Storage management industry goes through drastic consolidation
Prediction: The storage management market will consolidate around fewer vendors in 2003, with less than 60 percent of storage management startups still standing by end of year.
Larger storage management vendors will acquire only a select, smaller percentage of those vendors. As a result, customers will need to streamline their storage management strategies by consolidating the number of vendors they support, shifting from best-of-breed point products to a focus around fewer vendors that offer integrated management products. Large vendors will continue their shopping sprees begun in the fourth quarter of 2002 by purchasing a number of smaller startups with innovative technologies. Accelerating an on-going trend, enterprises in 2003 will need to create specific storage management strategies that address application requirements, better ROI benchmarks, and data maturity models.
Cisco takes sizable chunk of Fibre Channel switch market share
Prediction: In 2003, Cisco will aggressively grow its market share of the Fibre Channel switch market to attain 12-15 percent of the fabric switch market.
Cisco plans to make its Fibre Channel products available in the first quarter of 2003 and has delivered the product to a number of beta sites already. It will leverage its expertise in understanding enterprise customers, sales channels and networking technologies. Enterprise customers will deploy Cisco storage networking products as an extension of an on-going relationship, the primary road to Cisco's success in 2003.
The Yankee Group expects the storage networking market to reach $2.3 billion in 2003.
To succeed, Cisco must:
- Deliver first products on time
- Sign up storage system OEMs
- Actively build its partnership strategy
IT spending to remain flat, with a few exceptions
Prediction: IT spending will remain flat for 2003, with some limited exceptions including storage management.
A recent Yankee Group survey showed that IT budgets were up approximately 5% from 2001 to 2002. We predict that 2003 IT budgets will be within 3% of 2002 levels. We expect to see increased spending in the areas of network and storage management software as companies look to gain better control over their IT infrastructure. We also expect to see increased spending in VPN infrastructure and IP telephony as companies look to leverage their technology infrastructure to provide a more efficient method of delivering business services. We expect to see decreased spending in legacy voice technology, PCs and layer 2 switching.
About the author: Jamie Gruener is the primary analyst focused on the server and storage markets for the Yankee Group, an industry analyst firm in Boston, Mass. Jamie's coverage area includes storage management, storage best practices, storage systems, storage networking and server technologies.