IBM Takes Big Bite out of Storage Services Market
But it’s warned not to stay too attached to its own hardware. Implementing a SAN architecture is no piece of cake. That's why IBM —which has a huge stake in the service side of the business—has a good shot at dominating the burgeoning storage industry. However, it's important that Big Blue detach itself as much as it can from its platform business in the process, a new report warns.
With the one-two punch of its Shark Enterprise Storage solution, as well as comprehensive services around storage area networks, IBM has renewed its leadership in the storage industry marketplace, according to a new report by IDC (Framingham, Mass.). From a service perspective, IBM has left its competitors in the dust. IBM saw storage services revenues of at least $3.6 billion last year, compared with its nearest runner-up, Hewlett Packard Company (Palo Alto, Calif.), at $1 billion.
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| Top U.S. Storage Services Vendors by Revenue | | Vendor | Revenue ($M) | | IBM | 3,600 | | Hewlett-Packard | 1,000 | | Compaq | 825 | | StorageTek | 719 | | EMC | 350 | | Sun | 150 | | Veritas | 43 | | Other | 14,718 | | Worldwide total | 21,405 | | Source: IDC |
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IBM's solutions and services are ideally suited for growing AS/400 sites as well, relates Roger Schwanhausser, director for storage and SAN services at IBM Global Services. "Shark implementation is proceeding beyond IBM's expectations," he notes. While the AS/400's integrated storage capabilities have typically reduced storage headaches for IT managers, there's been a growing need to be able to share external storage capabilities with other systems within the corporate network. Currently, Shark Enterprise Storage Server will support between 420GB and 11.2TB of RAID-5 storage, according to Schwanhausser.
Likewise, the primary vehicle for seamless, expanded network storage—storage area networks—promises heady capacity gains for large AS/400 sites. Implementation of SAN has been active across all of IBM's platform environments—including AIX/Unix, Windows NT/2000, as well as AS/400 environments, says Schwanhausser. "It will further be increased in coming months when AS/400 gets Fibre Channel attachment," he says. IBM plans to roll out Fibre Channel support on the AS/400 during the second half of 2000.
IBM's range of offerings in the storage space has earned it high marks in the recent IDC report. The availability of both solutions and services "is a combination that serves IBM well in the storage services market," says Doug Chandler, an analyst with IDC and author of the report. "Although IBM has been relatively slow to give its storage services offerings a high profile, it has begun to be more aggressive regarding its SAN services."
Demand for SAN-based storage services is being driven by a number of factors, Chandler relates, including the rise of Web-based and CRM applications, which require "rapid access to large amounts of data," and increased emphasis on 24X7 availability. Plus, he adds, not everyone can set up a SAN. "SAN implementations require a complex combination of skills that are typically in short supply. The advent of SANs has created a new opportunity for providing consulting, implementation and management services pertaining to storage and has raised the visibility of these services overall."
IBM recently announced it is opening 70 Business Partner SAN Solution Centers as part of a $400 million data storage initiative. The centers offer SAN services that include testing, design, education and training. Last December IBM opened a SAN Interoperability Lab in Gaithersburg, Md., which includes about $500 million worth of hardware and software.
IBM's span of SAN offerings range from applications, databases and middleware to consulting, implementation and management services to Shark hardware, says Schwanhausser.
While IBM is in a particularly strong position to expand its storage services business, its strong ties to its own hardware platforms could hold it back, Chandler warns. "SANs will challenge IBM and other providers regarding their ability to manage multivendor implementations, which are a given with SANs," he says. "IBM recently moved its storage product business closer to its server organization, indicating that the company will go to market with solutions that encompass both server and storage technologies."This move would tie IBM's storage services business more closely to the success or failure of its server and storage products business,” he continues. “But vendor-agnostic, multivendor services have never appeared to be a top priority for the firm anyway."
IBM's Schwanhausser is quick to point out that IBM's services "include a wide range of consulting and support for IBM and non-IBM products, both hardware and software. We understand that most client environments have a multitude of vendor products, and our customers have told us that they value a services organization that can provide assistance across their installed environment." He notes that IBM Global Services is currently involved in consulting engagements that manage Sun, HP, Compaq, Dell, Hitachi, STK, EMC, Veritas and Legato systems.
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IBM SAN Page (new window)IBM Enterprise Storage Server Page (new window)