Will Microsoft give Network Appliance a run for its money when it releases Windows 2003 Server and Windows Powered Network Attached Storage (NAS) 3.0 later this year?
Wall Street is worried enough about the possibility that influential analyst Ashok Kumar of Piper Jaffray published a research note this week calling the Microsoft offerings "a serious challenge to Network Appliance's crown jewels."
Microsoft has embedded competing technology called "Shadow Copy of Shared Folders" in its Windows 2003 Server OS, according to Kumar, and NAS 3.0, an optimized file server based on Windows technology, is expected to be released soon after Windows 2003 Server.
"As vendors like Dell integrate Windows 2003 technology in their NAS products, Network Appliance will find it increasingly difficult to sell into the higher growth Windows environment," Kumar wrote in a research note this week. "Impact will be seen starting late this year as word gets out that Windows finally has an alternative offering. We believe this is not good news when the industry gorilla (Microsoft) begins to effectively commoditize Network Appliance's 'crown jewel' technology."https://o1.qnsr.com/log/p.gif?;n=203;c=204660765;s=10655;x=7936;f=201812281308090;u=j;z=TIMESTAMP;a=20400368;e=i
Analyst: Microsoft Not A Threat To High End At This Point
Industry analysts, however, don't appear to be as concerned about the Microsoft threat.
"Microsoft's new NAS OS does have some features that will enable their OEMs to start selling into the enterprise, however these new features should only enable them to compete in the mid-range, and not at the high end," said Nancy Marrone, senior analyst at Enterprise Storage Group. "There may be a slight impact to NetApp in the mid-range, and that will depend on how much support the OEMs give to the new features."
Microsoft's current market share is strictly in the entry-level market, Marrone said. "They have not been able to compete in the mid-range and high end due to performance limitations and lack of 'enterprise'-type features," she said.
By adding VSS, VDS and MPIO to the NAS 3.0 OS, Microsoft can now support snaps, virtualization and multi-pathing, Marrone said. "Snap and multi-pathing are the two key features that enable them to compete in the enterprise," she said. "However, neither of these is 'plug and play.' The OEMs can only enable those features through code development. VSS only works for supported applications, and MPIO only works with drivers written by each individual storage vendor. We do expect that the OEMs and storage vendors will support these features, but it's not quite as simple to do so as it may look at first glance."
"There is nothing that I am aware of that adds enough performance enhancements into NAS 3.0 to enable Microsoft powered solutions to compete at the high end," Marrone said.
Marrone said she expects Microsoft to announce support for running Exchange on NAS, "which will play very strongly into their push for server consolidation, so we do expect that they would pick up market share in Exchange environments."
Microsoft Official Speaks At HP Storage Conference
Charles Stevens, corporate VP in Microsoft's enterprise storage division, spoke at HP's National Storage Days conference in Orlando, Fla. yesterday, but he discussed neither NAS 3.0 nor support for Exchange, despite speculation that he would do so.
Instead, Stevens spoke about Microsoft's Enterprise Storage Division and the expanded relationship announced last month between HP StorageWorks and Microsoft Windows Powered NAS.
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