IP SANs Struggle for Respect

IP SANs have been talked about for more than five years, and iSCSI systems have been widely available for more than two. So why is the technology still treated as a second-class citizen by the storage establishment?

A group of startups have demonstrated this kind of storage is cheaper and easier to manage than Fibre Channel. And yet, these small vendors struggle with profitability and aren't considered hot acquisition prospects. (See Panel Prompts iSCSI Love-In.)

LeftHand, EqualLogic, and Intransa are the main IP SAN system startups left standing now that StoneFly Networks is out of the game. (See StoneFly Fights for Survival.) Others such as Sanrad, which sells switches that connect to arrays by iSCSI, and smaller iSCSI software startups are also trying to carve out their place in the SAN.

The survivors face the usual challenges for startups, which include executive transition. Intransa and EqualLogic both changed CEOs last year, and Intransa also went through a series of other management changes. (See Don Bulens, President & CEO, EqualLogic and Intransa Trades In CEO.)

LeftHand is also going through a transition of its own. Byte and Switch has learned chief strategy officer Tom Major left the startup this week after spending nearly three years as its primary public spokesman. Major says he was lured away by a Fortune 500 company he wont name -- a couple industry sources say it's Seagate -- and he hopes to continuing working with LeftHand as a consultant.Industry sources say LeftHand could become profitable this year, and EqualLogic isn’t far behind. LeftHand claims more than 1,000 customers and EqualLogic more than 800.

But if iSCSI has such a bright future, how come the major storage vendors haven’t embraced it? No IP SAN companies were among the plethora of acquired startups last year. The major storage players appear far more interested in technologies such as virtual tape, continuous data protection (CDP), encryption, and file virtualization. Perhaps more than any other storage technology, iSCSI remains primarily the domain of startups.

Except for Network Appliance, the top public storage firms have dragged their feet on IP SANs. They offer it if customers want it, but they’re pushing Fibre Channel harder than ever. Although price is considered a major selling point of iSCSI, EMC sells iSCSI versions of its Clariion midrange systems at the same price as its Fibre Channel Clariions.

Industry insiders say that’s a business decision more than a knock on the technology. EMC, Hewlett-Packard, Hitachi Data Systems, and IBM don’t want a lower-cost, lower-margin technology cutting into their Fibre Channel revenues, they say. So EMC, HP, and IBM offer iSCSI connections to systems that lack the functionality of their Fibre Channel systems. Hitachi doesn’t offer an iSCSI system at all.

“The business model for iSCSI is different,” says analyst Arun Taneja of the Taneja Group. “I do believe there is an opportunity for making money in iSCSI. I don’t believe it’s in sticking an iSCSI target on an array and pricing it the same as Fibre Channel. That’s a placeholder to indicate 'I have a product for iSCSI but I’d rather you didn’t buy it.' ”NetApp is the exception among the established storage vendors. (See NetApp Banks on iSCSI.) While it primarily sells NAS, NetApp lets customers purchase iSCSI or Fibre Channel targets to move block storage. NetApp is publicly bullish on iSCSI, but it doesn’t have as large a Fibre Channel base to protect as the other established storage players do.

Financial analyst Steve Berg of Punk, Ziegel & Co., says NetApp doesn’t consider itself strictly a Fibre Channel company or a NAS company. “They’ll put out anything that’s faster, better and cheaper,” he says. “The other guys are in a Catch 22. They have such an established Fibre Channel base, and they don’t want to sell technology that lowers their margins.”

Jeff Chestnut, director of operations at healthcare consultant Dynamic Health Strategies in Houston, discovered HP’s attitude toward iSCSI before he purchased an IP SAN from Intransa last February.

“They said, ‘You need NAS.’ I said, ‘Why do you guys say that? What do you know that I don’t know?’ ” he remembers. “I told them again what I need. I told them, 'I need a SAN, and I want to look at your IP technology.' They said they didn’t have it then.”

Chestnut says he wanted iSCSI for two major reasons. “First, it had to be brain-dead easy for users. After I knew it would work, the price would have to be something I could afford. Price was the number two thing.”Joanne Kossuth, CIO of Franklin W. Olin College of Engineering in Needham, Mass., agrees with Chestnut’s priorities. Her college bought 7.5 Tbytes of storage from EqualLogic for less than $100,000 in 2003. But what clinched the deal over HP, EMC, LeftHand, and Xiotech was how quickly the EqualLogic system could get up and running.

“We have a lot of data but it’s not transactional, so we didn’t have concerns about throughput as some corporate environments might,” she says. “Still, we looked at Fibre Channel arrays and other iSCSI systems. Other people were telling us implementation would take two weeks, and talking about consulting services. EqualLogic set up the system in less than an hour. And with Fibre Channel, we could attach eight to 10 servers because of the cost. With our system we attached all 60-some odd servers to the SAN.”

Of course, not everybody thinks that’s a good idea. Rich Ward, director of technical services for the Philadelphia Stock Exchange, says he prefers Fibre Channel for his storage and leaves Ethernet to the network guys.

“I don’t see why iSCSI would be a benefit,” he says. “I fear when we take a network hit, not only do I lose systems on the network, but now I’m losing storage, too. I like that I segregate storage away from the network -- I don’t want two kinds of problems to dig out from.”

The IP SAN startups go after the DHSes and Olins of the world, smaller firms that need storage they can manage without dedicated Fibre Channel admins and that fit into their budget. They mostly stay out of the enterprise, at least until 10-Gbit/s Ethernet comes down drastically in price. That’s unlikely to happen before 2007.“We’re not trying to take on the very highest level of performance required,” EqualLogic CEO Don Bulens says. “We’ll take the 90 percent of storage that we perform fabulously for -- SQL Server, Exchange, disk-to-disk backup.”

The IP SAN startups aren’t all that worried about the lack of attention paid by established storage firms. Bulens says he likes flying “beneath the radar of the Fibre Channel community,” and it’s not hard to do now. “Major storage systems companies are able to effectively serve customers with Fibre Channel products and respond to customers that insist on iSCSI with retrofitted iSCSI products,” he says. “They do not view iSCSI as a major market opportunity. When you think you’re effectively serving customers, why change?"

Intransa’s Alexander agrees: “We’re competing mostly against other startups. If our sales guy goes into an enterprise account and sees an EMC account, he goes away. We look for believers in IP SANs.”

Is iSCSI gaining believers? Perhaps. Hitachi CTO Hu Yoshida says his company might have to get into the game soon, but he makes it clear that iSCSI is not ready for the enterprise.

“In our market space, which is typically the higher midrange and high end, we don’t hear customers talking about iSCSI,” says Hu. “In the lower end, we know of customers that use iSCSI. But I think the time is approaching, and demand is picking up. You may see an iSCSI product coming out from us this year. But still mostly on the low end.”— Dave Raffo, Senior Editor, Byte and Switch

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