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Short-term needs of NAS

I do executive search work for companies in the storage industry. I have a client in the NAS space that makes and sells a high-availability network-attached storage appliance. They are interviewing a candidate of mine that has an excellent background in selling NAS (last five years) but the product management people are not sure of the products viability to sell on the market at this time. Can you give me any insight on the short-term needs of NAS or the markets a small NAS company would focus on? I want to see if I can overcome their reluctance to move by providing them with some information.

The growth of NAS is very steady and IDC predicts it will reach $14B by 2004 from $4B in 2001. With that growth there's a great deal of opportunity. You can tell about a growth area by how many competitors are entering the market. There are quite a few now and many that have been in it for less than two years.

The NAS market has traditionally been one that is consolidating multiple file servers to a single appliance primarily for file sharing. The justification has been based on savings in administrative costs, primarily. With many players, there is formidable competition but there are also niche markets.

Niche markets usually are those with solutions for a particular industry where software and servers are packaged together with the NAS market. This is a very price competitive area with distribution through many channels including sales over the Internet.

Like I stated before, there's good opportunity if you have the distribution outlet, the right cost structure, and a product that fulfills the basic needs for the market segment that is targeted. The product requirements are different for the different segments. A high-availability NAS product would be typically seen in business operations that require some availability guarantee for access. The performance requirements vary based on type of data, frequency, and network characteristics. Security is becoming a more visible issue and has been an improving area for many product offerings.

I hope this helps. I think it's a good market and will continue to expand.

Randy Kerns
Evaluator Group, Inc.

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