The Giant Sucking Sound and the Emergence of the Value Tier
I’m just back from SNW in Orlando where storage people get together a couple of times per year to compare industry news and trends. This year I was struck by a big theme that reinforces what we are hearing from analysts and customers. A massive shift is occurring in storage – a move to what some are calling “Value Tier Storage.” Basically there are two types of companies: those who are on the value bus and those that aren’t.
Here’s the juice. Enterprises are moving more and more of their information to a permanent, low cost, resilient and accessible tier of storage. They can’t pay the high prices to house this information on primary storage such as EMC, IBM, or HDS and want to rid their environments of the point solutions to deal with the resulting back-up headaches such as Data Domain and FalconStor. That is why they invest in the Permabit solution. It sounds like a giant sucking sound created by a market shift to me.
To play in this game storage providers need to offer a price per GB (before dedupe) that is an order of magnitude different from their primary storage (we’re talking $2/GB range) with the simplicity of low touch management. Oh, and if you don’t have sub-file level, content aware, inline dedupe that scales to PBs you don’t even get off the bench.
I remember a similar market move in the late 90′s. Remember when suddenly you could purchase goods on-line? When you found the value, logistics, selection and quality met your expectations? A friend of mine called it the “sluicing” effect, meaning large market share shifts occurred from brick and mortar companies towards online merchants when they introduced disruptive selection, price and service levels.
Think about what happened to the markets for books, electronics, music, job placement, retail brokerage and travel. When you give a consumer more choice, a better value and service levels that exceed expectations, major shifts occur.
That is what is happening right now in the storage market. The cost, quality and service levels of value tier storage far surpass the requirements for 75% of the information in an enterprise. Suddenly we are beating primary storage at its won game. That means enterprises from SMB to Fortune 100 can now save more information and make sure it is accessible and useful to their business. And they can do it for much less.