Onwards and Upwards

After a year of recovery in 2010, the Indian storage market began to pick up steam and high single digit growth is expected in 2012 with trends including the ongoing move from DAS to networked storage by SMBs, increased adoption of storage virtualization, growing uptake of disk-based backup, the emergence of Cloud storage and the dawn of Big Data. By Prashant L Rao

The Indian External Storage market is expected to grow by about 9% in 2012, up $30 mn from its 2011 figure of $328 mn. This year is expected to see the growing adoption of storage virtualization and the emergence of more Cloud Service Providers who will, among other things, offer Cloud Storage. The impact of the Thai floods that saw hard drive manufacturing plants in the region being shut down had its impact in 2011 and continues to have an impact this year although a diminishing one. At the same time, there were positive indicators with the SMB market starting to move from DAS to NAS or IP-SAN and feature-rich solutions being made available to this sector.

“Because of the Thai floods and the consequent shortage of drives, costs went up. Despite that, we grew well. Overall, the market would have grown by 10-11%. We are looking for positive growth this year as well. The market is moving from DAS to SAN/NAS. Virtualization solutions are being adopted. The Indian market is moving from being price conscious to performance conscious,” commented Sridharan Mani, CEO, American MegaTrends India.

“In the ultra high performance/resilience space there was a big migration to generic hardware based on Supermicro platforms. We also offered high availability storage solutions based on software from Nexenta. In terms of nearline storage, an increase in the capacity of SATA drives and reduction in the cost of the same resulted in a huge uptake. A lot of people who were using tape are moving to disk for backup. We saw a 50% YoY increase in storage sales,” said Manoj Nayee, MD, Boston Ltd.

“The second half of 2011 was particularly strong. Spending on high-end systems in the economic recovery period is coming to an end. The mid range, $50,000-200,000, was the biggest area of growth last year. The trend of modular systems with enterprise level functionality continues. Close to 10% growth is projected for the overall market but I think that it will be higher than that,” said S Sridhar, Director – Marketing, India Relationship, Dell India.

Dell has acquired several storage families over the years moving from being a reseller of EMC storage boxes to one with its own strong portfolio that includes such brands as Compellent and EqualLogic. Some of its wins included US Technologies for Compellent and Sapient for EqualLogic.

“Higher single digit growth is expected from 2011-14. We will grow faster than the overall market,” said Deepak Varma, Regional Presales Head, South, EMC India.

“In the first half of FY11, there was a lot of optimism and strong double digit growth for HDS. The second half saw some sluggishness as the rupee depreciation delayed most investments. There were also supply challenges and price escalation in this period,” commented Vivekanand Venugopal, VP & GM, India, HDS.

FY12 would see the strong adoption of key technologies and increasing storage utilization. Dynamic provisioning, tiering and active archive technology are all promising. There will be a shift from consolidation to convergence. Organizations are focused on the consolidation of servers to hypervisors and some amount of storage consolidation through networked storage. The focus will be on reducing OPEX.

2011 proved eventful for HP as it introduced 3PAR solutions to the Indian market. The vendor sees an opportunity around storage virtualization and DR/BC. In the BFSI sector, banks are looking beyond CBS to additional channels and technologies such as VDI. In Telecom, there’s a push on Cloud-enabling the organization. Telcos are offering Storage-as-a-Service, data center transformation, managed hosted services etc. In manufacturing/distribution, companies are looking at setting up a DR site or to revamp their production site for supporting a core ERP system. Some of them upgraded to Exchange 2010. These organizations have been consolidating file services and setting up a centralized file service. In the mid-sized commercial market, aggressive virtualization strategies are being adopted for both servers and clients. SMBs are looking at data protection through disk-based backup and backup automation. “There was good growth in the SMB space for our data protection offerings. Entry-level, disk-based backup moved into the SMB space. The IP-SAN P4000 did well in the South. Success for our Exchange appliance, the E5000 (converged infrastructure), came from the SMB segment (less than 500 employees),” said Prakash Krishnamoorthy, Country Manager, HP Storage, HP India.

“There was significant growth in NAS with most SMBs opting for these solutions and a lot of players have entered the NAS business leading to clutter. The SAN segment is growing with the government, infrastructure companies and enterprises buying these solutions. With iSCSI gaining ground, there’s a shift towards SAS & SATA,” said Abhilesh Guleria, Country Manager, MMPG & ITPF Business, NEC India Pvt. Ltd.

“The competition is more intense and some customers are deferring purchases but there’s been no impact so far. Oracle used to be a partner, now they are a competitor. We continue to grow at 20% plus. The storage market will continue to grow; single digit growth is projected in India but it may just get into double digits,” commented Surajit Sen, Director, Channels, Marketing and Alliances, NetApp India.

Technologies in demand

There are lots of enterprise storage technologies that have been around for a while now including storage virtualization, FCoE, iSCSI, storage tiering etc. Some have caught on, while others haven’t. iSCSI has clearly been a winner with IP-SANs proliferating.

“Enterprises are showing interest in Cloud computing and FCoE. People are still worried about security in the Cloud. They prefer a private Cloud solution. FCoE can help lower costs by offering performance that’s better or equal to that of FC,” said Mani of AMI.

2011 saw a lot of enterprises go in for low-cost options in storage. Consolidation is a problem for these companies and there is no interoperability between their storage boxes. They are looking at the Cloud as a solution in the future. A fairly good amount of server and storage virtualization has occurred.

Boston’s Nayee said that the adoption of tiered storage was leading to increasing demand for SSD/flash based storage being used as a cache typically for large databases and high transaction I/O apps. Commodity products were taking share away from proprietary ones as enterprises moved from FC to IP-SAN with the latter having become resilient now.

Dell’s Sridhar felt that SSD/Flash was becoming a dependable component. On the storage virtualization front, it was starting to happen alongside server virtualization.

EMC’s Varma felt that Cloud computing, storage virtualization, FCoE and Automated Storage Tiering all had a strong correlation leading to a cascade effect. “The Cloud is the umbrella, which is defining a transformation in how customers do business today. If you want to make a journey to the Cloud, virtualization is a significant technology. With the ability to converge networks, FCoE will fuel Cloud adoption. The adoption of EFD is helping customers virtualize and consolidate and move onto the Cloud. The trend emerged in 2010-11 and it will be stronger in the coming years,” he said.

HDS’ Venugopal said, “Storage virtualization will catch on. It brings down the cost of setting up a data center as well as offers a significant reduction in overall OPEX. It is the enabling technology for automatic tiering.”

As per Venugopal, what we are witnessing today is nothing less than the rise of the storage computer. “Today, if you look at processor technology, server technology and network bandwidth, it’s no longer practical to manually lay out applications on the storage infrastructure. Storage has become a computer in the sense that general purpose controllers are unable to handle this level of intelligence,” he added.

The storage computer will analyze usage patterns and move data at a granular level across heterogeneous storage arrays to help you achieve the desired performance/service level and cost objectives.

Krishnamoorthy of HP made three predictions:

• We will see greater deployment of the Cloud this year than was the case in 2011. Organizations that deployed virtualization successfully last year would look at the Cloud this year.
• Another 5-10 CSPs will enter the Indian market bringing a new level of efficiency and cost optimization driving companies to looking at moving some apps into a Cloud-ready model. Some of them would like to deploy automated provisioning tools and self-service portals to transform their virtualized environment into a Cloud.
• The priority would be for provisioning rather than tiering. Companies will move from thick systems to thin and then look at tiering. Organizations that lack thin provisioning could go for tiering.

NEC’s Guleria spotlighted the improved performance of Serial Attached SCSI (SAS) drives that had led to the popularity of the SAS-SATA combination.

Looking at the trends in the storage market, NetApp’s Sen had this to say about some of the prominent technologies in this space.

• Cloud computing: Large customers are looking at the private Cloud.
• Storage virtualization hasn’t made a big impact; credible options exist but not many customers are keen to do multi-vendor storage virtualization. Virtualization within the storage array has picked up.
• FCoE: In terms of the technology, it’s got great vision and makes economic sense; most customers got bogged down by investments in existing technology; this is just beginning to pick up; in the last quarter NetApp had four-five wins with FCoE.
• Automated Storage Tiering (SSD/Flash): It’s not the best way to manage your data as the granularity is not optimal as the time taken to migrate data is too long. NetApp uses Flash in the storage controller as a cache. All hot data automatically gets moved to the cache, which is dedupe aware. With 1 TB of flashcache, it acts like 2 TB with dedupe. Customers doing server virtualization are using flash to accelerate their deployments.

Mitesh Agarwal, CTO & Director – Systems Solution Consulting, Oracle, said, “Big data is an emerging opportunity. People are not investing in pure disk technology. Using innovative technologies such as flash/SSD, they are virtualizing all three tiers. Customers started with Server OS virtualization. They aren’t getting the expected gains just from that leading them to consider storage virtualization. Most storage virtualization ends up being proprietary (you can do automated tiering only with that vendor’s boxes). In the last two quarters, storage virtualization has been adopted far more aggressively.”

Cloud storage

These are still early days for Cloud storage in India. Most organizations are worried about security and, for some, regulations forbid putting their data on a public Cloud where the data could potentially be stored just about anywhere. Despite that, Cloud storage has potential, especially for smaller companies and those that aren’t fettered by regulations.

Boston’s Nayee was of the view that the Cloud storage market was evolving. “It’s about trust and security. As time goes by and people experience the Cloud and understand that they are potentially more secure on it, the usage of Cloud storage will go up. People need to understand where their data is being held. Is your data being held in India or is the CSP storing it in other territories. Our solution is that we guarantee that your data is stored in a specific data center in India,” he said.

Varma from EMC said, “The Cloud service provider market is growing because India is an extremely price-sensitive market and CSPs are able to deliver cost benefits by allowing them to offload non-critical workloads. We have been associated with a large telco that wanted to build a very large data center. We gave them the ability to offer both storage and backup as-a-Service.”

HDS has been working with Cloud service providers helping them build infrastructure that they can go to market with. “A large number of customers are using our technologies to build private Cloud infrastructure. For customers who aren’t ready for the public Cloud, we have Cloud Service Programs where our technology is placed in the customer’s data center and we offer it as a service. We are working with the likes of Wipro and Infosys in this area,” said Venugopal.

Netapp’s Sen commented, “We are focusing on Cloud service providers. We will never become a Cloud SP ourselves. Today, we are reaching out to a billion consumers through CSPs. We are working with TCS, Tata Communications, HCL Infinet, Hexaware, BSNL and NetMagic in India. We craft a market strategy with them and ensure that our channel partners carry the CSP solutions in their portfolio. Cloud services put demands on storage that traditional storage may not be able to meet.”

Jyotish Ghosh, Senior VP, Connectivity and Network Services, Sify Technologies, said, “In our data center and Cloud business, some of customers’ storage requirements have doubled. Some of them have moved quite a lot of apps onto storage services. Consequently, we are expanding storage resources at our facilities. Today, we have about 23 TB in one and 18-20 TB in another facility. We will be doubling that immediately to start with.”

He added, “It’s a platform play where we take up the customer’s platform like his servers, OSs and database and we provide storage as a part of the deal. Some customers use it for their existing apps and current databases as well as for new ones. There are some customers who come to us with just a storage requirement but these are very few.”

With a plethora of CSPs in the fray and more on the way, the market will head upwards this year.

Demand patterns

Traditionally, it’s been BFSI and telecom that have been the biggest consumers of enterprise storage.

AMI sees a lot of demand coming from SMBs and 70-80% of its sales come from this segment. IT/ITES, BFSI, Government and Manufacturing are the promising verticals.

For Boston it was Media & Entertainment, Research and SMBs (because of compliance).

Dell’s take was that BFSI and telecom had a voracious appetite for storage. The government has been continuously investing on servers for the past few years. “I see them upping their investment on storage this year,” said Sridhar.

EMC picked Government and BFSI to be the top consumers of IT this year as these verticals were driving IT for the larger community. In BFSI, banks are trying to move beyond core banking.

HDS saw BFSI, Telecom (new business models including value added data services and the Cloud) and Government projects fueling demand.

HP’s Krishnamoorthy said, “The government will become one of the largest verticals this year. There are many reform initiatives underway including the completion of APDRP across the remaining states. Better e-governance initiatives are expected from states in terms of VAT, PDS and the better delivery of education through ICT. In homeland security, there are projects like CCTNS that are being accelerated by the government. Across verticals, companies would like consolidate and virtualize. There will be 10-20% additional spend around virtualization. We expect to see wider adoption of VDI. The consolidation and completion of server virtualization will take place this year. Organizations will start evaluating and taking advantage of BI/analytics. More than 60% of data in any organization is unstructured. To consolidate it and derive intelligence from theses data stores, they would need large high-capacity storage boxes. Perhaps 2013 would be the year of Big Data in India.”

NEC believed that demand from the government would continue to be strong. BFSI is the traditional consumer while a lot of infrastructure and retail companies are the growth segments. Media is gradually maturing. As things get consolidated into data centers and colocation starts, it should fuel demand. As consumers start consuming video and apps and data flowing over networks grows, it will fuel the storage requirements.

NetApp saw an opportunity around big data. Analytics (Hadoop), video-based apps, HPC and animation (Media) are all emerging areas.

Sify’s take was that the demand would be mostly from BFSI & IT (e-commerce/portal).

Technologies & features on the road map

As always, there’s a lot to come from the players on the product/technology front.

AMI is integrating FCoE and horizontal federated storage into its solutions. It believes that FCoE is going to be a substitute for FC systems. Its SafeTrends product line is being enabled to be more Cloud-based. AMI recently launched the StorTrends 3400 series where it has Cloud features built into the product supporting both horizontal and vertical federation.

Boston felt that it was the software stack rather than hardware that came into play when it came to understanding data structures and doing meaningful analysis with Hadoop being a good example of this. “That’s coming into the commercial space,” said Nayee.

Dell’s focus would be on content-aware deduplication and compression. “We are integrating all of the dedupe solutions across our portfolio. We will be coming out with the next generation architecture of Compellent and the next set of storage controllers,” explained Sridhar.

EMC’s Varma argued that unstructured data was growing rapidly. “Big Data is the data that exceeds the processing capacity of conventional database systems. Organizations would like to analyze Big Data or use it to enable new product development. Today a company may make a market forecast based on six areas of analysis. If they could extend that to 300 points, the analysis would be that much more refined. Big Data can’t be handled by the traditional storage architecture. That’s why we acquired Greenplum and Isilon. The integration of Hadoop with these two has provided a solution for consumers of Big Data,” he said.

The other thing that EMC is doing is that it is extending tiering all the way to the server with VFCache so that the data can be intelligently placed in terms of caching or fetching.

“We extended the integration of Avamar and Data Domain to handle backup & recovery in a Big Data environment,” added Varma.

HDS’ Venugopal stated that, “Storage virtualization, storage reclamation, software & services (greater transparency between the app and the storage infrastructure), bridging the technology consumption gap with services, co-creating services along with partners and letting them white label HDS’ services are all on the agenda for 2012.”

HP’s Krishnamoorthy said that the company’s focus had been on Virtual Systems of late wherein it was helping customers move from traditional to virtual architectures with 3PAR for Large Enterprises and the P4000 (IP SAN, thin provisioning etc.) for mid-sized Cloud deployments.

“In the last two quarters, we have had a lot of new product announcements around 3PAR. In the coming quarter, there will be improvements around 3PAR in the form of feature enhancements. There will be a thrust on the 3PAR area to prove to customers how we can deliver superior performance, reduce TCO etc. We will accelerate awareness and demand for the D2D StoreOnce architecture offering scale out, high availability disk-based backup. New products are getting launched around tape libraries. We will come out with a new file system called LTFS. There are product refreshes coming up around the P4000 and feature improvements in the P6000 line,” said Krishnamoorthy outling HP’s plans for 2012.

“Our primary road map calls for accelerating performance and providing intelligence for accelerating data access and how efficiently it is stored. Flash-based technologies will be deployed. There was a time when people were talking about HDD vs. Flash. Now it is HDD and Flash. Flash is for accelerated performance and HDD is for storing large volumes. Both have a place when the data explosion is happening. There is still a price differential on a per TB basis. While we provide flash controllers, we also provide additional software solutions that work with our silicon products that provide abilities to cache data intelligently and deliver enhanced application performance,” said Santhanakrishnan Raman, MD of LSI India Research and Development.

Raman expounded that SAS 2.0/3.0 was a technology that LSI saw tremendous growth around. “The emergence of FCoE is something that we are hearing about from our customers,” he added.

Sify’s Ghosh said, “We are trying to extend storage-as-a-service for retail customers who need huge storage capacity for data warehousing or for the daily logging of information from POS and churning data for analysis.”

Touching upon the subject of Big Data, he had this to say. “Big Data is in its infancy. Some customers have started talking about this. For instance, Greenplum is working well in Retail for Big Data. The technology will take some time to mature. It’s going to be a huge storage play eventually.”

SMB-side story

About a decade after enterprises made the shift from server-attached to networked storage, SMBs are making the same transition today. In fact, most vendors felt that the only difference between SMB and large enterprise storage requirements were in terms of capacity—the feature set demanded by both were largely the same.

“Capacity varies but the requirements are the same. SMBs may need lesser capacity but they also need DR, consolidation, replication and high availability,” commented Mani of AMI.

Krishnamoorthy of HP said, “Within the SMB space, they realize that IT enablement can provide a direct strategic advantage to them. SMBs don’t have too many skilled people to manage IT. They are looking at technologies that are simple. Some of our converged infrastructure or appliances are being adopted well into that space. SMBs are no longer relying on DAS. They want the most optimized, best-in-class equipment. They want to automate the backup process. Whenever a new product is launched, the first few customers happen to be SMBs.”

LSI’s Raman said, “More IP and interfaces are being packed on SoCs. The types of interfaces are growing. This translates into sophisticated systems for the SMB segment.”

EMC’s Varma said, “A lot of SMBs continue to use DAS because their current sysadmin can manage it. We came out with VNXe to solve this problem by offering centralized storage for IT generalists at an affordable price.”

NEC’s Guleria said, “There are two sets of SMBs. One set will require a different feature set, a subset of what the enterprise needs. For them the focus is on customizing storage that’s SMB-centric. The other set of SMBs consists of growth customers. These are the large enterprises of the future and their requirement is similar to that of any other enterprise.”

NetApp’s Sen said, “A couple of months back, we launched a product and pricing strategy for mid-sized customers. We had acquired 10,000 mid-sized customers without trying. We empowered channel partners to make decisions on their own to drive business. Today we have a product that starts below Rs 4.5 lakhs that offers all of the enterprise features that a large bank would expect. Our strategy to address SMBs is through the Cloud Service Providers. The TCS Ion offering is aimed solely at SMBs and that’s built on our technology.”

Oracle’s Agarwal said, “Whatever enterprise class functionality was available only in the high-end earlier is today available right from the entry-level.”

SMBs are being offered similar functionality to what enterprises get in easy-to-manage solutions.

Thai Floods

This was perhaps the natural disaster that had the most pervasive effect upon the storage market. Thailand, home to several hard disk manufacturing plants, saw severe flooding in 2011 that led to a 9% decline in its GDP. The impact was felt in terms of both the cost of hard disk drives going up and a shortfall in numbers.

“Drive costs have gone by as much as 50%. The average cost of a hard drive is going to be higher in 2012 than it was in 2011. In 2013, it should start going down again. However, with 3.5 inch 3 TB drives and 2.5 inch 2 TB drives boosting capacity, this increased capacity will lead to a reduction in cost but it will take time,” said Boston’s Nayee.

“It has already had a spiraling impact. It has definitely affected the entire industry. The receding of the flood is happening but the recovery is going to be drawn out. Demand is much greater than capacity,” said Dell’s Sridhar.

“Thailand accounted for 40% of global HDD production in 2011. However, the impact of the floods has been more on consumer hard drive shipments rather than on that of enterprise hard drives. Enterprise products are high margin products and it is important for hard drive manufacturers to continue producing these drives. We see an impact in terms of higher prices. The wait time for supply will be a little higher and there will be limited availability of some of the popular drives,” said Varma from EMC.

HP moved to tackled the shortage of hard drives on account of the floods in Thailand through planning and forecasting. “We highlighted that there would be a constraint and educated our sales force and partners and were upfront in telling customers that they needed to plan better. Relatively, we managed it well,” said Krishnamoorthy.

LSI’s Raman said that, “It did have an impact and the worst is behind us and things are recovering. We look forward to those adjustments happening.”

“Our industry has definitely been impacted. Our suppliers were affected and we absorbed the beating on pricing because of the demand-supply gap. After a while it became unsustainable and, earlier this month, we announced that we would be increasing our prices 5-15% in line with what other players are doing,” commented NetApp’s Sen.

The Thai floods will shape the market in terms of supply and costing for the rest of the year. On the whole, the enterprise storage market is growing at a reasonable rate. There are interesting technologies that are being tried out by enterprises and increasingly SMBs are taking the first crack at new products. 2012 will likely see greater adoption of storage virtualization and Cloud storage although these will be far from pervasive. That will take longer.

The ongoing shift of SMBs from DAS to networked storage in the form of NAS or IP-SAN will continue. Indian enterprises haven’t really got around to even evaluating big data so that’s still going to be more of a buzzword than a technology trend. All in all, it will be an year of mild change with a gradual transformation of the Indian enterprise storage landscape.

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