Storage Networking Open to Small Fry

The current storage area networking market is unusually open to private companies and startups, according to a recently published survey from Heavy Reading, the market research division of Light Reading Inc., Byte and Switch's parent company.

Results from Heavy Reading's Fall 2003 Storage Networking Market Perception Study show that prospective buyers of SAN products are more aware of smaller suppliers than purchasers in other technology markets tracked by Heavy Reading, such as the telecom equipment markets.

Market perceptions toward makers of Fibre Channel SAN systems illustrate the openness that SAN buyers have toward smaller vendors. In a market segment peppered with some of the biggest names in the computing and technology industries, private company XIOtech Corp. was recognized by nearly 30 percent of the 199 respondents to this product category, according to Heavy Reading. Another private company, Chaparral Network Storage Inc., registered on the radar screens of nearly 20 percent of those respondents.

Those results stand in sharp contrast to Heavy Reading's Fall 2003 survey of prospective buyers of core routers. In that survey, the leading startup vendor, Caspian Networks Inc., was recognized by only 14.6 percent of that survey's 212 respondents, while fellow startup Procket Networks Inc. was named as a supplier by less than 10 percent of prospective buyers.

In general, vendor brand recognition among prospective buyers in the SAN market is much more evenly distributed than in other technology markets surveyed by Heavy Reading. In the Fibre Channel SAN survey, nine vendors registered on the radar screens of at least 50 percent of the respondents, with the three most recognized suppliers -- EMC Corp. (NYSE: EMC), IBM Corp. (NYSE: IBM), and Hewlett-Packard Co. (NYSE: HPQ) -- all topping the 80 percent mark.

Figure 3: Top Fibre Channel SAN Vendors by RecognitionSource: Heavy Reading

In another storage networking category, network-attached storage systems, the Heavy Reading survey shows six vendors recognized by more than 50 percent of respondents: EMC, HP, IBM, Dell Computer Corp. (Nasdaq: DELL), Network Appliance Inc. (Nasdaq: NTAP), and Sun Microsystems Inc. (Nasdaq: SUNW).

Contrast these results with those for core routers from the Heavy Reading 2003 Telecom Equipment Market Perception Study. In that report, just three vendors, Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Cisco Systems Inc. (Nasdaq: CSCO), , and Juniper Networks Inc. (Nasdaq: JNPR), were recognized as market leaders by more than 50 percent of potential buyers. Although it's a public company with an established track record, Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) was recognized by less than 25 percent of the prospective core router buyers surveyed.

Figure 4: Top Core Router Vendors by RecognitionSource: Heavy Reading

Overall, the Heavy Reading storage networking survey offers good news to smaller companies, both public and private. In the cross-category results from the survey, Veritas Software Corp. (Nasdaq: VRTS) scored the highest average name recognition rating across all product categories in which it participated, outperforming such high-profile brands as Cisco, EMC, IBM, and HP (see A Moment of Veritas).The storage networking survey results clearly indicate that buyers are willing to consider a lot more players as potential suppliers, but there's a downside. Name recognition alone doesn't translate to dollars spent. With so many vendors to choose from, it may be hard for newcomers to get the attention of key buyers, even if they are known to them. Even some giant networking and computing vendors are having disappointing results.

One thing: Vendors playing in this market can't use lack of recognition as an excuse for poor performance. Although the storage networking market is still in its formative stages, customers are well aware of who's out there and what they're offering. The stage is set for competition that will help define and differentiate the various segments.

Mary Jander, Site Editor, Byte and Switch

To view an executive summary of the Heavy Reading report – Fall 2003 Storage Networking Market Perception Study – click here