Cisco Systems has enjoyed rapid expansion in the storage networking market since it entered the field last year. Cisco’s growth illustrates the increasing consolidation of the storage sector around a cluster of big suppliers, with IBM, HP and Sun also among those players set to benefit most…
The arrival and subsequent rapid growth of Cisco is of obvious concern to SAN incumbents McData and Brocade Communications Systems, and it serves as a reminder that the entire storage market is consolidating not only around large suppliers, but also in terms of technology. Undoubtedly, Cisco will at some stage start pushing customers towards IP-based storage networking, and a major plank of its sales pitch will be the benefit of using the same protocol in both data and storage networks.
Elsewhere the convergence of storage with other infrastructure technology has already begun, and the two largest storage-only suppliers, Veritas Software and EMC, have started moving this way. EMC’s commitment to information lifecycle management last year saw it spend around $3 billion buying Legato Systems, Documentum, and VMWare. Although backup software maker Legato is clearly a storage company, the other two purchases took EMC into non-storage territory. Documentum’s business is content management, something only adjacent to the current storage market. VMWare on the other hand is entirely removed from storage, as its specialty is in desktop and server virtualization software. For now, EMC says its ownership of VMWare does not signal a move into converged server and storage management systems. But the argument is tough to swallow given what is happening elsewhere in the market.
In contrast, Veritas is emphatic that its recent spate of acquisitions has been all about the convergence of storage, applications, and server management systems. Last year it bought applications management vendor Precise Software Solutions and server provisioning specialist Jareva Technologies. This year it bought Ejasent, which among other things develops software that moves applications from one server to another. Veritas is using the term utility computing to describe the all-embracing systems it hopes to weave together from the technology strands it now owns. The term also describes similar high-profile plans and developing technologies at IBM, Hewlett-Packard and Sun Microsystems. Interestingly, IBM and HP’s utility systems rely strongly on VMWare technology now owned by EMC.
With their core storage businesses commoditizing and their growth rates and profit margins shrinking, EMC and Veritas had no choice but to attempt to re-invent themselves – EMC as a hardware and ILM software supplier that also owns a very useful utility computing card in the form of VMWare, and Veritas as a full-blooded utility computing supplier. The long-term question for Veritas and EMC is whether they will ever be large enough and have a sufficiently broad portfolio of technologies and services to compete with the likes of IBM, HP or Sun in what they themselves recognize as a converging world. There is a good chance that in the long run they will not be able to face off the competition any more than the SAN incumbents will be able to withstand the pressure from Cisco.