Network storage sees commercial growth

The Indian network storage market grew by 53 percent by factory revenues to reach $125.9 million in CY2005. Business continuity, disaster recovery, IP storage and storage virtualisation will set the pace in 2006, says Abhinav Singh

2005 witnessed a huge surge in data storage growth in India giving a spurt to the network storage market. The shift from DAS (Direct Attached Storage) to network storage continues. The total Indian storage market by capacity grew by more than 100 percent from 5,749 TB in 2004 to 11,780 TB in 2005. As per IDC India, the total Indian storage market (which includes network storage, secondary storage—discs and tapes) was $125.9 million in 2005 by factory revenue. The network storage market grew by 53 percent to $105 million by factory revenues in 2005 (in 2004, network storage was at $68.2 million). Sanjit Sinha, Senior Manager, Hardware, Software & Services Research, IDC India says, “To expand the market, vendors are aggressively focussing on their channel strategies which is helping them get access to the SMB market. Many have also come up with low cost SANs (Storage Area Networks) to target SMBs that are now adopting network storage like never before. These factors were buoyant in 2005.”

According to Sinha, there has been a strong thrust towards network storage from the banking and telecom sector, which has witnessed growth in their databases with the increase in the number of applications. Many have gone in for total branch automation and have an increase in their customer bases. He adds, “There is a move towards Disaster Recovery (DR) and Business Continuity Planning (BCP) by the banking and the financial sectors whereby all the DR sites require a similar amount of storage capacities to replicate their primary site data. This is also leading to an increase in the volumes of storage needed by the users.”

2005 also saw growth in mobile applications as mobile phones in India have become more than just a voice device for the users. The mobile phone has now become a key communication device for both data and voice services. Users are increasingly using the cellular phone for entertainment, gaming and music applications, giving rise to a huge amount of data that needs to be managed at the service providers’ end, thereby escalating the storage requirement. In 2005, the mid-market and SMBs also showed considerable adoption of storage solutions having crossed the first wave of networking. With PC usage having expanded in India, the country has witnessed accelerating growth in the total number of network users as well as the number of distinct customers or business partners who generate data via electronic transactions. The storage industry sees a shift towards shared storage, virtualisation and storage resource management. SMBs have begun to take storage seriously, and understand the importance of it.

Trends such as DR, BCP, storage compliance, virtualisation, Information Lifecycle Management (ILM) and low cost SANs which were popular in 2005 will continue to be dominant in 2006 too. Now let us take a close look at these trends that will impact the network storage market this year.

DR and BCP continue

In 2005, DR and BCP became buzzwords in the storage industry, especially when natural calamities like tsunamis, floods and earthquakes dramatically impacted the thought-process of organisations in India. These have become a top priority for organisations across verticals such as software, telecom, manufacturing, insurance, healthcare, finance, banking and government. Enterprises like ICICI Bank and Wipro Technologies have implemented full-fledged DR and BC solutions. Organisations in India are implementing backup, recovery and archiving solutions that help them store, archive, backup and restore their critical data and applications. Additionally, enterprises are adopting BC solutions to ensure that while restoration of site data and applications goes on at the disaster site, business continues from another site and customers get application availability round the clock.

Compliance-based storage hots up

The need for storing information for long periods and then retrieving it at short notice while adhering to regulations gave an impetus to the storage market around compliance. Almost all the major storage vendors are eyeing this market as they consider it to be of huge potential for them. Many Indian companies with business dealings in the US have been mandated to comply with the Sarbanes-Oxley Act, Basel II, Gramm-Leach-Bliley Act, EU Data Protection Act, HIPAA, 21 CFR Part 11 (life sciences) and DoD 5015.2 (government). Though adherence to regulations is derived out of business needs rather than government edicts, the situation is changing as compliance regulations evolve.

Major storage vendors such as IBM, Sun, NetApp, EMC and HP have designed a well-defined strategy to tap this emerging market. Demand for compliance-related solutions is on the rise, and growth is expected around storage solutions that cater to this need. The BFSI and telecom segments are expected to adopt newer compliance-based solutions in India. Many potential customers are seriously evaluating the need for such solutions as issues like corporate governance (which entails storing of data in a proper format) will be affecting companies.

The recent introduction of the Cheque Truncation System by the Reserve Bank of India, which means storing the digitised images of cheques in a proper format, is expected to drive the adoption of compliance-based storage solutions in the country.

Enterprise Content Management has also become imperative for enterprises in India, driven by the unprecedented growth in data, including structured, semi-structured, and unstructured information which is estimated to grow by approximately 50 percent per year. Of all enterprise information, over 80 percent of it is unstructured, and a bulk of it is not managed. Regulations are compelling organisations to store and manage data for specific periods of time giving rise to content management challenges. The various data theft scandals in the BPO industry have also made BPO organisations carefully analyse their data storage and security strategies. Hence, given the content management challenges, enterprises need to look at adopting well-defined and well-planned content management strategies in association with experts in the field.

Storage virtualisation at centre stage

"All sections of the computer stack are being virtualised. This is part of the trend towards utility computing. It includes the server, OS, application, network, and storage" -P K Gupta Chairman Storage Networking Industry Association

Many enterprises in India are expected to climb to the bandwagon of storage virtualisation in 2006. The concept showed popularity in 2005, but is yet to take off in a big way. Storage virtualisation as a concept has been existing for a long time, but is still to find takers in India on a large scale. Storage pooling, data migration and replication are some of the virtualisation technologies. Storage virtualisation is commonly used in SAN. The management of storage devices can be tedious and time-consuming. Storage virtualisation helps the storage administrator perform the tasks of backup, archiving, and recovery more easily, and in less time, by disguising the actual complexity of the SAN.

Says P K Gupta, Chairman of the Storage Networking Industry Association, “All parts of the computer stack are being virtualised. This is part of the trend towards utility computing. It includes the server, OS, application, network and storage. Historically, storage has always been virtualised, as when a physical device is carved up into logical devices. Now there is virtualisation across the storage systems into larger aggregated resources.”

Enterprises in India now need to store more information and more types of information than ever before. They also need to ensure that this information is safely retained for rapid recovery and better corporate governance. IT executives responsible for acquiring and maintaining the storage systems that hold all this information also face continued pressures to restrain spending and boost operational efficiency.

Rajesh Rege, Director, Sales, Sun Microsystems India states that “Enterprises are now reflecting new concerns for simplicity, effective storage utilisation, manageability, and availability of storage. Storage virtualisation allows IT departments to easily deploy tiers of storage based on specific application requirements for performance, capacity and cost-effectiveness. It facilitates unified data replication so that IT managers can easily migrate or move data between different types of storage, including legacy systems. It also helps to automate provisioning, expansion, and data protection tasks across heterogeneous storage systems to boost IT administrators’ overall efficiency.”

Comments Avijit Basu, Country Marketing Manager, Enterprise Servers and Storage, HP India Sales, “Virtualisation in storage ensures maximum storage capacity utilisation and keeps business-critical data and mission-critical data in tiered storage. Virtual RAID, and virtual snapshot and snapclones automate arrays considerably.” Broadly speaking, storage virtualisation has resulted in better storage utilisation.

"Enterprises have been able to save storage costs by increasing the utilisation of their storage discs, a significant increase of more than 50 percent" -George Thomas Country Manager India and SAARC NetApp Systems

According to George Thomas, Country Manager, India and SAARC, NetApp Systems, “Enterprises have been able to save storage costs by increasing the utilisation of their storage discs, which is a significant increase at more than 50 percent. The BFSI, telecom and the energy verticals are expected to adopt storage virtualisation this year having already seen bits of deployment in 2005.”

ILM chugs along

ILM is coming up more as ‘a market direction for storage.’ It is a direction that the entire storage industry shall move in, much as the case has been with network storage over the last two years. Implementing ILM means a lot of effort in identifying and categorising business data which is often a specialist’s job. Storage vendors are therefore eyeing revenues through consultation services for implementing ILM.

Companies are gradually adopting ILM strategies to protect corporate and Intellectual Property information. Depending on the criticality of data, organisations should keep fine-tuning their strategies. Telecommunications, insurance, government institutes and banks are the main verticals adopting ILM. ITC in Kolkata, Tata Elxsi for their visual computing lab in Bangalore, Tata Teleservices in Hyderabad and Mumbai, and Hutch across India are all practising different stages of ILM.

Explains Basu, “ILM is a process which recognises that information has a lifecycle. It is the next step for the storage industry. ILM now links the storage utility to applications and enables the control and intelligent management of information. It controls the movement of data across storage technologies from high-performing discs to mid-range discs systems to tape to optical.” ILM enables intelligent index, search and retrieval of relevant information to comply with business policies and government regulations. Many enterprises adopted it and many more are expected to do the same in India.

Low cost SANs maintain their momentum

"During 2005, IP-based storage attained increased prominence at the enterprise level because it helps in total network consolidation of storage resources at a lower cost and centralises the architecture" -Manoj Chugh President, India and SAARC EMC Corporation

Low cost SANs or IP-based SANs are expected to continue their growth momentum in the market. Sanjay Kharade, Principal Consultant, Cisco Systems, India & SAARC says, “The introduction of IP to the storage networking industry is transforming it from a closed and proprietary world to one which is open and based on industry standards with a strong pace of technology innovation. As per research firms, IP SAN is expected to garner more than 25 percent of the global storage market by 2007. We are expecting that a large chunk of FC SANs will move to IP SAN, and low-cost Fibre Channel to Internet Protocol would be available.” Organisations such as Wipro Spectramind, Mphasis and L&T Hazira have gone in for IP SAN deployment in a big way in the near past. Research firms like IDC India feel that the growth of low-cost SANs will continue. Adds Sinha, “Low cost SANs are easy to deploy, hence we expect widespread adoption of this technology in 2006.”

Manoj Chugh, President, India and SAARC, EMC Corporation says, “During 2005, IP-based storage attained increased prominence at the enterprise level because it helps in total network storage consolidation of storage resources at a lower cost and centralises the storage architecture. It also helps in leveraging existing investments in FC SAN.”

Services around storage to spin money

With storage complexities on the rise, services built around storage are expected to become a hot area for storage vendors. NetApp championed it in 2005, and EMC and Brocade followed suit and have successfully entered the storage consulting and services arena. With rising storage complexities, storage vendors are finding an opportunity to offer storage services. Service and consultancy around storage can start at a basic level of creating a blueprint of network storage, or at the pre-implementation stage (sizing of storage), or during the implementation stage, or during the post-implementation stage when the customer wants to scale-up his storage architecture.

Storage vendors are also providing services around storage consolidation to help customers align their architectures with their business requirements. For example, storage consulting can be built around classifying information, aligning applications and migrating data so that their customers are able to consolidate server and storage environments and accomplish data centre re-locations with less complexity, risk and cost. Vendors are also providing storage management optimisation services which help customers analyse the state of their storage management operations and identify what improvements need to be made; in addition, it helps them integrate people and policies as per their business requirements.

As far as availing storage services is concerned, large-scale adoption by big enterprises has been seen, but the smaller ones are yet to avail of these. Large enterprises, mainly from the BFSI or telecom sector, are expected to drive services around storage due to the unpredictable growth their businesses are subjected to.

Companies in the telecom sector are witnessing a huge spurt in their subscriber base and hence are expanding their storage infrastructure rapidly. It is expected that small enterprises will avail of such services on an as-needed basis. Large enterprises are expected to employ tactical professional services to mitigate their storage complexities due to the complexities of their businesses. However, in order to be successful in the new emerging segment, vendors will have to ensure that they have trained professionals who can provide to-the-point service to help customers achieve optimum utilisation of their storage assets, and also tailor-make their solutions to precisely fit the requirements of their customers.

The year looks bright

All the trends highlighted in the network storage market are expected to continue in 2006 as well. But regulatory compliance, DR, BCP and content management are expected to drive the network storage market in India like never before. As companies are consolidating their servers and storage in data centres, storage solutions for data centre management will grow. Since managing data growth is the biggest challenge for big customers, future growth will be in e-mail, file systems, databases and content archival solutions.

High availability solutions will also grow as many investors are asking for stringent service level agreements. “There has been an increase in the number of digitised television channels in India, and they are expected to generate huge content in the market which then will have to be properly managed,” Sinha points out. “Although the Indian storage market abounds with many technologies, it remains to be seen how CIOs are going to buy these technologies and whether they will be involving business managers for buying the same. The key for CIOs in the coming year is to align their IT needs more closer to business goals. In order to achieve this, active participation by the line of business managers in key storage implementation holds the key to success.”

abhinav@expresscomputeronline.com