Robert Gray, research director, storage, for IDC, says "People are going to be conservative about what they buy. Productivity projects are going to be at the forefront, including server consolidation and management software."
With so much uncertainty about the economy, "Most companies don't even have 2003 budgets yet," says Ferrol Macon, director of storage technologies for system integrator Solarcom, Norcross, GA. "Most companies are planning out only three - and at the most - six months in advance."
With that caveat in mind, Storage is conducting a comprehensive 2003 Purchasing Intentions Survey. This large-scale survey will be completed in the fall, but we felt that the initial response (gathered in June) was meaningful enough to publish and would be helpful as you go into your summer and fall budget cycles.
So, will storage managers be spending again next year? A qualified "yes" is the early answer from our survey of 210 storage managers, all Storage readers.
The respondents were either storage managers or IT managers who purchase storage products and services. Despite the down economy, few indicated that they will be cutting back (only 11%), with most increasing spending (53%) and more than a third holding the line at 2002 levels (36%).
While Wall Street analysts have fallen in love with storage software companies, storage managers are still devoting a lot of their budgets to hardware. Staff and networking gear each account for slightly more than software. Media is just slightly behind software.
Nor have downtimes brought a big rush to outsourcing, with less than 6% of budgets earmarked for services.
And respondents are buying a lot of disk storage, with 53% expecting to buy more than 10TB next year. And they're buying new technology, with 84% buying networked storage. In fact, half of the respondents were buying more than half of their storage as the network variety.
The network's the thing
The SAN/DAS dichotomy may reflect the scenario that Robbie Bailey, Intel's manager of server hardware, finds himself in: "What we've already deployed is aging and we're at a critical point that we need to acquire new servers or move on to emerging technologies like NAS or SAN."
If IT shops are signaling they want to buy more storage, they are less clear about how big a role price will play in their decisions. Both survey and anecdotal evidence suggests that storage managers are driving very hard bargains. Steve Beatty, a storage architect for a large consumer packaged goods company, typifies the new breed of storage buyer. In the past, his company bought from the same large well-known companies for all of its storage needs.
Today, he's taking bids from a variety of companies before he makes a purchase - even companies he has a relationship with and that are already well ensconced in the data center. "We have all of the major vendors in and sign with whoever offers us what we need at the lowest price," says Beatty. Another buyer sums competition up well: "We might bring in NetApp just to get a better deal with EMC." His attitude, like thousands of others, are contributing to the current price war environment that we see today.
Still, there are limits to playing the price game, says Beatty, who's reticent about looking at unproven vendors. Beatty says he'll only consider vendors with a proven track record. "Until a company can prove to me that it's likely to be around next year I'm not buying. I've dealt with too many orphans in the past."
Respondents tended to downplay price as a factor. For disk arrays, for example, only 32% cited price as their most important criteria, behind "strategic technology vendor for my company" (57%), product characteristics (51%) and technical support and service (33%). Price did rise to 49% as the most important secondary characteristic, behind technical support (56%).
The strong attachment to strategic vendors by some is expressed by Michelle Martin, a storage resource analyst for Acxiom, a customer management provider in Little Rock, AR. She says, "We're pretty set on storage for next year but when we do need new equipment we have the same two or three vendors that we stick with."
That corresponds to our respondents, who averaged 2.6 as the maximum number of disk array vendors they would buy from.
SAN construction is driving switch purchase decisions, as well. While 44% of respondents bought no switches this year, only 30% will buy none next year. Storage managers are mostly buying one to 10 switches (57%) next year, with most (55%) deploying Fibre Channel (FC) fabric as their primary protocol. The second most popular protocol, surprisingly, is iSCSI (15%). Legacy protocols like Fibre Channel-Arbitrated Loop (FC-AL) and FICON are no longer primary protocols among our respondents.
Switches are mainly being purchased to create new SANs, with 62% citing this as their main reason for buying switches. The most common secondary reason was to create redundancy, with capacity expansion close behind. Few people are adding switches to increase performance, possibly a reflection of how few users have saturated their storage networks at this point.
But larger switches are beginning to become big budget items. Just under half of switch dollars (44%) are going for switches with 64 or more ports in 2003, say respondents.
One factor that shows little change is which applications are driving storage growth. In 2002, 54% of respondents say databases consumed the largest percentage of disk storage, followed by file serving (29%) and e-mail (9%). In 2003, the pattern continues, with a modest shift upwards in database primacy over file serving. While a number of startups have talked up the need for specialized storage systems for media serving, only 4.2% of respondents say this will be their largest storage application next year.
Backup: the same, but more
When backing up, most shops will be doing their own. Sixty-eight percent of respondents say their use of online backup services will stay the same, which has generally been low, according to industry analysts. Online backup vendors may take some consolation from the fact that 28% are increasing their use of those services, with only 4% decreasing.
And despite all the bad press tape got in the wake of Sept. 11, 92% of respondents will either increase or maintain their use of tape as a backup medium. Among those decreasing tape usage, more were turning to RAID and other high-reliability disk technologies than disk-based backup.
Our respondents have apparently not read all the press (including some articles in this magazine) predicting that LTO will reach parity with DLT. Either DLT or SuperDLT will be the primary format purchased next year by 43% of respondents, compared to 28% for LTO. AIT was a distant third at 6.5%.
Most users will buy tape drives next year (77%) and many will buy libraries (64%). While most people are buying a small number of libraries (60% for 0ne to 10 libraries), the libraries are fairly large, with 41% buying libraries with more than 20 slots.
Software supplements staff
J. Russell Hudson, a storage manager with SouthTrust Bank, Birmingham, AL, is among those whose company is using storage management tools to leverage its current employees' strengths. "The storage management definitely makes things easier for us. My job is less stressful and more pleasant even though we're not adding any bodies," he says.
While a small percentage of users are mainly motivated by a desire to audit and report on their environments (9%), few are buying software primarily for chargeback (5%) or mainly to optimize storage efficiency and decrease storage growth (1%).
The drive to simplify complex environments is further reflected by the type of storage management software users say they intend to buy. For 44% of respondents, their main purchase will be packages to manage multiple products from multiple vendors, far more than the 18% who are focused on element managers. Almost as many respondents (38%) were primarily interested in packages to integrate into higher level management environments, a clear signal that users want more capable management environments.
That's also signaled by the 51% who said they would select software based on the most comprehensive set of features, far ahead of best of breed products (34%) or price (36%). That's also in contrast to those who will buy management software mainly from their hardware vendors (35%) or storage software vendors (34%).
If 2003 is going to be the year of virtualization, it will catch storage managers by surprise. Only 23% say they will implement a virtualization solution next year, with interest divided fairly evenly among the various approaches. With IT shops solidly behind SAN creation and expansion, and with staffs apparently not growing, storage managers will likely find themselves highly dependent on management software improvements to carry it all off.
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