Published: 10 Oct 2006
A whole new ballgame?
As you read this, a great American tradition is taking place as the best of both baseball leagues duke it out in the annual "fall classic." At the same time, on playing fields (that look suspiciously like data centers) across the country, another age-old rite is enduring as storage vendors square off and try to bash the daylights out of each other.
Just like ball clubs that reach into the minor leagues for fresh bats and arms, storage vendors are letting loose their speeds 'n feeds spiels, brushing back the competition with borderline pitches and padding their lineups with new products.
But in the storage big leagues, this isn't the culmination of a long season, it's only the beginning. Just when it looked like EMC was going to run away from the competition, all of a sudden it looks like a race again. EMC must be looking over its shoulder at a revitalized Hewlett-Packard (HP), which once again looms as a serious contender. It's an impressive turnaround for HP, but it needs to keep an eye on the rest of the pack, as there are ominous rumblings for market share as four more key players--IBM, Hitachi, Dell and Sun--take swings at each other.
I'll give the baseball met-aphors a rest and explain why I think the storage market is entering a new phase--one you can take advantage of if new system purchases are in your plans. Two recent news items may signal a shift in the landscape.
The first was last month's quarterly storage market report from IDC. IDC churns out these stats each quarter, and just as predictable are the "EMC widens its lead" press releases that inevitably follow IDC's rankings. But it would have been hard to predict the numbers in the latest report. Yes, EMC still appears to be on top, but IDC's press release said EMC and HP "finished the second quarter in a statistical tie for the number 1 position."
IDC's latest figures for external storage peg longtime leader EMC with 20% of the market (based on revenue) and HP trailing by a scant seven-tenths of a percentage point. (HP continues to lead in total disk storage sales, which includes direct-attached server, PC and laptop storage, as well as external systems.) You might think there's a little smoke and mirrors at play given HP's recent cost-cutting moves, but these are revenue numbers, not the kind of bottom-line legerdemain that boosts profits by shedding employees. HP has spent the last year rolling out new products, highlighted by the long-awaited refresh of its popular EVA line of arrays. It remains to be seen if the slimmer HP can sustain sales and, more importantly, satisfactorily support its users; however, it's clear HP is selling more storage stuff than a year ago.
The other interesting news isn't directly about storage, but it could have an impact. Just days after IDC's storage numbers came out, Gartner released its second-quarter tally of server sales revenue and corresponding market shares. The big news here is that Sun--given up for dead on innumerable occasions--jumped past Dell into third place behind IBM and HP. That, undoubtedly, puts joy in the hearts of Sun's server group, but it's probably also pretty encouraging for its storage jockeys. Much, if not most, of Sun's storage sales go to companies that are also committed to its server platforms; so more server sales could easily translate into rising sales on the storage side. This coattail effect is enjoyed by the other top server sellers, as IBM, HP and Dell can all offer end-to-end solutions to their users--something storage goliath EMC can't do.
Toss in a few so-called startups that are racking up some serious sales, and you have a storage market invigorated by resurgent competition. All-out competition--coupled with the notion that No. 1 isn't out of reach anymore--means vendors might be more inclined to cut some good deals to continue climbing the ladder or to keep from toppling off the highest rungs. Batter up!
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