Assessing the impact of continuous change on the storage industry - Enterprise Networking

Computer Technology Review, March, 2002

The first part of this article appeared in the January issue (Q4 2001) of Storage Inc., the supplement to Computer Technology Review. The second part appeared in the February issue of CTR. The final part appears here.

On December 6, 2001, executives from Colorado-based data storage companies met at StorageTek's headquarters in Louisville, Colorado. Mark Ferelli, Editor-in-Chief for Computer Technology Review, hosted art illuminating roundtable.

Mark Ferelli: I'd like to make everybody here a futurist. We've established that by 2004, IT spending will be two dollars for every three on mass storage. Are we talking about connectivity, are we talking software, are we talking hardware, are we talking all of the above, and in what kind of mixes?

Juan Rodriguez: It's all of the above. Storage is becoming cheaper, productivity is becoming cheaper, and software never ceases to have problems with it. The issue of managing the whole system becomes much more problematic. I think the issue of management continues to be probably the biggest consumer of that cash, the cost, and management of data storage. The issue of interoperability requiring a lot of manual intervention or human intervention.

Jeff Laughlin: I believe that it certainly is going to be a combination of all of the above. I believe out of that sixty-seven dollars out of a hundred dollar bill, probably half of that is going to be spent on software, and I mean microcode, firmware, and post resident software as well as fabric resident, which happens to run on a processor hidden inside the fabric. Kind of taking an administrator's view of things, because they are the people that have to put up with all the stuff we have propagated onto them. I envision a world where software is helping them with this whole notion of availability. Things are just not going to be allowed to go down for any length of time.

Gary Wright: We have seen that eighty percent of the storage is purchased by twenty percent of the companies in the world, and looking at those larger companies, what we see is the future, a global storage network that offers automated policy-based life-cycle data management. And if you look into that crystal ball I really see four areas where a customer will be spending the money in the IT budget. A lot of it is going to come from the infrastructure so there will continue to be hardware expenses that are spread out over lots of different devices in the connectivity. Second I think is the long-distance networking charges. The third is intelligent software that is going to provide the automated intelligent management. And the fourth area is services, to pull all this together. These are large-scale projects that the typical customer is not going to be able to do in house, and it will require some pretty sophisticated services to make this work.

Michael Harrison: 2004 may seem like it is a long ways away, but it's not. I believe there are shifts in the industry that are happening today that are going to take longer than 2004 to take hold. One of the main ones I think is in the area of storage resource management. And in the majority that is going to be a software charge that customers will need to bear. In the 2004 time frame we will be well on our way to changing the model to be much more heavily weighted on the software side, devoted to the management of storage rather than the hardware.

Steve Lambourne: I don't think people costs are going away any time soon, and I think that a percentage of their budget will go down and be replaced by software and services. I think that we here as well as many, many organizations are looking to outsource stuff that they no longer want to do. They want to get it out of their organization. That's a whole other topic, why would you want to relegate storage management when you say that's so important to you and data is an asset, why would you want to relegate that to somebody else? But that's a whole other issue.

Mark Ferelli: Then the death of storage access providers has been greatly exaggerated.

Robert Sellinger: I think the trend shifts are going to be a little more subtle than dramatic. I think that manpower and labor content is going to continue to grow gradually but I would also include services within that. Software, certainly content is going to go up, and I think the charges from remote bandwidth for data traffic, for the offsite recovery et cetera is probably the biggest delta I would expect in the typical IT budget. In terms of all those things as a percentage, what is going up and what is going down? I think all the devices are going down, all the amounts on disk or tape, I think it is probably true even on things like controller switches, we certainly see it already in terms of things like servers. In general I think all of the hardware components, while the unit volume may increase, cost per component is going to take that overall smaller percentage of the total.

Dick Search: I have to agree with both Robert and Mike, 2004 is tomorrow. Everybody believes that services, resources, and software are going to be a much bigger part. But it won't be substantially that much bigger by the time we get to 2004. That is going to be a longer evolution. Although the cost of hardware is going down, both networking and physical storage demands are still skyrocketing. So it's still going to be a third of the overall spending because where you used to buy a terabyte, now you are going to buy a petabyte. So it's probably going to be a third, a third, and a third. The hardware side of it includes both the network infrastructure plus the storage.