Published: 08 Mar 2005
Here's a little secret we'd like to share with the storage community. The next big thing in storage will be consumer NAS appliances.
As a storage professional, you may say, "Who cares?" Your job involves storing and managing terabytes of data, not home devices. Don't be so sure. You may be called upon to back up and manage the home storage systems of C-level folks and many remote users. With ease of use and backup services built in, home storage equipment is bound to become a de facto standard for small businesses and remote offices. Furthermore, individual departments will surreptitiously install consumer storage systems just as they add rogue wireless access points and Web servers today. Storage professionals will definitely need skills to find, secure and manage these mini-NAS boxes.
You've been warned, but you still might be wondering: "Why consumer NAS and why now?"
Driver 1: Broadband networks
At the end of 2004, there were roughly 30 million broadband subscribers in the U.S. and more than 60 million worldwide. DSL providers claim their subscriber base grew by approximately 10% per quarter last year and expect the trend to continue in 2005.
As broadband subscriptions grow, ISPs are differentiating themselves by offering home users new technologies for wireless connectivity or massive amounts of bandwidth. Cable companies offer download speeds up to 10Mb/sec, and DSL providers have increased basic subscriber bandwidth from 768Kb/sec to 1.5Mb/sec and have the technology to continue scaling. WiMax wireless broadband is looming with shared data rates of up to 70Mb/sec that provide access to "off-network" households.
To sense what's coming, look at Asia. Korean broadband customers tap into very high data rate DSL (VDSL) technology for bandwidth in the 20Mb/sec to 30Mb/sec range, and in Japan residents can get a 12Mb/sec Internet pipe for about $21 per month. The U.S. may not be far behind. Verizon recently announced pricing and availability for its FTTP service, available initially in Keller, TX. Verizon will offer bandwidths of 5Mb/sec, 15Mb/sec or 30Mb/sec. Pricing starts at $34.95.
Fast and ubiquitous broadband is a leading indicator of a growing trend. Home networks are starting to resemble small- to medium-sized business (SMB) LANs. Just more than half of all households have multiple PCs sharing broadband networks, printers, scanners, wireless access points and security devices. Pretty soon appliances, thermostats and security systems will have IP addresses and embedded HTTP servers allowing you to access them remotely and letting manufacturers, utilities and service providers upload status information and alerts.
Driver 2: Digital applications
These telecommunications developments will profoundly affect storage. Much as they have in the enterprise world, fast pipes and IP services will generate mountains of content. Even the types of applications used in homes are analogous to those that have pushed corporate storage capacities to new heights:
- Imaging. Who doesn't use a digital camera these days? Each digital image consumes from 50KB to more than 1MB, and retained edited versions mean multiple copies of each file.
- Audio. Apple has sold 10 million iPods to date, spawning a flood of competitors. Each MP3 file consumes approximately 4MB of disk. As personalized music collections are digitized, the demand for disk space will grow.
- Video. There are about 4 million digital video recorders worldwide with disk capacities that store from 40 to 140 hours of video. And 8mm home videos, VHS tapes and DVD movies will soon migrate to centralized storage.
- Documents. Today, important receipts, bills and contracts are printed on paper and sent to us via snail mail. But it won't be long before secure e-mail, document imaging and disk drives replace paper and lighten the mailman's load.
The combination of killer applications, ubiquitous broadband and digitization of content will create massive demand for hundreds of gigabytes or terabytes of storage capacity. Furthermore, as storage capacity requirements increase, simply throwing hard drives at the problem will lead to the same management headaches IT professionals have battled for years.
But before every Tom, Dick and Harry in the storage industry introduces a home NAS, they'll need to understand that the consumer market is a different animal. I see this in the security space where only a few desktop security software companies dominate consumer sales while the commercial market is far more crowded. Like SMBs, consumers need products that feature:
- Ease of everything. Vendors need to design products for users with no technical skills. This means easy installation, documentation, management and security.
- Strong customer support. A home NAS could plug into the network, recognize every file and migrate them to centralized storage--and the help desk phone would still ring off the hook. Call centers and skilled technicians are a necessary cost for long-term success.
- Content management. An easy way to organize and access thousands of digital objects is required. Sorry Bill, but NTFS just won't do here. What's needed is a searchable meta data repository that makes it easy to find anything at any time.
- Security. The home NAS needs to manage access control at an object level and encrypt sensitive data.
- Backup. When critical documents are sitting on a home NAS, there had better be an enterprise-class data protection process in place. Home storage subsystems are likely to be packaged with tape robots and backup software, or sold with a backup service from companies like Arsenal Digital Solutions or Connected (Iron Mountain).
In addition to these technical features, leading vendors will also have to master new sales channels, forecasting, inventory management and distribution on a massive scale. Which companies are likely to jump into or lead this market? Here's an early handicap:
- Apple. Apple's skill in consumer design/branding and its retail channel could be leveraged if it introduced a home NAS.
- Consumer storage hardware experts. Dell, Hewlett-Packard, IBM, Iomega and hard drive manufacturers like Maxtor, Seagate and Western Digital have the design and channel expertise to extend their product lines with a home NAS device.
- Home networking vendors. D-Link, Linksys and Netgear may not be storage experts, but they know networking and have the channel and support locked up.
- Microsoft. The Redmond giant has retail, distribution, support and storage expertise and would love a Windows interface on some honking home storage appliance.
- Hitachi, Matsushita, Samsung, Sony. You can't bet against these guys in consumer electronics.
- Symantec/Veritas. Symantec leads in consumer security software, so it has the shelf space, relationships and support organization to succeed. With Veritas, this could be a powerful combination.
Among the dark horse candidates are:
- Adaptec/Snap. They have the product, but need to build the channel.
- EMC. It doesn't have any of the requisite parts, but it could certainly buy or partner its way into this market. Its recent Dantz acquisition could be the foundation of a consumer backup play.
- ISPs and carriers. An aggressive carrier could make a play for backup services or storage capacity.
- Network Appliance. In the same position as EMC.
- Quantum. Ditto. They have the product, but not the consumer focus.
At Enterprise Strategy Group, we're tracking developments in this market because we're sure it will explode over the next few years. It has to--there's just too much content and bandwidth, and no one wants to manage dozens of hard drives around the house. It will take consumer-focused design, manufacturing and logistics expertise, but some smart vendor will figure this out and walk away with a truckload of money in the process.