NEW YORK--(BUSINESS WIRE)--TheInfoPro, an independent research and advisory company for the IT industry, today released its latest storage study which yields some encouraging news for the industry and indicates which companies stand to emerge strongest from the recession. According to the study, total storage spending among Fortune 1000 customers reports modest growth with 35 percent of organizations expecting to boost appropriations in 2011 and 39 percent anticipating stable spending.
Generally, midsize enterprises (MSEs) are performing slightly better than the Fortune 1000, with only 13 percent of storage budgets facing cuts in 2011, down from 27 percent in 2010. Meanwhile, 26 percent of Fortune 1000 customers are facing budget cuts, a drop of only four percent compared to this year.
EMC seems poised for a strong 2011, especially among the Fortune 1000, with five of its products listed on TheInfoPro’s ‘most exciting product’ list. IBM and Hewlett-Packard (HP) on the other hand, seem somewhat vulnerable, despite their strong brand advantages. Oracle’s woes continue – the tech giant was rated as the second most vulnerable vendor for a second consecutive round of the study.
“The HP and Dell bidding war over 3PAR is dominating the media’s attention right now, and rightfully so,” said Ivan Ruzic, CEO of TheInfoPro. “But the acquisition merely underscores what is shaping out to be a strong year for the industry as a whole as well as for innovative storage vendors like EMC, NetApp and others who have retained customer loyalty through their ability to adapt to the changing landscape and still offer an exciting product.”
In Terms of Priority, ‘Keeping the Lights On’ Tops the List
Overall, there is a strong tone of ‘keeping the lights on’ among enterprises interviewed, which can be expected with the struggling economy. Nevertheless, proven new technologies are being adopted, and the study does provide valuable insight into a few definitive industry-wide trends in terms of technological adoption.
Deduplication for backup data reduction remains dominant, as it is the most commonly cited top initiative among storage professionals. Among vendors, EMC has become the most cited in use for the technology by a wide margin – listed as the vendor of choice twice as often to its nearest competitor – a credit to its Data Domain acquisition.
Online data reduction/deduplication, however, is headed in the opposite direction, with a near 50 percent reduction in terms of long-term planning, with some enterprises dropping it altogether. This should leave a gap in terms of early-adopters and this technology hitting the mainstream.
"It is no surprise that measurable solutions like deduplication and thin provisioning are the hottest initiatives," said Marco Coulter, managing director of the storage practice at TheInfoPro. "From the improved utilization and overall capacity reductions we see in our research, they are clearly delivering on the promise."
Finally, while solid-state disk (SSD) interest remains high, especially among the Fortune 1000, deployments will likely wait until the next refresh.
Capacity Growth, Forecasting and Cost Containment Chief Concerns
Stable budgets are an encouraging sign for an industry desperate for one. Yet, concerns do remain. Anticipated capacity growth is the leading concern among storage professionals as its expansion is driven by database growth and server consolidation. This growth rate trend continues slowly downward across all tiers and is compounded by a lack of proper forecasting and reporting. One storage professional interviewed during the research perhaps put it best, lamenting: “Storage was always the hidden thing in the background that either worked or didn’t. Now everyone asks for reports, even when there’s nothing wrong.”
Cost containment also remains an issue, which is not much of a surprise with the industry feeling the crunch. This ‘keep the lights on’ mentality is the reason enterprises are pushing off further adoption of new technologies until the next refresh/purchase cycle.
EMC, CommVault Shine; IBM and Oracle Decline
On the vendor side, the narrative continues to surround EMC’s rise and the underwhelming performance of IBM and Oracle.
EMC, which is listed as the most exciting company by the Fortune 1000 and the second most by MSEs next to NetApp, still has many customers planning to spend more than $25 million with the company this year. With many customers of other storage companies considering switching to them, EMC’s success is a credit to its high ratings for product quality and reliability. If there is a concern for EMC, it resides in its low value for money and interoperability scores, although these blips have been so far outweighed by the company’s tremendous achievements.
CommVault’s record may be even more impressive than EMC’s, as its growth is all but assured with 33 percent of its customers planning to spend more in 2011 – some over 50 percent more. Overall, the company’s footprint remains small in the industry landscape, with 89 percent of interviewed customers spending less than $100,000. However, CommVault continues to attract new customers with 21 percent of surveyed respondents becoming new CommVault customers in the past year and coupled with above average ratings in many categories, the company is setting a solid foundation for sustained success.
NetApp, long considered by EMC as its biggest rival, is also performing well, earning one of the lowest vulnerability scores. Among storage professionals considering a vendor switch, NetApp is listed as one of the most likely destinations. Not surprising, considering MSEs rank NetApp as the ‘most exciting’ company in the storage industry. With good overall scores across the board in terms of product features and functionality, NetApp is the top company in consideration among storage professionals.
For IBM and Oracle the problem is vulnerability. IBM is seen as highly replaceable (most likely by EMC or HDS) due in part to its low, albeit improving, overall scores in the areas of sales and ease of doing business. With 29 percent of its customers planning to spend less this year than in 2009, IBM has work to do to catch up.
For HP the news isn’t much better: 43 percent of customers plan on spending less money with the company this year, with only 14 percent planning to spend more. HP’s play for 3PAR is a smart strategic move.
Oracle meanwhile is struggling, with 14 percent of its customers selecting ‘no spending’ in 2010. Uncertainty is also a contributing factor to Oracle’s high vulnerability score, with the highest percentage of Oracle customers stating that they ‘may’ switch to an alternative provider. Unlike previous TheInfoPro storage studies, ‘lock-in’ concerns do not seem to be working in Oracle’s favor: 80 percent of its customers say switching providers would be ‘easy’ or only ‘somewhat difficult.’
Storage Acquisitions, the ‘Green’ Movement and Other Trends to Watch
For several quarters, TheInfoPro has been citing 3PAR (PAR) as an acquisition candidate by a server vendor. The recent moves by Dell and HP are not a surprise, as the vendors seek to complete the ‘enterprise stack’ of servers, storage and networking. Also a PAR acquisition brings a Tier 1 storage solution acceptable to F1000s, along with a reputation for innovation as the company that brought thin provisioning to the market.
In terms of actual technology, while ‘green’ initiatives continue to garner media hype, they are not seen as an important priority by storage professionals. Savings in power costs are unlikely to gain importance until they are established as a meaningful way of managing costs.
Backup deduplication’s recent growth also shows no signs of slowing down; with only 46 percent in use there is considerable room for expansion. Customers investing in the technology are expecting measurable results in terms of effective deduplication ratios and scalability to cope with increasing loads.
Finally, as seen in previous TheInfoPro studies, virtualization and the cloud remain top of mind. Fifty-four percent of respondents believe that virtualization is changing roles and responsibilities, and one in four expect the plurality of production to be virtualized by 2012. And, while a mere eight percent of enterprises utilize an external cloud for storage, 31 percent expect that by 2012 over 25 percent of data services will be protected through the cloud.
About TheInfoPro Storage Study
TheInfoPro Storage Study was completed in June 2010 and takes an in-depth look at key trends across the server industry, as well as the performance of individual vendors. The study is completed biannually and was based on hour-long interviews with 278 storage professionals and key decision-makers at large and midsize enterprises in North America. The interview results are collected in comprehensive research reports that provide continuous business intelligence within key areas such as technological road maps, spending plans and vendor performance.
TheInfoPro is a leading advisory and research firm that provides real-world perspectives on the customer and market dynamics of the information technology landscape by using a unique research methodology that harnesses the collective knowledge and insights of leading IT organizations worldwide. Through a combination of expert advice, actionable analysis and our extensive network of IT professionals, TheInfoPro serves as a conduit between IT decision-makers, technology providers and institutional investors. Founded in 2002 by alumni of Gartner, Giga, EMC and Bell Labs, TheInfoPro is headquartered in New York City. To learn more, visit www.theinfopro.com or email email@example.com.