Though investments in storage have decreased, it will continue to be a focus area for many organizations

In the past, we heard talk about how enterprise storage requirements are doubling every year, and that storage is becoming a major investment area under the IT budget. While that may be true to some extent, the reality is investment in Storage has decreased this year. Nevertheless, storage is still the main focus for 34 percent of the survey respondents, and CIOs are aware this is one area that's crucial to their business.

There are several factors that influence the purchase of storage infrastructure, but at the end of the day, a CIO is responsible for the management and security of data—the crown jewels of business. This data is growing exponentially due to business growth and the deployment of new applications like CRM. For many companies, data storage requirements double every year. We found that the average rate of increase in storage requirement is 38 percent.

Of the six infrastructure segments within Storage, we see that the main requirements this year are disaster recovery solutions, SAN, NAS, and backup infrastructure. 47 percent of the companies need a Disaster Recovery solution, 41 percent need a SAN, 35 percent need Backup infrastructure, 31 percent need NAS servers, 25 percent require DAS, and 12 percent require Storage Management tools.

The strong relevance of stored business data has led to more deployment of disaster recovery and backup infrastructure. Data recovery and data security have become a prime concern for CIOs after tragedies like the September 11 attacks on the WTC and the earthquake in Gujarat. Another concern is e-mail viruses and worms which cause significant losses due to downtime and data corruption.

CIOs also worry about the staggering growth of data, so data management is another focus area. That calls for storage infrastructure that is scalable and provides for high data availability. Storage Area Network (SAN) and Network Attached Storage (NAS) address both issues. While the former is highly scalable and offers consolidated storage that's accessible to multiple servers, the latter is a scalable file-level storage solution.

Organizations are increasingly embracing NAS and SAN. At present, 22 percent of companies have a SAN while 24 percent have NAS solutions. Around 41 percent companies said they required SAN while 31 percent require NAS.

DAS will continue to be around but companies will gradually move away from DAS and opt for NAS/SAN instead, because of the benefits these offer. At present 46 percent companies use DAS but only 25 percent said they would require DAS in future.

INVESTMENT
The investment in storage has reduced. Last year, the average amount allocated for storage was Rs 246 lakh. For 2002-2003 this amount has decreased to Rs 173 lakh.

Analyzing the data for funds allocation we notice that most companies are spending up to Rs 25 lakh on storage. At the other end of the spectrum many large-size enterprises are investing more than Rs 15 crore.

Two conclusions can be drawn from this. Due to reduced IT budgets, allocation of funds towards storage has not increased. Also, more SMEs will be investing in storage.

Disaster recovery rules
The highest requirement for various storage solutions comes from the Banking/Services and IT/Telecom industries.

Almost all the banks who participated in the survey said their storage requirement had increased. Last year these banks were spending up to Rs 50 lakhs on storage. This year however, some of these banks will be spending Rs 1 - 15 crore (or more) on storage infrastructure. The reason: Many of the leading banks are expanding their retail services and deploying additional infrastructure.

The IT-enabled Services industry is becoming increasingly dependent on support services like call centers, and storage forms a vital part of the infrastructure in call centers.

The Telecom industry also has a strong requirement for storage. This sector is witnessing the entry of private players and the introduction of new consumer-oriented services.

52 percent of the companies in Banking/Services have a requirement for Disaster Recovery solutions. Many companies in this industry (40 percent ) also have a requirement for SAN and DAS (36 percent).

47 percent of the companies in the IT/Telecom industry have a requirement for Backup solutions. Another trend that we observe is that the highest requirement is for Disaster Recovery solutions across all industry segments. This is followed by SAN and Backup solutions.

OUTLOOK
Storage has definitely become a major component of IT infrastructure. Once the economy improves we can expect Storage to become a key area of the IT budget.

The implementation of data-intensive applications like CRM, and business expansion are driving growth in storage requirement. Data security and data recovery are now the most significant focus areas within the storage space.

Although SANs are poised for highest growth among storage systems, we will see more deployments once the cost of SAN solutions come down. Also, new standards are required to minimize the complexity in setting up a SAN.

Although a majority of storage investments will come from the SME segment, one should also keep an eye on the large enterprises.

Research Snapshots 81 percent of the respondents said there was an increase in requirement for Storage The average rate of increase in storage requirement is 38 percent Last year, the average amount allocated for storage was Rs 246 lakh. For 2002-2003 this amount has decreased to Rs 173 lakh Requirement is highest for Disaster Recovery solution (47 percent) and Storage Area Network (41 percent) 31 percent said they have requirement for NAS 52 percent of the companies in Banking/Services have a requirement for Disaster Recovery solutions. Many companies in this industry (40 percent) also have a requirement for SAN and DAS (36 percent) 47 percent of companies in the IT/Telecom industry have a requirement for Backup solutions

Top 5 benefits CIOs seek Data security Information storage/retrieval Better data management Improvement in operational efficiency Reliability