.”