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The big crunch: Capacity grows, budgets shrink

The brief respite storage managers enjoyed from the ever-escalating need for more disk capacity appears to be over. Respondents to our 2008 Purchasing Intentions survey say they'll add an average of 47TB of new disk capacity this year. But they'll have to do it with smaller storage budgets. And while virtualization could help respondents use their storage more efficiently, it's still receiving a cool reception.

Increased capacity demands are the overriding theme of this year's Storage Purchasing Intentions survey.

As if traveling through the eye of a storm, storage managers enjoyed a brief respite from the ever-escalating need for more disk capacity last year. But that serenity was short-lived. As anyone who has weathered a hurricane can attest, the backside of a storm can be even more forbidding than the initial impact.

Last year, Storage magazine's Storage Purchasing Intentions survey revealed a slowdown in the amount of disk storage companies intended to add. At that time, respondents said the average capacity they expected to add was 38TB--hardly small change, but it did represent a slight dip from 2006's 40TB. This year, on average, storage managers expect to add 47TB of new disk capacity (see "Relentless growth of disk capacity" below).

Not all companies will add so much capacity, but most will have to increase disk space to their existing infrastructure. "We estimate somewhere around 35TB," says Jean Kocur, information systems director at Pittsburgh-based MSA Associates. Although a bit smaller than the average capacity growth, MSA's new 35TB is on top of the 38TB the company added last year to a total installed capacity of more than 350TB.

At Manulife Financial in Toronto, management sees a trend that will require an additional 15TB of disk in 2008, but Jean Veronneau, director of storage, thinks the estimate is conservative. "I'm predicting 40TB," he says. Manulife Financial is in the ending stages of a storage technology refresh initiated last year that brought its installed capacity up to approximately 250TB. "Everything is going to grow," says Veronneau. "What might happen is we'll add a lot more NAS into the environment."

The University of Oklahoma in Norman has a mix of Hitachi Data Systems and EMC Corp. storage. With nearly 200TB of disk already installed, the university still needs more capacity. "We just bought an AMS1000 [Hitachi Adaptable Modular Storage] two weeks ago, and we'll probably get another 1000 for the North campus," says Fred Keller, IT director of enterprise storage and backup for the university's three campuses.

Click here for a chart of the
relentless growth of disk capacity (PDF).

Ripple effects of capacity growth
Despite the continuing decrease in the price of disk subsystems, expenditures for those systems are still the biggest chunk of storage budgets--41% in this most recent survey and consistent with the past four years. Disk might be cheaper these days, but companies need more and more of it.

Having to commit such a large portion of their available funds to disk means other initiatives will have to be shelved or delayed. Storage managers are seriously considering newer technologies, such as data deduplication and change management applications that lessen the need for buying more disk.

"I also want to start looking into deduping, at least on the file-share side of the house," says Kocur. "I don't like the fact that we're growing data so rapidly. I think there's a lot of wasted space out there."

Besides becoming a potential gateway to newer technologies, the capacity boom is a key reason why some companies will be opening the doors of new or refurbished data centers. Forty percent of our respondents will either build or renovate data centers this year and, of those, 70% say the need for more capacity is the main motivation behind those efforts.

Show me the money
As a group, respondents report an average storage budget of $3.2 million, a slight drop from last fall. However, approximately half of those surveyed say their budgets were less than $1 million (see "How 2008 storage budgets break down," below). On average, 2008 budgets will rise by approximately 2.9% vs. 2007--but that's down from last year's 5%.

Caught between higher capacity requirements and lower budgets, storage managers have altered their buying plans. For example, 46% of those planning to buy arrays are considering midrange systems over higher end arrays, the highest percentage we've seen in four years. It may be that buyers are willing to accept somewhat lower performance and eschew some features found only on higher end storage arrays.

A more telling statistic is the overall picture of disk storage expenditures. On average, nearly 40% of storage managers' disk budgets will be used to buy disks to be installed in existing storage arrays. This far outdistances the 24% allotted for new Fibre Channel (FC) arrays, and continues a trend that began last spring (see "Where disk dollars are going," (PDF) below).

"Based on our size, I don't see us having to add another storage array," says Ed Sitz, IT manager in the Kansas City offices of Med James Inc. "If anything, we'll just add storage capacity to it. We have slots available in both of our enclosures for Fibre and SATA drives."

Click here for a chart of
Where disk dollars are going (PDF).

iSCSI's allure
For years, analysts and storage publications have mused over when the "Year of iSCSI" would occur. To date, there's yet to be a watershed year to mark its arrival; rather, iSCSI's progression has been a gradual climb. We won't go out on a limb and declare that 2008 will be iSCSI's year, but there are a number of signs that indicate accelerating interest.

Twenty-seven percent of respondents have iSCSI storage in their shops, and 40% either have or will deploy it in 2008. In smaller (and ostensibly more cash-strapped firms) the pickup in interest is even greater: 46% of small companies will deploy iSCSI this year vs. 37% a year ago, while 43% of midsized companies plan to go the iSCSI route vs. last spring's 28%.

Med James installed its first SAN last year and opted for iSCSI. The firm's EMC Clariion has a mix of FC and SATA disks totaling approximately 5TB. Cost and ease of deployment compared to an FC array were two key factors that led Med James to select an iSCSI array. "We don't use Fibre switches or HBAs [host bus adapters]--it's all iSCSI," says Sitz.

There's a lot to like about iSCSI, not the least of which is its relative low cost. Twenty-eight percent of those surveyed say their top reason for considering iSCSI is its cheaper price over FC storage. Not far behind was the need for low-cost capacity (21%).

But price isn't the only reason why a growing number of companies are looking at iSCSI systems. Some concerns about iSCSI--its performance, reliability and security--have eroded over the last few years. Only 15% of our respondents feel that iSCSI's performance would be inadequate, and 14% expressed uneasiness about its reliability. Security appears to have become a nonissue with slightly more than 2% citing iSCSI's safety as a reason for not deploying it in 2008.

iSCSI is being used more frequently to host critical applications. Forty-two percent of respondents would use iSCSI storage for their mission-critical apps, a considerable jump from the 32% who said the same on last fall's survey. Email is, arguably, a mission-critical app for most companies, and 43% of those surveyed use iSCSI storage for that important application.

More disk, more backup pain
Regardless of how companies deal with their increasing capacity needs, they all have one thing in common: they'll have to expand or alter their backup systems to protect additional data. For the most part, companies are looking to disk systems to ease that backup pain.

Twenty-nine percent of respondents plan to increase their spending for tape backup systems, the lowest figure in the six years we've conducted the survey. Twenty-eight percent will decrease spending on tape vs. last year, which is also a record for our surveys (see "Tape buying dips," below). We've also seen a steady decline in the average number of slots users expect to implement in the tape libraries they'll buy, although that figure (130 slots) is essentially the same as last spring's.

Click here for a chart of
tape buying trends (PDF).

But don't assume tape is out of the picture. "Later this year, I'm going to implement a petabyte storage system for the South campus," says Keller at the University of Oklahoma. "That'll be primarily tape, but with some disk up front." Keller's system will likely include up to 10 LTO-4 drives. LTO-4 offers high capacity and built-in encryption, but its adoption has been less than rapid. Still, 23% of respondents are planning LTO-4 implementations this year vs. last fall's 13%, making it clear that the technology's adoption is picking up steam.

Some storage managers are looking at other ways to grapple with backup issues. Deduplication figures prominently in plans, whether it's actual implementations or just some serious evaluation. Keller says the university hasn't implemented any kind of deduplication yet, but notes "it's sorely needed here."

"I think we need to do a better job with data deduplication and moving some of our file shares over to lower cost storage," says Med James' Sitz, anticipating a future crunch. But for now his situation is well under control. "I've looked at a few of the deduplication apps, but I think they're probably beyond what we need," he adds.

With dedupe being integrated into more and more virtual tape libraries (VTLs), it's now taken far more seriously as a sound method to remedy stressed-out backup systems. Twenty-four percent of our respondents will implement (or have already implemented) dedupe technology in 2008, which is up from last fall's 17%. And another 42% have begun to evaluate dedupe or plan to do so this year (see "On storage managers' radar for 2008," below). Underscoring dedupe's ascendancy, Data Domain Inc.--a company that makes deduplication appliances--rose to fifth place on our survey's "Main vendor for disk-to-disk backup" list, overtaking such stalwarts as Sun Microsystems Inc. and NetApp. And 44% of respondents will increase dedupe spending this year vs. 31% a year ago.

Click here for what's on storage
managers' radar for 2008 (PDF).

Manulife Financial's Veronneau is also keen on dedupe. "Between now and the end of the year, we're looking at the possibility of doing deduplication," he says. Veronneau says the very nature of his business makes dedupe a viable option. "An insurance company, investment company--think of how many documents we have and how many copies of those we probably have."

Kocur at MSA Associates sees data classification as a crucial step in helping to trim what's on her shop's systems to ease their backup process. "In order to be able to cut, you got to know what you've got," she says. Kocur says she'll need to enlist the content management groups at MSA. "I really need them to take ownership and clean up their stuff."

Over the past few surveys, VTL technology seemed to fall from favor, with the number of planned implementations decreasing each year. But this time around, it's apparent that interest in VTL has been renewed. Thirty-one percent are using a VTL, up from 23% last fall. And 32% say they've deployed a VTL--or plan to--this year (vs. 28% last fall).

Veronneau is also about to implement a VTL, which he hopes will not only ease backup window woes, but reduce Manulife Financial's tape inventories. "With 200TB of data on the midrange [arrays], I have 1.4PB of data on tapes."

Can virtualization help?
Storage virtualization makes it possible to use storage more efficiently and to balance previously uneven workloads among disparate arrays. While it sounds like a perfect technology to address the kinds of capacity issues our survey has revealed, it's still far from attaining mainstream acceptance.

The reasons for the cool reception to storage virtualization have been well documented: it's costly, can be difficult and time-consuming to implement, and is tough to back out of if desired. While virtualization has certainly made inroads, survey responses largely reflect the difficulties associated with it, as 48% indicated that they haven't virtualized any of their storage. Those who have taken the virtualization plunge appear to be proceeding cautiously, with approximately 20% virtualizing some of their block or file storage. Still, among those who haven't virtualized, 67% have no planned storage virtualization purchases for 2008.

While he could add virtualization via his installed Hitachi Universal Storage Platform (USP) array, Keller at the University of Oklahoma still isn't convinced. "To do virtualization, I've got to give up some of my FED [front-end director] ports," he says. "I don't want to give up those resources."

With a droopy economy and lots of new capacity needs, storage managers will be watching every penny, trying to get past 2008 relatively unscathed. That explains the heightened interest in iSCSI, dedupe, VTLs and a handful of other newer technologies. It won't be an easy year, but it will be an interesting one.

About the survey: Storage magazine's Purchasing Intentions survey is conducted twice a year (in the spring and in the fall). This is the sixth year we have conducted the survey. Storage subscribers are contacted by email and invited to participate in the survey. For the current survey, there were a total of 763 respondents. They're asked if they have purchasing authority in four areas: disk subsystems (551 respondents), storage networking (442), backup and disaster recovery (419), and storage management (348). Thanks to everyone who participated in the survey.

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