An IDC study paints a darker picture, showing the largest decline in IT spending in 2002 was for storage with an extreme decline of 10.6 percent. IDC predicts zero or minimal recovery for storage in 2003.

SAN vs. NAS

In last year's Survivor's Guide we predicted the battle between NAS and SAN would stalemate as the two markets melded, but the effect was rather that the NAS market started to shrink. It will continue to shrink and not simply due to a depressed market. The commoditization of the SAN market is making some of the bigger NAS vendors jump ship--2002 saw Maxtor exit the NAS market and Quantum sell off the Snap Appliances division. It even saw NAS stalwart Network Appliance begin selling standard SANs.

Many companies are still buying NAS devices. They see a better investment value at least for the short haul, and let's face it, for some companies at this time, all that can be done is get through the short haul. If this rings true for you, keep an eye out for the proliferation of the "NAS Head" devices that simply drop onto your existing SAN network and provide network shares of all types on the Ethernet network with the SAN providing the back-end storage. You are also going to see the storage-density-to-price ratio improvement across the board.

2003 will move by at a clip for SAN vendors as they compete over transport layers, SAN manageability and price. SAN is expanding beyond the largest enterprises as well--smaller companies are starting to enjoy the benefits of a consolidated storage infrastructure. This will diversify the package configurations offered by SAN vendors and give everyone more options.

The SAN market will continue to commoditize, particularly in the largest transport segment--Fibre Channel. This is evident even today with the dropping port costs of Fibre Channel switches. If you are going with a Fibre Channel SAN, be sure the company manufacturing the switch has a game plan for the future--the commoditization of Fibre Channel could put these one-trick pony Fibre Channel companies and you in financial peril.

2003 will offer the first big market chance for an alternate SAN transport, known as iSCSI, which runs over standard Ethernet and IP networks. This new protocol is going to put the squeeze on the expensive and complicated Fibre Channel industry.

Companies with an existing SAN considering installing an iSCSI SAN should be deploying small iSCSI SANs in either a test configuration or in a departmental fashion to become familiar with the technology. This will allow the enterprise to make informed decisions regarding the proper transport to use in SAN upgrades or installations. Additionally, products like TOE (TCP Off-Load Engine) cards and iSCSI specific TOE cards are going to be important aspects of the iSCSI SAN.