Storage Networking Market Will Deliver 10 Percent CAGR Through 2008

Enterprise Networks & Servers, Sep 2004

The storage networking market will continue to grow during the next several years, with a 5-year compound annual growth rate (CAGR) of about 10 percent through 2008 according to the Yankee Group report, Storage Networking Market Matures While Customer Requirements Change. However there are still challenges.

The report states small and medium enterprises are target markets for new Fibre Channel SAN growth. To penetrate these untapped markets and compete with an increasingly viable iSCSl option, storage networking vendors will need to make Fibre Channel SANs affordable and easy to deploy and maintain.

The economy is improving but enterprises will adhere to high standards for TCO and ROI.

Increased competition will continue to drive down the price per port in the Fibre Channel SAN component market, increasing customer deployments but cutting into overall revenue.

"We expect the storage networking market to grow appreciably in the next several years before it levels off sometime in 2007 or 2008," said Stephanie Balaouras, Enterprise Computing & Networking senior analyst. "Key to this growth is the ability to penetrate into the untapped small and medium enterprise markets. This will require prices for Fibre Channel SAN components to continue to drop and vendors of these components as well as storage and storage management vendors to work together to reduce the complexity of Fibre Channel deployment and management.

"Continued growth into the large enterprise market depends on continued innovation in director features and functionality including multiprotocol support for iSCSI and FCIP to network lower cost servers into the SAN and to connect SAN islands for better manageability. Larger enterprises will begin to look for heterogeneous switch vendor support," says Balaouras.