Storage Area Networks Market Trends (Archived Report)


Storage Area Networks Market Trends (Archived Report)










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Archived Report
Storage Area Networks
Market Trends

by Lynn
Greiner

Copyright 2017, Faulkner Information Services. All Rights Reserved.

Docid: 00017735

Publication Date: 1712

Report Type: MARKET

Preview

Networked storage surpassed
direct-attached storage in
corporations as the medium of choice, and storage area networks (SANs)
comprise the lion’s share of that market. Thanks to evolving
technology and dropping prices, SANs now penetrate areas in
which they were just a dream a few years ago. However, with the advent of Big
Data and the cloud, on premises SANs have become less attractive to many companies
and hyperscale providers are leaning more towards what is known as Server SANs.

Report Contents:

Executive Summary

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The standalone SAN market is shrinking after a period of growth driven by the
storage needs from government regulations like Sarbanes-Oxley that require
significantly longer data retention cycles. The explosion of cloud services in
need of vast amounts of quickly scalable storage is leading to the advent of
Server SANs – Collections of direct-attached storage
(DAS) that become a virtual SAN through software – as well as
hyperscale architectures. In fact, the external storage market shrank by 7.8
percent year over year.


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The first quarter of 2003 witnessed
the first time that networked storage had a bigger piece of the storage
market than did direct-attached storage
systems, and the number of terabytes continues to expand.
Companies discovered that they needed more flexibility for their
ever-growing
storage farms, and that they could also cut costs by reducing the
number of servers in
their organizations.

Today, growth forecasts are based on the
business requirement for easy access to data residing in disparate storage
systems.
Many of today’s sales are still being made to large corporate enterprises to
support Fibre Channel SAN
deployments, but mixed SANs containing both Fibre Channel and IP-based
products
now appear as well. The industry has made concerted and
successful efforts to eliminate incompatibility between SAN products from different
vendors . The development of
simpler, low-end SANs and IP-based SANs, rather than Fibre Channel
interconnection,
have led to an increase in the appeal of SANs to these businesses, as has
the
entry of vendors like Dell EMC, who offer as close to plug-and-play as is
currently
possible.

Companies today, however, are faced with difficult choices: Should they
continue to install storage in-house, or should they move to some form of the
cloud. Many are choosing the latter, impacting sales of storage in the data
center.

Market
Dynamics

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Data, it is said, expands to fill the space
available. That is especially true in today’s regulated world, where
records
must be maintained and available for prescribed periods. Corporations are
constantly struggling to maintain sufficient, suitable storage to meet
these
demands.

Storage area networks (SANs) stepped in
to
take up the slack when it became obvious that server-based storage was
unable
to keep up. Despite technical challenges, from interoperability problems
to
issues trying to back up huge amounts of data in minuscule backup windows,
the
SAN market has been steadily growing in large corporations. In fact,
as analysts
predicted, in the U.S. market for external disks,  SANs exceeded
direct-attach storage (DAS) and network-attached storage (NAS) combined
in 2007. 

However, smaller enterprises were not
able
to afford the costly infrastructure required. Fibre channel in particular
has
proven too expensive and too complex for them to deploy. The advent of
IP-based SANs and less expensive Serial ATA (SATA) disks have put
the
SAN within reach for SMEs. At the same time, inexpensive cloud storage is
drawing SMEs away from their own data centers and towards purchasing IT as a
service.

Meanwhile, the industry has been addressing
its
interoperability woes, making it easier to deploy and manage SANs of all
sizes
and shapes. Chief among the drivers is the Storage Networking Industry
Association (SNIA), which has pushed for standards to help SANs become as
ubiquitous,
and its components as interoperable as the Ethernet network components on
the
LANs and WANs that host them.

Traditional SAN demand has been weaker for the past few years, however. The move to the
cloud caused a 3.9 percent decline in fibre channel in the second quarter of 2015,
and the external storage market fell by 7.8 percent year over year in Q2 2017,
although it recovered in Q3, with factory revenue growing by 4.1 percent to $5.6
billion.
All flash arrays represented 28 percent of external storage
sales in Q3.

The decline
in SANs was precipitated by the increasing move to software defined data
centers, and the user preference for converged infrastructure,
which led to almost one quarter of overall storage sales going to hyperscale
datacenter customers. As demand pushes
cloud vendors to hyperscale infrastructure, they are leaning more towards server
SANs that use DAS and commodity white boxes rather than branded products.

Market Leaders

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SAN Systems and Storage

Vendors that sell both computers and storage media, like IBM,
Dell EMC, Cisco, and
HPE, continue to
dominate as providers of complete SAN installations for enterprise networks
and large e-businesses.
These vendors offer the hardware, software, and planning skills needed to
integrate diverse computing and storage devices into redesigned networks
where storage is logically centralized into a SAN.

Other entrants have made an impression on the SAN hardware
and
systems market, most notably Hitachi Data Systems (now known
as Hitachi Vantara), NetApp,
and Fujitsu. Hitachi Vantara, in particular, has
been vying to take market share away from
Dell EMC by providing scalable and lower-cost
enterprise storage systems. NetApp
is focusing on an appliance model with its Fibre Channel and iSCSI offerings.

The market is experiencing
a shakeup, since the acquisition of EMC by Dell
in
September 2016. HP’s split on November 1, 2015, into two
companies, one focusing on enterprise products (Hewlett Packard Enterprise, aka
HPE), and another absorbing personal systems, including workstations, and
printers (HP Inc), also affects the landscape,
as does Hitachi Data Systems’ consolidation of its data-driven products into
Hitachi Vantara.

Dell EMC. Dell
EMC is the market leader for networked
storage hardware and software management while also ranking first in overall
storage revenue and first in external storage. The company focuses
heavily on providing complete SAN offerings; Dell and EMC
offerings have been rationalized into a single portfolio.
For smaller enterprises, Dell EMC offers a less expensive SAN based on its
Clariion
AX4 with Serial ATA (SATA) disks. Its Documentum
division, which enabled it to offer a storage-aware content management platform,
was sold to OpenText.

IBM.
 IBM is tied with Hitachi Vantara for fourth in the overall storage market, is
fourth
in
external storage, and offers a
broad range of SAN offerings behind its TotalStorage and System Storage banners, including
hardware, software, as well as consulting, implementation, and management
services. 

Fujitsu. Offers its Eternus family of hardware and software.

Hitachi Vantara.
Hitachi Vantara has emerged as a solid presence in the
SAN systems market over the last several years, and is currently tied with
IBM in overall external storage revenue.
It
began with the now retired
Adaptable Modular Storage (AMS) series of storage
systems and now offers both all-flash and hybrid solutions. 

Hewlett Packard
Enterprise.

HPE is first
in overall storage revenue market share. It is in third place
in total external storage. It also provides SAN management software, switches,
hubs,
and bridges, and also provides the services necessary to implement
SANs. Its current offerings carry the Converged Storage monicker and run
from 3PAR SANs to HPE’s file appliances.

A core group of vendors have positioned themselves to target small and
medium-sized storage implementations. These vendors typically market
their products as easier to implement and quicker to install.
Some have lost some market share recently, as the industry leaders have
added entry and mid-range
offerings to their arsenal.

Oracle. Oracle has been shifting focus to
the cloud, but still provides the FS1
flash storage system engineered for Oracle databases on enterprise SANs. Oracle
is also known for offering a Professional Services option to consult on storage
system design and deployment.

Fibre Channel Switches &
SAN Interconnection

In
SANs with Fibre Channel interconnection, Fibre Channel switches are the
key pieces of hardware that provide flexible configuration of storage
and computing resources. Two vendors dominated this arena: Brocade and
McData. Since their merger, completed in Brocade’s 2007 fiscal first
quarter, the company reported mixed results, first losing share, then
recouping it. Its products are used by computer and storage vendors who
provide SAN services and network deployment, and by companies brave
enough to design and install their own SANs. Brocade has
now been acquired by rival Broadcom, though still
operates under its own name.

In
addition to Fibre Channel Switches, SANs require host bus adapters
(HBAs) to connect computers that use SAN storage resources. Storage
units within SANs that use SCSI buses require converters to allow
connection to Fibre Channel-based SANs. Other interconnection needs are
met by vendors that provide interfaces between Fibre Channel SANs and
IP networks, wide area networks, and metropolitan area networks.
Gen 6 16GBps
and 32GBps HBAs now
are shipping, and being tested for
connectivity to the new NVMe drives.

Converged Network Adapters (CNA), which combine the functions of an HBA and
NIC, are offered by major vendors including Brocade, Broadcom,  QLogic, HPE, Dell
EMC and Cisco.

Fibre Channel over Ethernet (FCoE), the convergence of
storage networking on Ethernet networks, was
expected to have a transitory year in 2009 as
vendors found their feet, with growth beginning
in 2010, but it was held back by the economy
and interoperability issues. It achieved over 20 percent shipment growth in Q1
2013, but was mostly limited to connectivity between servers and
top-of-rack switches, and its growth has stalled.

Now NVMe (Non-Volatile Memory express) over fibre channel,
which, according to vendors, offers 55 percent lower latency compared to SCSI
and a 28 percent performance advantage over Ethernet, is on the rise. NVMe and
standard fibre channel are supported on the same fabric, eliminating the need to
rip and replace to take advantage of it. The Fibre Channel Industry Association
(FCIA) is sponsoring milti-vendor plugfests focused on the technology, and the
FC-NVMe INCITS T11 standard is now complete.

Worldwide Fibre
Channel SAN switch revenue totaled almost $2 billion in 2007. The combined
market for Fibre Channel switches and HBAs was expected to hit $2.8 billion in 2016,
with 16 GBps FC switch revenue expected to enjoy 46 percent CAGR from 2013 –
2017. However, accelerated adoption of cloud, virtualization, and software
defined networking have changed hardware preferences,
and revenue in Q1 2015 was only $595 million.
The global fibre channel SAN software and adapter market was down 6 percent in
2016, compared to 2015. However, FCIA reports that 80 – 90 percent of all-flash
arrays are connected with Firbre Channel, providing reason for optimism.

Market
leading Fibre Channel switch vendors include:

  • Brocade – Since its merger with McData, Brocade’s share first slipped, then
    recovered to absorb over two-thirds of the market. Brocade currently
    offers Fibre Channel switches, directors, fabric extension and routing,
    and supplies the accompanying software to manage them. Additional
    software is available to enhance performance in specific areas such as
    performance monitoring, availability, migration support, and
    security/access control. Brocade and McData product lines have been
    fully rationalized under the Brocade name. In January 2014, Brocade entered into
    a technology alliance with QLogic. In Novenmer 2017, it
    was acquired by Broadcom, and now operates as an indirect subsidiary.
  • Cisco Systems – Cisco now dominates the market for large
    storage switches. Its MDS 9000 series primarily targets the large enterprise. It
    also offers iSCSI solutions.
  • Juniper Networks – entered the market with
    its QFabric switches, which flatten the network to a single tier, a strategy
    also adopted by HPE for its 3PAR SANs.

The Fibre Channel host bus adapter market is
dominated strictly by two
players, although other players such as Brocade are now threatening their
dominance. 

  • Broadcom –
    Emulex, now absorbed into Broadcom Ltd.
    and absent as a separate brand, makes Fibre Channel host bus adapters, hubs, ASICs, and
    software products. In June 2004, Emulex it settled patent litigation with
    QLogic, resulting in QLogic licensing several technologies from Emulex.
    In April 2009, Emulex attempted to acquire Broadcom, but it dropped
    the offer in July. Broadcom then sued Emulex for infringement
    of ten of its patents, including ones covering Fibre Channel and
    FCoE technology; the companies reached a partial settlement in July, 2012. In
    May, 2015, Emulex was acquired by Avago Technologies (which earlier acquired
    Broadcom). Avago then renamed itself Broadcom Limited,
    and Emulex has been absorbed into its enterprise
    storage segment.
  • QLogic
    – QLogic produces SAN switches and host bus adapters for both Fibre Channel
    (including FCoE)
    and iSCSI, as well as SAN management software. It is the market leader for the
    tenth consecutive year, with over half the market, and is a growing
    force in the blade switch marketplace. In February 2012 it sold its InfiniBand
    assets to Intel. In January 2014, it entered into a technology alliance with
    Brocade. The first product resulting from the partnership was released in
    October 2014. In September 2015, QLogic, Brocade, and HPE released HPE Smart SAN
    for 3PAR StoreServ, a management tool to streamline and automate configuration,
    troubleshooting, and testing of the SAN environment from a single console. It
    uses QLogic’s Gen 5 FC firmware, and advanced diagnostics from Brocade.
    In August 2016, QLogic was acquired by semiconductor vendor Cavium, and now
    operates as a fully-owned subsidiary. It produces OEM branded products for
    Cisco, Dell EMC, Fujitsu, Hitachi Vantara, HPE, Huawei, IBM, Lenovo, NetApp, and
    Oracle.

SAN Storage Management Software
Companies

Management
software is an essential component of a SAN operation that performs
access, backup, recovery, and restoration
functions. By administering the SAN environment, management software
makes it possible to consolidate control of enterprise storage
resources and cut support costs. The market continues to see SAN switch
and hardware players purchasing small software companies to help gain a
foothold. All of the major players offer a line of SAN management
software as a part of their overall storage
framework.

SAN
software vendors also provide backup and recovery capabilities and
software for pooling, allocation, and reallocation of SAN storage
resources. The market is
led by Dell EMC, Veritas (now spun off from Symantec), and IBM, but many other players exist in this
space; Veeam and CommVault have experienced the largest year over year growth.
These various vendors include:

  • FalconStor Software – FalconStor’s Network Storage Server
    (NSS) family of software products
    were developed to create an open architecture across
    heterogeneous environments.
    Its iSCSI Storage Server provides storage management over existing IP
    networks. Its new FreeStor converged solution spans physical and virtual
    environments.
  • DataCore Software – DataCore develops SANsymphony
    software
    for
    network storage pooling. The latest release, containing performance and
    scalability enhancements, shipped in October 2017.
    The company has now
    released a Hyper-converged Virtual SAN and a Server SAN offering.

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The market for SANs was traditionally defined
by its pioneer, StorageTek. Unfortunately, StorageTek
had difficulty generating the revenue
needed
to keep pace with emerging SAN giants such as HP, EMC, and IBM, and
ultimately
was acquired in 2005 by Sun Microsystems. Sun adopted the
StorageTek brand name for its SAN products. In 2010, Sun was in turn
acquired by Oracle.

Despite
continued, albeit slow, growth in the market, a large number of potential customers
remain wary of embarking on a SAN project. Much of the blame
lies in customer hesitancy to purchase
high-priced Fibre Channel SANs, given the lower-cost cloud
and hyperconverged options hitting the market.
The SMB market, especially, must be able to purchase cost-effective SANs and
SAN components, as well as have the capability to link different backup
and storage systems together on the SAN.
Until recently, SANs have been largely reserved for large corporate
enterprises with the financial backing to make the large IT
expenditures (equipment, implementation, training, software,
maintenance) that
are required to implement SANs. The growth of cloud services has revitalized the
provider market, and initially offered hope for the larger implementation's future,
however the need for rapid scalability has driven providers to implement server
SANs on commodity hardware.

As a result of corporate caution, vendors
continue to introduce SAN products that are geared toward delivering lower costs
and shorter implementation times. The approach has met with success, as Hitachi
Vantara,
NetApp, and Dell EMC have edged into the ranks of the market leaders. These successes,
along with the growth of smaller firms like FalconStor, spurred the
industry leaders to pursue more open standards. IP SANs rapidly moved up
the food chain; the iSCSI SAN sector grew 5.9 percent in the second quarter of 2012 over the same quarter of
2011, largely thanks to Dell; its growth, like that of the rest of the market,
reversed in 2013 and has remained relatively flat. However, they still only represent a small
fraction of the
market.

Still, the price of Fibre Channel SANs is still
falling, and is predicted to continue to fall significantly over the next 3 – 4
years. However, some revenue growth is still expected, driven by higher volumes
thanks to the lower prices. Some analysts had suggested that by 2007, IP SANs
would dominate the market, however, this has still not occurred due in part to
continued strength of Fibre Channel. However Fibre Channel Over Ethernet (FCoE),
once up and coming, has slowed to a crawl.

Another technology expected to help bridge the movement of SANs into SMBs is
Serial ATA (SATA). This inexpensive disk technology, although not as
high-performance as SCSI, still offers up to 3 GB/second throughput at a
fraction of the cost of SCSI; SATA version 3.0, approved in May 2009, provides 6
GBps throughput. EMC’s Clariion AX4 was an indication
of what was to come in this
realm. In August 2011, the development of a new technology, SATA Express,
was announced. It combines the SATA software infrastructure with the PCI Express
(PCIe) interface, and was originally expected to provide 8 – 16 GB/s throughput,
though current reality appears to be 1 or 2 GB/s. It is
currently aimed at the SSD user. The Serial ATA International Organization
(SATA-IO) ratified the SATA Express standard in August 2013.
SATA 3.3, released in February 2016, provides twenty-five percent more capacity
thanks to Shingled Magnetic Recording (SMR) technology.

Management
is another challenge. The Storage Networking Industry Association
(SNIA), the leading standards body and consortium of vendors dedicated
to creating open SANs, released
the Storage Management Initiative Specification (SMI-S) in April 2003
(version 1.7 is the most recent release) to
accelerate the delivery of interoperability and improve the
manageability of storage
networks, and has since performed conformance testing on over 600
products from 29 vendors. Scoping has already begun on version 2.0. SMI-S
1.3 is
an ISO/IEC standard, and in 2011 also became an ANSI standard, INCITS
388-2011. SMI-S 1.5 became an ISO/IEC standard in 2014; the current published
version of SMI-S is v1.7.0. The
SNIA Swordfish v1.0 storage management spec was completed in September 2016. It
extends the DMTF Redfish API to handle management of storage equipment and
services. It provides a unified approach for management of servers and storage
in a hyperscale and cloud environment.

Strategic
Planning Implications

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The key consideration is whether a SAN is appropriate at all, or whether some
form of cloud storage or hyperconverged system is more cost-effective and efficient. This decision has to
be driven by compliance and security considerations as well as by budgetary
needs. Increasingly, companies are moving to converged infrastructures and the
cloud to meet their requirements. However, for come companies, a data center and
a SAN are not only appropriate, but necessary.

SAN technology is not necessarily plug-and-play
(although it has improved immensely over the years), and IT
managers who purchase SAN

equipment from a variety of vendors may find that hardware and software

incompatibilities can be difficult to resolve. Most IT managers seeking a
SAN

package buy from a single vendor or integrator who can supply the

combination of hardware, software, and services needed to rapidly deploy a
SAN

into their networks.

Most existing enterprise networks include
servers, hubs, switches, disk storage, tapes, and software from several vendors.
SAN configurations currently being offered are often designed for use only with
specific types of networks or systems, however, and may be difficult to configure
when a company uses a variety of different computing resources. For
example, software shipped with SAN hardware has traditionally been
restricted to enabling management of a single vendor’s storage
components, although this is changing as vendors realize that it is
not a homogeneous world.

To set up a SAN, the architecture of an
existing network may have to be

completely reconstructed, but the explosive growth of server
virtualization has made the benefits of SANs even more compelling. SAN

consulting, implementation, and management services have become

increasingly important since SAN deployment requires skills that

remain in short supply. Several vendors, including Juniper and HPE, are
attempting to simplify the process with single tier fabrics.

As SAN technology continued to evolve, Fibre
Channel backup software

became available, making possible SAN backup services that are independent

of LAN operation. Also available are SAN

backup services that utilize specialized processors embedded in Fibre
Channel

equipment, thus eliminating the use of enterprise network servers for

storage backup, and providing server-free operation.

Implementations of SANs that enable servers
running on different operating systems to share tape storage resources are now
available. Lack of interoperability between different equipment and systems,
however, remains an obstacle to the wider adoption of SAN technology. Several
vendor alliances have been established, and numerous open testing events
("plugfests") continue to be held to bring
vendors closer together. While there is much talk of providing interoperability
between equipment and software from different SAN vendors, there had
been considerable advantage for some larger SAN vendors to defer the development
of standards, while taking advantage of their relative monopoly in their ability
to deploy SAN systems. However, with the trend towards
open systems, that attitude is punished by the market.

Large vendors tended to be slow to adopt storage
virtualization products because the concept of storage virtualization is to have
many different brands and types of storage systems managed and administered as
if it were a single pool of data. Storage giants like IBM and EMC resisted this
for years, concerned that storage virtualization would diminish the presence of
their proprietary-based systems (they have since
seen the
light). As a result, smaller organizations like FalconStor increased share by launching products that are hardware agnostic.

Also, improvements in IP-based SANs are enticing many small and
medium-sized businesses (SMBs) to invest in SAN technology instead of
continuing to purchase direct-attached storage systems. In comparison
to IP-based SANs, Fibre Channel penetration in the SMB market will
likely be handicapped by its higher price and relative complexity,
although vendors are attempting to
compensate with “plug and play” offerings such as Hitachi’s IP-based
SANs, which are powered by the Internet-pervasive and inexpensive
Ethernet technology,
and HPE’s Simple SAN. Expect iSCSI to be at the head of the class in non-Fibre Channel
traditional SAN implementations.

Bear in mind, however, that server SANs, with their inexpensive commodity
hardware and rapid scalability, are poised for growth in environments needing
massive amounts of storage, and will inevitably move into budget-conscious SMBs
as well. The cloud is also a major threat, since it is
infinitely expandable without capital expenditure.

Until
recently, SANs have been the province of large corporate enterprises;
IP is the key to bringing traditional SANs to the mid-range and smaller businesses.
IP-based SAN
products are mature, and are offered by almost all major vendors. But do not
count Fibre Channel out of the SAN market; if prices continue to fall as
predicted, it could continue to achieve more penetration. In cloud-based providers needing large
amounts of robust, scalable storage, however, server SANs have the advantage.

The SAN of tomorrow may not be the hardware behemoth of today, but rather a
virtual construct composed of direct-attached storage on commodity hardware.

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About the
Author

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Lynn Greiner is Vice President,
Technical Services for a division of a
multi-national corporation, and also an award-winning computer industry
journalist. She is a regular contributing author to Faulkner Information
Services.

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