External Disk Storage System Marketplace Trends

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During 2003, storage services surpassed disk systems as the dominant overall market segment. Services inched ahead with a 40 percent share, according to figures released by International Data Corporation (IDC) of Framingham, MA. Disk systems followed at 39 percent, then software (11 percent), tape automation (6 percent), and Fibre Channel (FC) infrastructure (4 percent). The improvement in services also bodes well for the storage industry overall.

“We saw a 13 percent increase over quarter in storage spending in Q3 03,” reports Steve Duplessie, an analyst with Enterprise Storage Group.

After reigning supreme for many years, the slowdown in disk systems spending has been apparent for a decade. According to IDC, between 1994 and 2000, the combined annual growth rate (CAGR) of disk systems was four percent. The disk systems market peaked in 2000 with revenues reaching $31 billion. It crashed to $20 billion in 2002 and was slightly down again last year.

Further growth for disk storage systems is predicted over the next three years, says John McArthur, a storage analyst with IDC, “though at a modest 0.8 percent annual rate.”

Although growth of disk systems is stunted, the size of hard drives continues to explode. Enterprise hard disk drives have grown from an average of less than 4GB in 1996 to 40GB at the end of 2002, according to McArthur. But enterprise disks are no longer larger than their desktop counterparts. IDC reports desktop disks are ahead, as OEMs are fitting PCs with bigger drives.

The disk drive market is strongest in the $12 billion desktop category, defined as mainly Intel-based single-user devices. Entry-level servers are next, defined as those selling for less than $25,000, with NAS and DAS RAID subsystems included in the category. Growth in the desktop and entry-level sever segments, however, remains very slow — 0.2 percent and 1.2 percent, respectively.

Where a significant increase can be seen, though, is in the workstation and mid-range/high-end server system markets. The mid-range and high-end storage/server systems segment (defined by IDC as systems selling for more than $25,000) is currently a $1.82 billion market, with an annual growth rate of 12%. Traditional workstations (primarily RISC-based systems running UNIX for graphics and technical applications) had a staggering 22.6% rate of growth, though its dollar value is only $87 million, per IDC numbers.

Page 2: Disruptive Influence

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Disruptive Influence

Two factors identified by IDC as disruptive technologies are ATA-based subsystems and iSCSI. As the data transfer rate of ATA has grown, its usage has transitioned from the desktop to workstations and entry-level servers. As a result, ATA is regaining market share from SCSI is several market categories.

“More and more, we are seeing ATA taking over from SCSI in the enterprise marketplace,” says McArthur. “There appears to be greater usage of slower ATA and Serial ATA (SATA) drives for various uses due to its low cost and high capacity. SCSI on the other hand tends to be faster, more expensive, but more reliable”.

SCSI data rates, too, have been steadily increasing over the past few years. Thus SCSI has also evolved — from desktop drives in its early days to mid-range and high-end storage/server systems. The latest revision to the SCSI standard, Ultra320 SCSI, doubles the maximum data transfer rate for the SCSI bus from 160MB/sec to 320MB/sec.

McArthur believes a market dichotomy is emerging: Fibre Channel (FC) SCSI and Serial-Attached SCSI (SAS) drives, operating at 15,000 rpm, at the top of the disk hierarchy. They will become the norm for high performance applications and business processing.

ATA and SATA drives running at around 7,200 rpm will be the norm at the lower end. They will be used mainly for email, file, and print servers and low-end storage.

Eventually, IDC sees the market share of SCSI falling from its high of over 90 percent in 1998 to a little over 30 percent by 2006. SATA and FC, on the other hand, will gain ground. FC will grow to over 10 percent of the enterprise storage market, primarily for use in high-end SANs. SATA will probably surpass SCSI by 2006 with over 40 percent of the total.

“SCSI will become focused on mid- to high-end servers and networked storage,” says McArthur. “SATA’s focus will remain on entry servers, fixed content, and as a supplement for tape backup.”

McArthur sees this shift as an opportunity for the emerging iSCSI technology, which will gain ground especially in new areas such as upgraded storage for old data that resides on microfiche.

Feature courtesy of Enterprise IT Planet.


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Drew Robb

Drew Robb
Drew Robb
Drew Robb is a contributing writer for Datamation, Enterprise Storage Forum, eSecurity Planet, Channel Insider, and eWeek. He has been reporting on all areas of IT for more than 25 years. He has a degree from the University of Strathclyde UK (USUK), and lives in the Tampa Bay area of Florida.

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